SNDL Inc 6-K, filed Oct 27, 2026
SNDL Inc. (SNDL)
About this 6-K
SNDL Inc filed this 6-K on October 27, 2026.
SNDL Inc. reported third-quarter net revenue of $238.0 million, adjusted operating income of $5.2 million and record free cash flow of $20.0 million, while operating loss reached $(48.3) million after a $52 million impairment; it began a Cannabis Operations review. AI summary
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2026
Commission File Number: 001-39005
SNDL Inc.
(Translation of registrant's name into English)
#101, 17220 Stony Plain Road NW
Edmonton, AB T5S 1K6
Tel.: (780) 944-9994
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ ] Form 40-F [ X ]
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SNDL Inc. | ||
| (Registrant) | ||
| Date: October 27, 2026 | /s/ Alberto Paredero Quiros | |
| Alberto Paredero Quiros | ||
| Chief Financial Officer | ||
EXHIBIT INDEX
| Exhibit Number | Description | |
| 99.1 | Press Release dated October 27, 2026 |
EXHIBIT 99.1
SNDL Reports Third Quarter 2026 Financial and Operational Results
The Company Makes Significant Strategic Investments While Improving Underlying Financial Performance and Generating Record Quarterly Free Cash Flow of $20 Million
EDMONTON, Alberta, Oct. 27, 2026 (GLOBE NEWSWIRE) -- SNDL Inc. (NASDAQ/CSE: SNDL) (“SNDL” or the “Company”) reported its financial and operational results for the third quarter ended September 30, 2026. All financial information in this press release is reported in millions of Canadian dollars unless otherwise indicated.
SNDL has also posted a supplemental investor presentation on its website, found at https://sndl.com.
The Company will hold a conference call and webcast presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Tuesday, October 27, 2026. The conference call details can be found below.
MANAGEMENT HIGHLIGHTS
- Net revenue for the third quarter of 2026 was $238.0 million, representing a -2.5% decrease compared with the same period of the prior year. Cannabis Retail revenue increased by 0.7%, while Liquor Retail and Cannabis Operations revenue declined by -3.3% and -27.7%, respectively.
- Gross profit of $57.9 million for the third quarter of 2026 represents a decline of $(6.3) million, or -9.8%, compared with the same period of the prior year.
- Gross margin (1) was 24.3% in the third quarter of 2026, a decrease of 2.0 percentage points compared with the same period of the prior year, primarily reflecting weak performance of Cannabis Operations. Both retail segments delivered strong margin expansion and reached new quarterly records.
- Operating loss was $(48.3) million for the third quarter of 2026, reflecting a $52 million non-cash goodwill impairment charge related to the Cannabis Operations segment.
- Adj. operating income (1), which excludes impairment charges and restructuring costs, returned to positive territory at $5.2 million, an improvement of $14.8 million compared with the same period of the prior year.
- Cash flow was $(50.7) million, reflecting $60.8 million of strategic investments in the U.S. and $10.0 million of additional share repurchases, consistent with our capital allocation priorities.
- Free cash flow (1) reached a new quarterly record of $20.0 million in the third quarter of 2026, an increase of $3.3 million, or 19.5%, compared with the same period of the prior year, including a $10.6 million benefit associated with the initial unwinding of the Company’s captive insurance arrangement.
“Our third quarter results demonstrate improvement in SNDL’s underlying financial performance, including positive adjusted operating income and record quarterly free cash flow generation,” said Zach George, Chief Executive Officer of SNDL. “Cannabis Retail delivered record quarterly revenue and gross margin, Liquor Retail also reached a new record quarterly gross margin, and our Investments segment benefited from improved results from equity-accounted investees.”
“Cannabis Operations remained below expectations and recorded a non-cash impairment. While the quarter was impacted by inventory issues arising from the first half, we are taking decisive action to simplify the portfolio, reduce costs and concentrate resources on product categories where SNDL’s manufacturing capabilities, distribution reach and retail insights can support sustainable returns. The benefits of the actions taken during the quarter are expected to begin contributing to results in the fourth quarter. In addition to these immediate actions, the Company is initiating a strategic review of the Cannabis Operations segment to assess opportunities to improve its financial performance. The review will consider a range of strategic and operational alternatives, from potential asset divestitures to larger productivity initiatives.”
“The completion of the restructuring of Surterra Holdings, Inc. (“Parallel”) in July of this year, which reduced its debt burden by approximately US$842 million, and the subsequent rights offering, which increased our indirect equity ownership from approximately 67% to 92%, represent important steps in resetting Parallel’s capital structure and providing liquidity to support inventory, product availability and critical supply-chain infrastructure. SNDL-funded investments by SunStream Bancorp Inc. (“SunStream”) in a new cultivation facility in Gainesville, Florida, are expected to enhance Parallel’s cost structure. We are excited by the opportunity presented by our investment in Parallel and are actively exploring the feasibility of transitioning our indirect economic exposure to direct ownership and consolidation of qualifying U.S. medical cannabis operations, subject to applicable legal, regulatory, accounting and Nasdaq requirements.”
