Core Viewpoint - The stock prices of major cannabis companies surged significantly following reports of President Trump's plans to relax federal regulations on marijuana, with notable increases in premarket trading [1][2]. Group 1: Stock Price Movements - Tilray Brands (NASDAQ:TLRY) saw a price increase of 34.88%, while Canopy Growth (NASDAQ:CGC) rose by 27.46% in premarket trading [1]. - Other companies also experienced substantial gains: Aurora Cannabis Inc. (NASDAQ:ACB) surged 20%, Cronos Group Inc. (NASDAQ:CRON) gained 19%, Organigram Global Inc. (NASDAQ:OGI) rose 12%, and SNDL Inc. (NASDAQ:SNDL) increased by 34.7% [1]. Group 2: Regulatory Changes - The surge in stock prices was attributed to news that Trump plans to instruct federal agencies to reclassify marijuana as a Schedule III drug, which would change its regulatory status [2][3]. - This reclassification would subject cannabis companies to different tax regulations, potentially attracting more investments and placing marijuana in the same category as substances like steroids and Tylenol with codeine [3]. Group 3: Historical Context - Trump had previously hinted at this reclassification in August, indicating a consistent approach towards cannabis regulation [3]. - The anticipated change is expected to occur early next year, moving marijuana from a category that includes heroin to a lower tier for less dangerous substances [4].

Core Viewpoint - The potential reclassification of cannabis by President Trump from Schedule I to Schedule III is expected to significantly benefit the cannabis industry, leading to a surge in stock prices for major cannabis producers in the U.S. [1][2] Group 1: Market Reaction - Major cannabis producers saw substantial stock price increases in pre-market trading, with Tilray Brands (TLRY.US) rising over 30%, Canopy Growth (CGC.US) up 23%, Aurora Cannabis (ACB.US) increasing by 20%, SNDL (SNDL.US) gaining 14%, and Cronos Group (CRON.US) up 12% [1] - The market response indicates strong investor optimism regarding the potential regulatory changes surrounding cannabis [1] Group 2: Regulatory Context - President Trump is considering moving cannabis from Schedule I, which indicates no medical use and high abuse potential, to Schedule III, which includes substances with accepted medical uses but some potential for abuse [1][2] - Schedule III drugs include substances like ketamine and anabolic steroids, while Schedule I includes LSD and heroin [2] - The Biden administration previously proposed a similar reclassification in March 2024, but the DEA canceled related hearings [2] Group 3: Political and Industry Implications - Trump's discussions with key officials and cannabis industry executives suggest a serious consideration of the reclassification, which could alleviate criminal penalties for personal use and remove certain federal tax and business barriers [2] - The reclassification could improve the operating environment for legal cannabis businesses and their employees [2] - Robert F. Kennedy Jr., nominated by Trump for the Department of Health and Human Services, has advocated for ending cannabis criminalization and implementing a regulated sales system [3]

Core Viewpoint - Four cannabis stocks are showing significant technical momentum despite new regulatory challenges from Washington, particularly a provision in a government funding bill that could re-criminalize many hemp-derived THC products [1][2]. Group 1: Stock Performance - The stocks demonstrating gains include Tilray Brands Inc. (NASDAQ:TLRY), Cronos Group Inc. (NASDAQ:CRON), Organigram Global Inc. (NASDAQ:OGI), and SNDL Inc. (NASDAQ:SNDL) [2]. - Benzinga Edge's Stock Rankings indicate that all four companies exhibit strong positive momentum, particularly over the last six months [3]. - The six-month returns for the stocks are as follows: TLRY at 156.82%, CRON at 20.39%, OGI at 26.23%, and SNDL at 32.81% [4]. Group 2: Individual Stock Analysis - TLRY shows a weaker price trend in the short term but strong trends in medium and long terms, with a pre-market decline of 1.77% [6]. - CRON maintains a weaker short-term price trend but strong medium and long-term trends, with a pre-market increase of 3.63% [6]. - OGI has a weaker price trend in the short and medium terms but a strong long-term trend, with a pre-market decline of 1.95% [6]. - SNDL has a moderate growth ranking despite weaker trends across all timeframes, with a pre-market increase of 2.35% [6]. Group 3: Regulatory Environment - A new legislative provision in the funding package re-criminalizes intoxicating hemp products, which could significantly impact the market [7]. - Senator Rand Paul criticized the provision, stating it could eliminate nearly 100% of legal hemp products overnight, adversely affecting farmers [7]. - The regulatory changes may benefit multi-state operators by reducing "gray-market" competition but are expected to negatively impact Canadian companies like Tilray, which viewed the hemp-derived product segment as a key entry point into the U.S. market [8].

