SNDL (NASDAQ:SNDL) and Nova Cannabis said the outside date for the closing of their strategic partnership has been extended again with the companies now anticipating that the transaction will close on or before September 30, 2023.
The news sent shares of both cannabis companies lower, with SNDL (NASDAQ:SNDL) shedding 9.9% to US$1.56 and Nova Cannabis down 4% to C$0.48 at Thursday's close.
They announced earlier on Thursday that, while all other provincial approvals have been received, the continued review by one provincial regulator has required the closing date to be further extended.
“SNDL (NASDAQ:SNDL) and Nova recently participated in constructive discussions with the regulatory body responsible for final approval," said Nova CEO Marcie Kiziak.
"The conversation was productive, and we are confident in the transaction's timely progression. SNDL (NASDAQ:SNDL) and Nova remain committed to navigating through these processes with transparency and diligence, ensuring the best outcome for all parties involved."
SNDL (NASDAQ:SNDL) and Nova Cannabis announced the strategic partnership in December 2022.
It aims to create “a well-capitalized cannabis retail platform in Canada under a vertical integration model with SNDL's upstream capabilities”, the companies said when announcing the partnership.
Nova will receive from SNDL retail contribution, corporate services, debt restructuring, return of equity and increased liquidity and in consideration SNDL will receive intellectual property rights to Nova’s Value Buds stores and the license to grant to Nova to operate the Value Buds, Spiritleaf and Superette banners.
The two companies will also enter into an agreement whereby Nova will utilize SNDL's brands’ intellectual property and other intangible property in exchange for a license fee at a rate of 5% to 15% of gross profits on each store starting one year after the transaction closes.
- Updated with share price movement -
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