“We are encouraged by the progress made toward resolving the regulatory matters involving the Alcohol and Gaming Commission of Ontario (“AGCO”), which we expect will provide greater clarity for the Ontario franchise retail operations and future development opportunities, as further detailed later in this document and in the Q3 2026 Earnings Call presentation.”
“Across SNDL, our priorities remain disciplined capital allocation, improved operating performance and long-term value creation for shareholders. We have demonstrated that commitment through significant share repurchases, and we intend to remain aggressive when we believe the opportunity to acquire our shares represents an attractive use of capital. The recently announced potential $50 million substantial issuer bid (“SIB”) is a further step toward accelerating capital returns and reducing our outstanding share count,” concluded Zach George.
TOTAL COMPANY HIGHLIGHTS
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||
| ($000s) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||
| IFRS Financial Measures | ||||||||||||||||||
| Net revenue | 237,994 | 244,219 | -2.5 | % | 669,666 | 693,902 | -3.5 | % | ||||||||||
| Gross profit | 57,886 | 64,177 | -9.8 | % | 167,047 | 188,419 | -11.3 | % | ||||||||||
| Operating income (loss) | (48,317 | ) | (11,050 | ) | -337.3 | % | (65,272 | ) | (18,100 | ) | -260.6 | % | ||||||
| Change in cash and cash equivalents | (50,729 | ) | 32,357 | -256.8 | % | (107,622 | ) | 22,222 | -584.3 | % | ||||||||
| Non-IFRS Financial Measures (1) | ||||||||||||||||||
| Gross margin | 24.3 | % | 26.3 | % | -2.0 | pp | 24.9 | % | 27.2 | % | -2.2 | pp | ||||||
| Adjusted operating income (loss) | 5,249 | (9,512 | ) | 155.2 | % | (10,675 | ) | (12,713 | ) | 16.0 | % | |||||||
| Free cash flow | 19,954 | 16,692 | 19.5 | % | 5,692 | 7,733 | -26.4 | % | ||||||||||
(1) Gross Margin is a supplementary financial measure calculated by dividing Gross Profit by Net Revenue. Adjusted operating income (loss) and Free Cash Flow are specified financial measures that do not have standardized meanings under IFRS and therefore may not be comparable to similar measures reported by other companies. See “Non-IFRS Measures” section below for further information.
BUSINESS SEGMENT HIGHLIGHTS
SNDL operates and reports its business through four segments: Liquor Retail, Cannabis Retail, Cannabis Operations, and Investments. Additionally, a consolidated total for Cannabis is presented, encompassing the combined results of the two Cannabis segments, along with the revenue elimination associated with the Cannabis Operations sales to the provincial boards that are expected to be subsequently repurchased by the Company’s licensed retail subsidiaries for resale. Corporate and shared service expenses are reported as “Corporate”.
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||
| ($000s) | 2026 | 2025(2) | % Change | 2026 | 2025(2) | % Change | ||||||||||||
| Net Revenue | ||||||||||||||||||
| Cannabis Retail | 85,605 | 85,021 | 0.7 | % | 246,154 | 246,960 | -0.3 | % | ||||||||||
| Cannabis Operations | 27,040 | 37,389 | -27.7 | % | 88,704 | 107,544 | -17.5 | % | ||||||||||
| Intersegment Eliminations | (9,425 | ) | (17,579 | ) | 46.4 | % | (38,757 | ) | (51,391 | ) | 24.6 | % | ||||||
| Total Cannabis | 103,220 | 104,831 | -1.5 | % | 296,101 | 303,113 | -2.3 | % | ||||||||||
| Liquor Retail | 134,774 | 139,388 | -3.3 | % | 373,565 | 390,789 | -4.4 | % | ||||||||||
| Investments | — | — | 0.0 | % | — | — | 0.0 | % | ||||||||||
| Total | 237,994 | 244,219 | -2.5 | % | 669,666 | 693,902 | -3.5 | % | ||||||||||
| Operating Income | ||||||||||||||||||
| Cannabis Retail | 5,244 | 5,047 | 3.9 | % | 9,328 | 10,557 | -11.6 | % | ||||||||||
| Cannabis Operations | (64,693 | ) | (10,882 | ) | -494.5 | % | (80,836 | ) | (20,186 | ) | -300.5 | % | ||||||
| Total Cannabis | (59,449 | ) | (5,835 | ) | -918.8 | % | (71,508 | ) | (9,629 | ) | -642.6 | % | ||||||
| Liquor Retail | 6,035 | 6,591 | -8.4 | % | 5,899 | 10,884 | -45.8 | % | ||||||||||
| Investments | 7,861 | 1,543 | 409.5 | % | 8,340 | 1,775 | 369.9 | % | ||||||||||
| Corporate | (2,764 | ) | (13,349 | ) | 79.3 | % | (8,003 | ) | (21,130 | ) | 62.1 | % | ||||||
| Total | (48,317 | ) | (11,050 | ) | -337.3 | % | (65,272 | ) | (18,100 | ) | -260.6 | % | ||||||
| Adjusted Operating Income | ||||||||||||||||||
| Cannabis Retail | 5,284 | 5,047 | 4.7 | % | 9,403 | 10,557 | -10.9 | % | ||||||||||