Core Viewpoint - Four cannabis stocks are showing significant technical momentum despite new regulatory challenges from Washington, particularly a provision in a government funding bill that could re-criminalize many hemp-derived THC products [1][2]. Group 1: Stock Performance - The stocks demonstrating gains include Tilray Brands Inc. (NASDAQ:TLRY), Cronos Group Inc. (NASDAQ:CRON), Organigram Global Inc. (NASDAQ:OGI), and SNDL Inc. (NASDAQ:SNDL) [2]. - Benzinga Edge's Stock Rankings indicate that all four companies exhibit strong positive momentum, particularly over the last six months [3]. - The six-month returns for the stocks are as follows: TLRY at 156.82%, CRON at 20.39%, OGI at 26.23%, and SNDL at 32.81% [4]. Group 2: Individual Stock Analysis - TLRY shows a weaker price trend in the short term but strong trends in medium and long terms, with a pre-market decline of 1.77% [6]. - CRON maintains a weaker short-term price trend but strong medium and long-term trends, with a pre-market increase of 3.63% [6]. - OGI has a weaker price trend in the short and medium terms but a strong long-term trend, with a pre-market decline of 1.95% [6]. - SNDL has a weaker price trend across all timeframes but a moderate growth ranking, with a pre-market increase of 2.35% [6]. Group 3: Regulatory Environment - A new legislative provision in the funding package re-criminalizes intoxicating hemp products, which could significantly impact the market [7]. - Senator Rand Paul criticized the provision, stating it could eliminate nearly 100% of legal hemp products overnight, adversely affecting farmers [7]. - The regulatory changes may benefit multi-state operators by reducing "gray-market" competition but are expected to negatively impact Canadian companies like Tilray, which had aimed to enter the U.S. market through hemp-derived products [8].

Core Insights - SNDL Inc. reported improved Q3-2025 results with increasing revenues and free cash flow for the quarter [1] - Despite the improvements, noncash impairments led to an overall net loss for the company [1] - The company's stock price has decreased by 22% over the last period [1] Financial Performance - The company experienced an increase in revenues during Q3-2025 [1] - Free cash flow also showed improvement for the quarter [1] - Noncash impairments negatively impacted the overall financial results, resulting in a net loss [1] Stock Market Reaction - SNDL's stock price has declined by 22% recently, indicating market concerns despite the positive revenue and cash flow trends [1]

