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Canadian marijuana producer SNDL and retailer Nova Cannabis have mutually agreed to terminate the agreement they announced late last year to implement a strategic partnership.
However, the Alberta-based companies said in a news release that they’re committed to their “ongoing partnership under the management and administrative services agreement.”
SNDL, headquartered in Calgary, is the majority shareholder of Edmonton-based Nova after the 2021 acquisition of Nova’s previous parent company, Alcanna.
In April 2023, the companies amended a 2022 plan, in which SNDL would transfer stores to Nova and return shares to the retail company for cancellation, among other things.
The amended terms aimed to increase the number of stores SNDL would transfer to Nova by an additional six locations, according to a research note written at the time by Matt Bottomley, an analyst for Toronto-based Canaccord Genuity.
The 2022 arrangement had anticipated the transfer of 26 cannabis stores to Nova while retaining a management- and administrative-services deal with the retailer, replacing a credit facility and returning 14.3 million Nova shares to Nova for cancellation.
In a Nov. 17 release, SNDL made no mention of the stores.
SNDL did not immediately respond to an MJBizDaily query.
In the release, SNDL said the planned distribution of Nova’s common shares to SNDL shareholders will not proceed at this time.
Also, in connection with the termination of the strategic partnership plan, SNDL and Nova said they extended the maturity date of Nova’s credit facility with SNDL to March 31, 2024.
“We are dedicated to building a consumer-centric, regulated products business model within a complex regulatory environment,” SNDL Chief Executive Zach George said in a statement.
“The synergy between our companies has already demonstrated great results, and combined efforts and shared vision are key drivers in this journey towards market leadership.
“SNDL remains committed to being a strong financial partner to Nova, with a focus on fostering sustainable business growth and development.”
Shares of SNDL trade on the Nasdaq.
Nova trades as NOVC on the Toronto Stock Exchange.