| Cannabis Operations | (11,391 | ) | (10,220 | ) | -11.5 | % | (27,303 | ) | (16,258 | ) | -67.9 | % | ||||||
| Total Cannabis | (6,107 | ) | (5,173 | ) | -18.1 | % | (17,900 | ) | (5,701 | ) | -214.0 | % | ||||||
| Liquor Retail | 6,037 | 6,591 | -8.4 | % | 6,126 | 10,884 | -43.7 | % | ||||||||||
| Investments | 7,861 | 1,543 | 409.5 | % | 8,340 | 1,775 | 369.9 | % | ||||||||||
| Corporate | (2,542 | ) | (12,473 | ) | 79.6 | % | (7,241 | ) | (19,671 | ) | 63.2 | % | ||||||
| Total | 5,249 | (9,512 | ) | 155.2 | % | (10,675 | ) | (12,713 | ) | 16.0 | % | |||||||
(2) In 2026, the Company began allocating applicable direct and indirect overhead costs from the corporate segment to each individual operating segment all categorized within general and administrative expenses. The Company has recast the comparative period to illustrate the impact of these allocations had they been done during the prior period, as documented in the condensed interim Financial Statements.
Liquor Retail
SNDL is Canada's largest private-sector liquor retailer, operating as of October 26, 2026 in 165 locations, predominantly in Alberta, under its three retail banners: “Wine and Beyond” (16), “Liquor Depot” (19), and “Ace Liquor” (130).
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||
| ($000s) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||
| Net revenue | 134,774 | 139,388 | -3.3 | % | 373,565 | 390,789 | -4.4 | % | ||||||||||
| Gross profit | 36,390 | 36,704 | -0.9 | % | 96,828 | 100,993 | -4.1 | % | ||||||||||
| Gross margin | 27.0 | % | 26.3 | % | 0.7 | pp | 25.9 | % | 25.8 | % | 0.1 | pp | ||||||
| Operating income | 6,035 | 6,591 | -8.4 | % | 5,899 | 10,884 | -45.8 | % | ||||||||||
| Adjusted operating income | 6,037 | 6,591 | -8.4 | % | 6,126 | 10,884 | -43.7 | % | ||||||||||
- Net revenue for Liquor Retail continued to decline year over year in the third quarter of 2026, although at a slightly better rate than in previous quarters. Persistent softness in market demand continued to affect same-store sales(3), which decreased by -6.0% compared with the same period in the prior year.
- Operating income declined year over year, driven by lower revenue, increased promotional support, and higher SG&A expenses associated with the recent Wine & Beyond store openings, partly offset by strong gross margin expansion, which reached a new quarterly record.
(3) Same-store sales is a specified financial measure that does not have standardized meanings under IFRS and therefore may not be comparable to similar measures used by other companies. See “Non-IFRS Measures” section below for further information.
Cannabis Retail
SNDL is one of Canada’s largest private-sector cannabis retailers, operating as of October 26, 2026 in 193 locations under two retail banners: “Value Buds” (133) and “Spiritleaf” (60, of which 4 are corporate stores and 56 are franchise stores). The Company’s Cannabis Retail strategy is based on several pillars, including high-quality store locations, a broad product assortment and differentiated customer experiences. Using data and insights from a large volume of monthly transactions enables SNDL to leverage technology and analytics to inform and improve its retail strategy.
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||
| ($000s) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||
| Net revenue | 85,605 | 85,021 | 0.7 | % | 246,154 | 246,960 | -0.3 | % | ||||||||||
| Gross profit | 23,118 | 22,465 | 2.9 | % | 65,472 | 63,974 | 2.3 | % | ||||||||||
| Gross margin | 27.0 | % | 26.4 | % | 0.6 | pp | 26.6 | % | 25.9 | % | 0.7 | pp | ||||||
| Operating income | 5,244 | 5,047 | 3.9 | % | 9,328 | 10,557 | -11.6 | % | ||||||||||
| Adjusted operating income | 5,284 | 5,047 | 4.7 | % | 9,403 | 10,557 | -10.9 | % | ||||||||||
- Net revenue for Cannabis Retail returned to growth in the third quarter compared with the same period of the prior year, consistent with the previously anticipated inflection point, and reached a new quarterly record. Market contraction in our largest provinces (ON, AB) contributed to a -3.8% decline in same-store sales. This decline was partially offset by incremental revenue from new stores and Value Buds store conversions.
- Operating income increased compared with the same period of the prior year, primarily driven by gross margin expansion, which reached a new quarterly record, despite lapping a larger impairment reversal recorded in the third quarter of 2025.