Financial Data and Key Metrics Changes - SNDL reported net revenue of CAD 244 million for Q3 2025, reflecting a 3.1% increase year-over-year, driven primarily by the cannabis segments [7][10] - Gross profit reached CAD 64.2 million, a 1.9% increase year-over-year, despite CAD 3.9 million in non-cash inventory-related adjustments [8][9] - Free cash flow for the quarter was CAD 16.7 million, marking a CAD 7.5 million improvement compared to the same period last year, and achieving positive cumulative free cash flow of CAD 7.7 million for the first nine months of the year [10][13] Business Line Data and Key Metrics Changes - The liquor retail segment generated net revenue of CAD 139.4 million, a 3.6% year-over-year decline, while gross profit was CAD 36.7 million, a modest reduction of CAD 0.2 million [14][15] - Cannabis retail achieved net revenue of CAD 85 million, a record high with a 4.8% year-over-year growth, and gross profit of CAD 22.5 million, reflecting an 8.5% increase [16] - Cannabis operations reported net revenue of CAD 37.4 million, a 50% growth year-over-year, driven by edibles and international sales [17] Market Data and Key Metrics Changes - The cannabis retail segment saw a 3.6% increase in same-store sales, contributing to a 12 basis points gain in market share [19] - International sales reached CAD 4.2 million in Q3, with expectations for continued growth due to strong demand and reliability of supply [20][33] Company Strategy and Development Direction - SNDL is focused on growth, profitability, and enhancing its workforce, with plans to open five new cannabis stores and two new Wine & Beyond stores in Q4 [19][21] - The company aims to strengthen its competitive position in Canada while resolving ongoing litigation related to Sunstream restructurings, which are expected to provide exposure to dynamic medical markets [5][6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of CAD 11.9 million in unfavorable non-cash items on the P&L, but emphasized operational improvements and cash generation as key indicators of business fundamentals [4][3] - The outlook for cannabis retail is mixed, with signs of market maturity in provinces like Alberta and Ontario, but opportunities for margin improvement remain [36][39] Other Important Information - SNDL has no debt and over CAD 240 million in unrestricted cash, providing a strong balance sheet to support growth initiatives [5] - The company is experiencing a significant increase in share-based compensation due to a 121% rise in share price during Q3 [9][12] Q&A Session Summary Question: Clarification on cannabis operations write-offs - Management confirmed CAD 3.9 million inventory adjustment impacting gross profit and CAD 2.7 million fixed asset impairment affecting operating income but not gross margin [25][27] Question: Growth drivers for sales to provincial boards - Management noted softness in third-party retail sales but continued growth in their own segment, with expectations for regaining momentum through new products and innovation [29][30] Question: International sales outlook - Management expressed optimism about international sales growth, with strong demand and increasing purchase orders anticipated for Q4 and beyond [32][33] Question: Update on 1CMPharm transaction regulatory approval - Management stated that the review process is ongoing, with no additional information available at this time [35] Question: Market opportunities in cannabis retail - Management indicated a shift towards maturity in the market, with expectations for low single-digit revenue growth moving forward, while also noting improvements in gross margin [36][39] Question: RISE rewards program performance - Management reported strong engagement from loyalty members and plans to roll out a similar program for the liquor business [41]

Financial Performance - SNDL achieved a record $16.7 million in Free Cash Flow in Q3 2025, driven by working capital improvements in Cannabis Operations and Liquor segments[14, 17] - Net Revenue increased by 3.1% year-over-year to $244 million[14] - Gross Profit increased by 1.9% year-over-year to $64.2 million[14] - Adjusted Operating Income increased by 42.7% year-over-year to $(9.5) million[14] Segment Performance - Liquor Retail net revenue decreased by $(5.2) million or (3.6)% year-over-year to $139.4 million, with gross profit decreasing by $(0.2) million or (0.7)% year-over-year to $36.7 million[36] - Cannabis Retail net revenue increased by $3.9 million or 4.8% year-over-year to $85.0 million, with gross profit increasing by $1.8 million or 8.5% year-over-year to $22.5 million[39, 40] - Cannabis Operations net revenue increased by $12.4 million or 50% year-over-year to $37.4 million, but gross profit decreased by $(0.3) million or (5.6)% year-over-year to $5.0 million[45, 46] Strategic Priorities - Cannabis Retail same store sales grew by 3.6%[51] - Wine & Beyond same store sales grew by 2.9%, supported by private label growth of 13.3%[51] - Cannabis Operations experienced 50% year-over-year revenue growth, driven by edibles and international sales[52]