- Subject to completion of definitive documentation and payment of a $200,000 monetary penalty, the anticipated resolution of the regulatory matters involving the AGCO is expected to allow the Value Buds franchise network to resume growth in Ontario following a pause of more than a year during the regulatory review. While the contemplated structure is expected to result in the deconsolidation of the Ontario retail operations from SNDL’s financial statements, we expect the overall commercial arrangements to substantially preserve SNDL’s net economics associated with these franchise locations, without retaining control over the retail operations in the province.
Cannabis Operations
SNDL has a diverse brand portfolio from value to premium, emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities and plans to continue evolving toward a cost-effective cultivation and manufacturing operation, the Cannabis Operations segment is a key enabler of SNDL’s vertical integration strategy.
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||
| ($000s) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||
| Net revenue | 27,040 | 37,389 | -27.7 | % | 88,704 | 107,544 | -17.5 | % | ||||||||||
| Gross profit | (1,622 | ) | 5,008 | -132.4 | % | 4,747 | 23,452 | -79.8 | % | |||||||||
| Gross margin | -6.0 | % | 13.4 | % | -19.4 | pp | 5.4 | % | 21.8 | % | -16.5 | pp | ||||||
| Operating income (loss) | (64,693 | ) | (10,882 | ) | -494.5 | % | (80,836 | ) | (20,186 | ) | -300.5 | % | ||||||
| Adjusted operating income (loss) | (11,391 | ) | (10,220 | ) | -11.5 | % | (27,303 | ) | (16,258 | ) | -67.9 | % | ||||||
- Our Cannabis Operations results remain below our expectations, and we are moving aggressively to reshape the segment into a more focused and efficient business. Most of the revenue decline in the third quarter was attributable to our exit from the unprofitable domestic dried flower category and our increased focus on higher-value products.
- Profitability was impacted by a $52 million non-cash goodwill impairment reflecting current business trends, as well as $6 million in other impacts, mostly driven by inventory adjustments related to the exit from the dried flower category and Jeeter cost variances. During the third quarter, we took decisive actions to reduce manufacturing costs and other operating expenses, particularly at our Kelowna manufacturing facility, including a reduction of more than 30% of the workforce at the site. The P&L benefits of these cost reductions are expected to begin contributing to results in the fourth quarter.
Investments
- As of September 30, 2026, the Company’s portfolio of cannabis-related investments had a carrying value of $485.2 million, including $467.7 million to SunStream Bancorp Inc. (“SunStream”). This carrying value was increased by $70.0 million during the third quarter of 2026, primarily driven by additional contributions to fund the buildout of the Gainesville, Florida cultivation facility, SNDL’s participation in Parallel’s rights offering, and the purchase of an incremental portion of Parallel’s debt.
- On July 27, 2026, the restructuring of Parallel was completed, providing SNDL with indirect majority economic exposure to the company. During the third quarter, SNDL participated in a Parallel rights offering, while other minority holders declined to participate, increasing SNDL’s indirect equity interest from approximately 67% to approximately 92%. SNDL continues to evaluate a pathway to directly own and consolidate Parallel’s U.S. medical cannabis operations while maintaining compliance with the applicable Nasdaq requirements. Consistent with recent public-market precedents, SNDL is evaluating structures that distinguish medical cannabis operations from adult-use exposure, with the latter expected to remain outside SNDL’s consolidated operations. The Company is actively advancing this work and expects to provide further clarity as the structure and timing are finalized, subject to applicable legal, regulatory, accounting and Nasdaq requirements.
- Following the completion of Parallel’s restructuring, SNDL also financed SunStream’s purchase of an additional portion of Parallel’s takeback debt at 75% of face value, increasing SunStream’s debt ownership from 39.4% to 69.4%.
- The Investments segment generated $7.9 million of operating income during the third quarter of 2026, including $6.9 million from SNDL’s share of profit from SunStream’s equity-accounted investees, primarily reflecting an increase in the valuation of Parallel.
- The previously disclosed restructuring process relating to Skymint continues. On April 1, 2026, the Michigan Supreme Court agreed to hear oral argument on applications for leave to appeal. The Court has not reached a decision on the merits. Timing and outcomes remain uncertain and are subject to court process and other factors.
- On April 23, 2026, the United States Department of Justice and the United States Drug Enforcement Administration issued an order placing Food and Drug Administration-approved cannabis products and qualifying state-regulated medical cannabis in Schedule III of the United States Controlled Substances Act, while initiating an expedited administrative process to consider the broader rescheduling of cannabis, including adult-use cannabis, from Schedule I to Schedule III. The administrative hearing concluded in July 2026, with a final determination on broader rescheduling still pending.
Equity Position
- $617.8 million of unrestricted cash, marketable securities and investments, including investments in equity-accounted investees, and no outstanding debt at September 30, 2026, resulting in a net book value of $1.0 billion.
- During the third quarter of 2026, the Company purchased for cancellation 5,431,300 common shares at a weighted average price, excluding commissions, of US$1.31 per share. Year-to-date through October 22, 2026, the Company had purchased for cancellation 23,088,153 common shares, resulting in 243,320,644 common shares outstanding.
- As recently communicated, the Company’s Board of Directors has directed management to pursue a possible substantial issuer bid (“SIB”) for an aggregate purchase price of up to C$50 million and at a price per share not exceeding C$1.92 (US$1.35). If completed and fully subscribed at the maximum price, the SIB could reduce the Company’s common shares outstanding by more than an additional 10%. SNDL will continue to evaluate opportunities to repurchase shares where management believes doing so is in the best interests of SNDL and its shareholders. In this context, and subject to approval by SNDL’s Board of Directors, we expect to proceed with the renewal of the share repurchase program upon its expiration on November 20, 2026, supported by continued free cash flow and potential targeted asset sales, including non-core real estate and other operating assets.
This press release is intended to be read in conjunction with the Company’s condensed consolidated interim financial statements and the notes thereto for the three and nine months ended September 30, 2026, and the accompanying Management’s Discussion and Analysis. These documents are available under the Company’s profile on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.shtml.
CONFERENCE CALL
The Company will hold a conference call and webcast presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Tuesday, October 27, 2026.
WEBCAST ACCESS
To access the live webcast of the call, please visit the following link:
https://edge.media-server.com/mmc/p/wcotys5n
REPLAY
A replay of the webcast will be available at https://sndl.com/financials/quarterly-results/default.aspx
ABOUT SNDL INC.
SNDL Inc. (NASDAQ: SNDL, CSE: SNDL), through its wholly owned subsidiaries, is one of the largest vertically integrated cannabis companies and the largest private-sector liquor and cannabis retailer in Canada, with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, and Spiritleaf. With products available in licensed cannabis retail locations nationally, 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. SNDL's investment portfolio seeks to deploy strategic capital through direct and indirect investments and partnerships throughout the North American cannabis industry. For more information, please visit www.sndl.com
For more information:
Tomas Bottger
Investor Relations, SNDL Inc.
O: 1.587.327.2017
E: investors@sndl.com
Forward-Looking Information Cautionary Statement
This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"), including, but not limited to, statements regarding the Company’s operational goals, plans and key priorities, the strategic review of the Cannabis Operations segment, including its scope, potential alternatives and outcomes, and the expected benefits of any actions resulting from the review, the Company’s ability to deploy capital and the expected benefits thereof, expectations related to the Jeeter contract, the growth opportunities available to SNDL and the expected benefits thereof, expectations with respect to the 1CM transaction, including the satisfaction of certain regulatory approvals, the progress of the Sunstream restructurings, expectations with respect to the Skymint and Parallel restructuring processes, the feasibility, structure, timing and expectations related to the Company obtaining direct ownership and control of, and consolidating, qualifying U.S. medical cannabis operations of Parallel, SNDL’s corporate restructuring program, including the timing to conclude the restructuring and expected benefits thereof, the expected benefits of the enterprise resource planning (“ERP”) system consolidation, SNDL’s ability to recover the senior secured notes held in Cannabist, the timing and expected impact of reclassifying cannabis from Schedule I to Schedule III under the United States Controlled Substances Act, the Company’s retail strategy, and any other potential forms of shareholder value creation. Forward-looking statements are frequently characterized by words such as “aim”, “anticipate”, “assume”, “believe”, “contemplate”, “continue”, “could”, “due”, “estimate”, “expect”, “goal”, “intend”, “may”, “objective”, “plan”, “predict”, “potential”, “positioned”, “pioneer”, “seek”, “should”, “target”, “will”, “would”, and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the Company’s business and the industry in which it operates and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond its control. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Please see “Risk Factors” in the Company’s annual information form dated March 11, 2026, and the risk factors included in our other public disclosure documents for a discussion of the material risk factors that could cause actual results to differ materially from the forward-looking information. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