Core Insights - SNDL Inc. reported strong financial results for Q3 2025, achieving record free cash flow and positive cumulative free cash flow for the first nine months of the year, indicating operational and profitability improvements [4][6][8] - The company maintains a strong balance sheet with no debt and $240.6 million in unrestricted cash, positioning it for growth and investment opportunities [5][6] Financial Performance - **Net Revenue**: In Q3 2025, net revenue was $244.2 million, a 3.1% increase from Q3 2024, driven by a 13.5% growth in the combined Cannabis business, partially offset by a decline in the Liquor retail segment [6][8][30] - **Gross Profit**: Gross profit reached $64.2 million, up 1.9% year-over-year, with a gross margin of 26.3%, reflecting a slight decrease of 0.3 percentage points [6][8][30] - **Operating Income**: The company reported an operating loss of $11.1 million, improved by 40.3% compared to the previous year, influenced by non-cash items and restructuring charges [6][8][30] - **Free Cash Flow**: Free cash flow hit a record $16.7 million, primarily due to a reduction in working capital, despite significant CAPEX investments [6][8][30] Business Segments - **Cannabis Retail**: Generated net revenue of $85.0 million, a 4.8% increase year-over-year, with operating income growing by 107.2% [18][21] - **Cannabis Operations**: Achieved a 49.5% increase in net revenue to $37.4 million, although it faced an operating loss due to inventory write-offs [20][27] - **Liquor Retail**: Experienced a decline in net revenue to $139.4 million, down 3.6% year-over-year, with same-store sales decreasing by 2.6% [15][16] Strategic Initiatives - The company is pursuing the acquisition of 32 cannabis retail stores from 1CM Inc. for $32.2 million, pending regulatory review [12] - SNDL is investing in organic growth with plans for five new Cannabis store openings and two new Wine & Beyond stores in Q4 2025 [12] - The company continues to restructure SunStream Bancorp Inc. to enhance shareholder exposure to medical cannabis markets [12][27] Investment Portfolio - As of September 30, 2025, SNDL's investment portfolio had a carrying value of $410.8 million, with a positive operating income of $1.5 million generated during the quarter [27] - The company realized a gain of $5.3 million from the partial sale of its equity position in High Tide Inc. [27]