| Condensed Consolidated Interim Statement of Loss and Comprehensive Loss | ||||||||||||||||
| (Expressed in thousands of Canadian dollars, except per share amounts) | ||||||||||||||||
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net revenue | 237,994 | 244,219 | 669,666 | 693,902 | ||||||||||||
| Cost of sales | 180,108 | 180,042 | 502,619 | 505,483 | ||||||||||||
| Gross profit | 57,886 | 64,177 | 167,047 | 188,419 | ||||||||||||
| Investment income | 927 | 1,777 | 3,472 | 6,162 | ||||||||||||
| Share of profit (loss) of equity-accounted investees | 6,934 | (234 | ) | 5,084 | (4,387 | ) | ||||||||||
| General and administrative | 43,284 | 45,967 | 132,732 | 137,702 | ||||||||||||
| Sales and marketing | 3,462 | 3,617 | 11,136 | 10,768 | ||||||||||||
| Depreciation and amortization | 12,659 | 12,928 | 38,145 | 39,076 | ||||||||||||
| Share-based compensation | 1,767 | 10,883 | 5,033 | 15,190 | ||||||||||||
| Restructuring costs | 577 | 1,134 | 1,608 | 2,287 | ||||||||||||
| Asset impairment, net | 52,331 | 2,051 | 52,151 | 2,971 | ||||||||||||
| Other income | — | — | (81 | ) | — | |||||||||||
| Research and development | — | 156 | 12 | 354 | ||||||||||||
| (Gain) loss on disposition of assets | (16 | ) | 34 | 139 | (54 | ) | ||||||||||
| Operating loss | (48,317 | ) | (11,050 | ) | (65,272 | ) | (18,100 | ) | ||||||||
| Other expenses, net | (2,464 | ) | (2,269 | ) | (6,424 | ) | (7,041 | ) | ||||||||
| Loss before income tax | (50,781 | ) | (13,319 | ) | (71,696 | ) | (25,141 | ) | ||||||||
| Income tax (expense) recovery | (8 | ) | — | 3,174 | — | |||||||||||
| Net loss | (50,789 | ) | (13,319 | ) | (68,522 | ) | (25,141 | ) | ||||||||
| Equity-accounted investees - share of other comprehensive (loss) income | (29 | ) | 7,709 | 10,625 | (13,250 | ) | ||||||||||
| Investments at fair value through other comprehensive income ("FVOCI") - change in fair value | 2,773 | 12,940 | 1,690 | 9,754 | ||||||||||||
| Comprehensive (loss) income | (48,045 | ) | 7,330 | (56,207 | ) | (28,637 | ) | |||||||||
| Condensed Consolidated Interim Statement of Financial Position | ||||||
| (Expressed in thousands of Canadian dollars) | ||||||
| As at | September 30, 2026 | December 31, 2025 | ||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 132,479 | 252,243 | ||||
| Restricted cash | 8,162 | 20,081 | ||||
| Marketable securities | 139 | 84 | ||||
| Accounts receivable | 31,734 | 27,643 | ||||
| Biological assets | 2,407 | 3,120 | ||||
| Inventory | 128,721 | 126,877 | ||||
| Prepaid expenses and deposits | 16,614 | 15,566 | ||||
| Investments | 106 | 484 | ||||
| Assets held for sale | 700 | 746 | ||||
| Net investment in subleases | 2,997 | 2,775 | ||||
| 324,059 | 449,619 | |||||
| Non-current assets | ||||||
| Long-term deposits and receivables | 2,457 | 4,526 | ||||
| Right of use assets | 131,608 | 138,353 | ||||
| Property, plant and equipment | 139,376 | 151,900 | ||||
| Net investment in subleases | 9,954 | 11,643 | ||||
| Intangible assets | 56,434 | 58,520 | ||||
| Investments | 17,314 | 11,574 | ||||
| Equity-accounted investees | 467,730 | 385,534 | ||||
| Goodwill | 75,238 | 124,248 | ||||
| Total assets | 1,224,170 | 1,335,917 | ||||
| Liabilities | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | 46,902 | 56,747 | ||||
| Lease liabilities | 35,706 | 35,462 | ||||
| 82,608 | 92,209 | |||||
| Non-current liabilities | ||||||
| Lease liabilities | 126,614 | 134,471 | ||||
| Other liabilities | 7,753 | 8,041 | ||||
| Total liabilities | 216,975 | 234,721 | ||||
| Shareholders’ equity | ||||||
| Share capital | 2,127,355 | 2,310,398 | ||||
| Warrants | 306 | 306 | ||||
| Contributed surplus | 53,377 | 54,038 | ||||
| Accumulated deficit | (1,225,053 | ) | (1,302,441 | ) | ||
| Accumulated other comprehensive income ("AOCI") | 51,210 | 38,895 | ||||
| Total shareholders’ equity | 1,007,195 | 1,101,196 | ||||
| Total liabilities and shareholders’ equity | 1,224,170 | 1,335,917 | ||||
| Condensed Consolidated Interim Statement of Cash Flows | ||||||||||||||||
| (Expressed in thousands of Canadian dollars) | ||||||||||||||||
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cash provided by (used in): | ||||||||||||||||
| Operating activities | ||||||||||||||||
| Net loss for the period | (50,789 | ) | (13,319 | ) | (68,522 | ) | (25,141 | ) | ||||||||
| Adjustments for: | ||||||||||||||||
| Income tax expense (recovery) | 8 | — | (3,174 | ) | — | |||||||||||
| Interest and fee income | (927 | ) | (1,675 | ) | (3,417 | ) | (5,849 | ) | ||||||||
| Change in fair value of biological assets | 585 | 180 | 594 | (2,559 | ) | |||||||||||
| Change in fair value of inventory sold | (276 | ) | 349 | 249 | 1,313 | |||||||||||
| Share-based compensation | 1,767 | 10,883 | 5,033 | 15,190 | ||||||||||||
| Depreciation and amortization | 13,893 | 13,972 | 41,998 | 42,108 | ||||||||||||
| (Gain) loss on disposition of assets | (16 | ) | 34 | 139 | (54 | ) | ||||||||||
| Inventory impairment and obsolescence | 3,455 | 1,833 | 6,057 | 2,663 | ||||||||||||
| Finance costs, net | 1,951 | 1,812 | 6,007 | 5,149 | ||||||||||||
| Change in estimate of fair value of derivative warrants | — | (1 | ) | — | (26 | ) | ||||||||||
| Unrealized foreign exchange loss (gain) | 180 | (153 | ) | (832 | ) | 40 | ||||||||||
| Transaction costs | — | — | 10 | — | ||||||||||||
| Asset impairment, net | 52,331 | 2,051 | 52,151 | 2,971 | ||||||||||||
| Share of (profit) loss of equity-accounted investees | (6,934 | ) | 234 | (5,084 | ) | 4,387 | ||||||||||
| Unrealized (gain) on marketable securities | — | (102 | ) | (55 | ) | (313 | ) | |||||||||
| Additions to marketable securities | — | — | 151 | 313 | ||||||||||||
| Income distributions from equity-accounted investees | 315 | — | 315 | 68 | ||||||||||||
| Interest received | 822 | 1,409 | 3,377 | 5,628 | ||||||||||||
| Exercise of cash-settled deferred share units | — | — | (474 | ) | — | |||||||||||
| Change in non-cash working capital | 2,185 | 14,194 | (8,805 | ) | (282 | ) | ||||||||||
| Net cash provided by operating activities | 18,550 | 31,701 | 25,718 | 45,606 | ||||||||||||
| Investing activities | ||||||||||||||||
| Additions to property, plant and equipment | (1,196 | ) | (5,185 | ) | (5,620 | ) | (8,853 | ) | ||||||||
| Additions to investments | — | — | (4,183 | ) | (16,414 | ) | ||||||||||
| Principal payments from investments | 121 | 129 | 359 | 27,293 | ||||||||||||
| Proceeds from disposal of investments | — | 15,058 | — | 15,058 | ||||||||||||
| Capital (contributions) distributions from equity-accounted investees | (60,762 | ) | 481 | (63,628 | ) | 4,273 | ||||||||||
| Proceeds from disposal of property, plant and equipment | 538 | — | 2,332 | 166 | ||||||||||||
| Acquisitions | — | — | (2,900 | ) | (1,000 | ) | ||||||||||
| Change in non-cash working capital | 75 | 39 | 712 | 10 | ||||||||||||
| Net cash (used in) provided by investing activities | (61,224 | ) | 10,522 | (72,928 | ) | 20,533 | ||||||||||
| Financing activities | ||||||||||||||||
| Change in restricted cash | 11,950 | — | 11,950 | — | ||||||||||||
| Payments on lease liabilities, net | (10,228 | ) | (9,920 | ) | (30,385 | ) | (29,217 | ) | ||||||||
| Repurchase of common shares | (10,042 | ) | (3 | ) | (43,113 | ) | (15,034 | ) | ||||||||
| Change in non-cash working capital | 265 | 57 | 1,136 | 334 | ||||||||||||
| Net cash used in financing activities | (8,055 | ) | (9,866 | ) | (60,412 | ) | (43,917 | ) | ||||||||
| Change in cash and cash equivalents | (50,729 | ) | 32,357 | (107,622 | ) | 22,222 | ||||||||||
| Adjustment on initial application of amendments to IFRS 9 on January 1, 2026 | — | — | (12,142 | ) | — | |||||||||||
| Cash and cash equivalents, beginning of period | 183,208 | 208,224 | 252,243 | 218,359 | ||||||||||||
| Cash and cash equivalents, end of period | 132,479 | 240,581 | 132,479 | 240,581 | ||||||||||||
NON-IFRS MEASURES
Certain specified financial measures in this news release are non-IFRS measures. These terms are not defined by IFRS and, therefore, may not be comparable to similar measures reported by other companies. These non-IFRS financial measures should not be considered in isolation or as an alternative for or superior to measures of performance prepared in accordance with IFRS. These measures are presented and described in order to provide shareholders and potential investors with additional measures in understanding the Company’s operating results in the same manner as the management team.
ADJUSTED OPERATING INCOME (LOSS)
Adjusted operating income (loss) is a non-IFRS financial measure which the Company uses to evaluate its operating performance in a similar manner to its management team. The Company defines adjusted operating income (loss) as operating income (loss) less restructuring costs (recovery), goodwill and intangible asset impairments and asset impairments triggered by restructuring activities.