Financial Performance - Net revenue for Q3 2025 was CAD 244,219, an increase of 3% compared to CAD 236,892 in Q3 2024[6] - Gross profit for the nine months ended September 30, 2025, reached CAD 188,419, up from CAD 171,532 in the same period of 2024, reflecting a growth of 9.8%[6] - The company reported a net loss of CAD 25,141 for the nine months ended September 30, 2025, compared to a net loss of CAD 28,955 for the same period in 2024, indicating a reduction in losses by 13.5%[6] - For the nine months ended September 30, 2025, net revenue reached CAD 693,902, a significant increase from CAD 662,769 for the same period in 2024, representing a growth of approximately 4.2%[2] - The gross profit for the nine months ended September 30, 2025, was CAD 188,419, compared to CAD 171,532 in the previous year, indicating a year-over-year increase of about 9.8%[3] - The company reported an operating loss of CAD 18,100 for the nine months ended September 30, 2025, compared to a loss of CAD 27,722 for the same period in 2024, reflecting an improvement of approximately 34.3%[4] - The company reported a net loss attributable to owners of CAD 25.14 million for the nine months ended September 30, 2025, compared to a loss of CAD 27.65 million in the same period of 2024[87] Assets and Liabilities - Total assets decreased to CAD 1,318,061 as of September 30, 2025, down from CAD 1,349,242 at the end of 2024, a decline of 2.3%[4] - Cash and cash equivalents increased to CAD 240,581 as of September 30, 2025, compared to CAD 218,359 at the end of 2024, representing a growth of 10.2%[4] - Shareholders' equity decreased to CAD 1,099,291 as of September 30, 2025, down from CAD 1,133,356 at the end of 2024, a decline of 3%[4] - Cash and cash equivalents at the end of the period were CAD 240.58 million, a decrease of 8.5% from CAD 262.98 million at the end of September 2024[10] - The company recognized a liability of CAD 12.6 million for cash-settled Deferred Share Units (DSUs) as of September 30, 2025, compared to CAD 7.1 million at the end of 2024[80] - The balance of lease liabilities increased from CAD 152.273 million at December 31, 2024, to CAD 155.129 million by September 30, 2025[67] Inventory and Production - The company’s inventory decreased slightly to CAD 125,334 as of September 30, 2025, from CAD 127,919 at the end of 2024, a reduction of 2.1%[4] - Biological assets increased to CAD 3,507 as of September 30, 2025, up from CAD 1,187 at the end of 2024, with an estimated yield of 13,795 kilograms of dry cannabis[5] - During the nine months ended September 30, 2025, the company harvested 19,681 kilograms of dry cannabis, a substantial increase from 5,529 kilograms harvested in the same period of 2024[6] - The company recognized inventory write-downs of CAD 2.7 million for the nine months ended September 30, 2025, compared to CAD 3.4 million in the same period of 2024[7] Acquisitions and Investments - The company completed the acquisition of Indiva Limited for approximately CAD 21.1 million, which included the extinguishment of CAD 20.7 million in debt[24] - The fair value of identifiable net assets acquired from Indiva was CAD 26.51 million, resulting in a bargain purchase gain of CAD 5.46 million[27] - The Company entered into an agreement to acquire 32 cannabis retail stores for a total consideration of CAD 32.2 million, with a deposit of CAD 1 million held in escrow[96][97] - The acquisition of the 1CM stores is expected to close in the fourth quarter of 2025, pending regulatory approvals[99] - The Company acquired CAD 15.9 million in additional investments in listed common shares during the nine months ended September 30, 2025, and disposed of CAD 9.8 million for proceeds of CAD 15.1 million, realizing a gain of CAD 5.3 million[58] Operational Insights - SNDL's liquor retail operations are seasonal, with higher earnings typically reported in the third and fourth quarters due to consumer spending behavior[16] - The company has not observed significant seasonality in its cannabis operations, which continue to grow[16] - SNDL's investments segment includes capital deployment to opportunities in the cannabis sector and other investments[15] - The company is monitoring the impact of U.S. tariffs on imports, which may affect its financial performance, although no significant impact was noted for the nine months ended September 30, 2025[19] Shareholder Information - SNDL's common shares trade on the Nasdaq Capital Market and the Canadian Securities Exchange under the ticker symbol "SNDL"[17] - The total outstanding stock options decreased to 569,791 as of September 30, 2025, from 571,758 at the end of 2024, with a weighted average exercise price of CAD 12.43[76] - The company granted 4,082,665 Restricted Share Units (RSUs) during the nine months ended September 30, 2025, increasing the total outstanding RSUs to 13,021,475[78] - The weighted average exercise price of simple warrants outstanding as of September 30, 2025, was CAD 90.00, with a total of 21,440 warrants remaining[75] Other Financial Metrics - The company incurred restructuring costs of CAD 2,287 for the nine months ended September 30, 2025, compared to CAD 2,050 in the same period of 2024, an increase of 11.6%[6] - Investment income for the nine months ended September 30, 2025, was CAD 6,162, down from CAD 12,817 in the same period of 2024, a decrease of 52.1%[6] - The company recognized share-based compensation expense of CAD 15.190 million for the nine months ended September 30, 2025, compared to CAD 15.428 million for the same period in 2024[71] - The company’s cash provided by operating activities for the three months ended September 30, 2025, was CAD 14.29 million, compared to CAD 0.58 million in the same period of 2024[86] - The company’s interest income from investments at amortized cost for the nine months ended September 30, 2025, was CAD 1.41 million, down from CAD 2.74 million in 2024[84] - The company has contractual commitments totaling CAD 50,999 thousand, with CAD 50,652 thousand due within one year[93]

Core Points - SNDL Inc. will release its third quarter 2025 financial results on November 4, 2025, before market opens [1] - A conference call and webcast will follow the results release at 10:00 a.m. EDT [1] Company Overview - SNDL Inc. is one of the largest vertically integrated cannabis companies in Canada and the largest private-sector liquor and cannabis retailer [2] - The company operates retail banners including Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, and Spiritleaf [2] - SNDL's consumer-facing cannabis brands include Top Leaf, Contraband, Palmetto, Bon Jak, La Plogue, Versus, Value Buds, Grasslands, Vacay, Pearls by Grön, No Future, and Bhang Chocolate [2] - The company aims to deploy strategic capital through direct and indirect investments and partnerships in the North American cannabis industry [2]