The following tables reconcile adjusted to un-adjusted operating income (loss) for the periods noted.
| ($000s) | Cannabis Retail | Cannabis Operations | Cannabis Total | Liquor Retail | Investments | Corporate | Total | ||||||||||||||
| Three months ended September 30, 2026 | |||||||||||||||||||||
| Operating income (loss) | 5,244 | (64,693 | ) | (59,449 | ) | 6,035 | 7,861 | (2,764 | ) | (48,317 | ) | ||||||||||
| Adjustments: | |||||||||||||||||||||
| Restructuring costs | 40 | 313 | 353 | 2 | — | 222 | 577 | ||||||||||||||
| Goodwill and intangible asset impairments | — | 52,022 | 52,022 | — | — | — | 52,022 | ||||||||||||||
| Impairments triggered by restructuring | — | 967 | 967 | — | — | — | 967 | ||||||||||||||
| Adjusted operating income (loss) | 5,284 | (11,391 | ) | (6,107 | ) | 6,037 | 7,861 | (2,542 | ) | 5,249 | |||||||||||
| ($000s) | Cannabis Retail | Cannabis Operations | Cannabis Total | Liquor Retail | Investments | Corporate | Total | ||||||||||||||
| Nine months ended September 30, 2026 | |||||||||||||||||||||
| Operating income (loss) | 9,328 | (80,836 | ) | (71,508 | ) | 5,899 | 8,340 | (8,003 | ) | (65,272 | ) | ||||||||||
| Adjustments: | |||||||||||||||||||||
| Restructuring costs | 75 | 544 | 619 | 227 | — | 762 | 1,608 | ||||||||||||||
| Goodwill and intangible asset impairments | — | 52,022 | 52,022 | — | — | — | 52,022 | ||||||||||||||
| Impairments triggered by restructuring | — | 967 | 967 | — | — | — | 967 | ||||||||||||||
| Adjusted operating income (loss) | 9,403 | (27,303 | ) | (17,900 | ) | 6,126 | 8,340 | (7,241 | ) | (10,675 | ) | ||||||||||
| ($000s) | Cannabis Retail | Cannabis Operations | Cannabis Total | Liquor Retail | Investments | Corporate | Total | ||||||||||||||
| Three months ended September 30, 2025 | |||||||||||||||||||||
| Operating income (loss)(1) | 5,047 | (10,882 | ) | (5,835 | ) | 6,591 | 1,543 | (13,349 | ) | (11,050 | ) | ||||||||||
| Adjustments: | |||||||||||||||||||||
| Restructuring costs | — | 258 | 258 | — | — | 876 | 1,134 | ||||||||||||||
| Impairments triggered by restructuring | — | 404 | 404 | — | — | — | 404 | ||||||||||||||
| Adjusted operating income (loss) | 5,047 | (10,220 | ) | (5,173 | ) | 6,591 | 1,543 | (12,473 | ) | (9,512 | ) | ||||||||||
| ($000s) | Cannabis Retail | Cannabis Operations | Cannabis Total | Liquor Retail | Investments | Corporate | Total | ||||||||||||||
| Nine months ended September 30, 2025 | |||||||||||||||||||||
| Operating income (loss)(1) | 10,557 | (20,186 | ) | (9,629 | ) | 10,884 | 1,775 | (21,130 | ) | (18,100 | ) | ||||||||||
| Adjustments: | |||||||||||||||||||||
| Restructuring costs | — | 828 | 828 | — | — | 1,459 | 2,287 | ||||||||||||||
| Impairments triggered by restructuring | — | 3,100 | 3,100 | — | — | — | 3,100 | ||||||||||||||
| Adjusted operating income (loss) | 10,557 | (16,258 | ) | (5,701 | ) | 10,884 | 1,775 | (19,671 | ) | (12,713 | ) | ||||||||||
(4) In 2026, the Company began allocating applicable direct and indirect overhead costs from the corporate segment to each individual operating segment all categorized within general and administrative expenses. The Company has recast the comparative period to illustrate the impact of these allocations had they been done during the prior period.
GROSS MARGIN
Gross margin is a supplementary financial measure calculated as gross profit divided by net revenue for the periods presented. This measure evaluates the underlying profitability of our operations and provides useful information about the Company’s ability to price products effectively, manage input costs, drive operating efficiencies, and compare results across periods and business segments
FREE CASH FLOW
Free cash flow is a non-IFRS financial measure which the Company uses to evaluate its financial performance, providing information which management believes to be useful in understanding and evaluating the Company’s ability to generate positive cash flows as it removes cash used for non-operational items. The Company defines free cash flow as the total change in cash and cash equivalents less cash used for common share repurchases, dividends (if any), changes to debt instruments, changes to long-term investments, net cash used for acquisitions plus cash provided by dispositions (if any).
The following table reconciles free cash flow to change in cash and cash equivalents for the periods noted.
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Change in cash and cash equivalents | (50,729 | ) | 32,357 | (107,622 | ) | 22,222 | ||||||||||
| Adjustments: | ||||||||||||||||
| Repurchase of common shares | 10,042 | 3 | 43,113 | 15,034 | ||||||||||||
| Changes to long-term investments | 60,641 | (15,668 | ) | 67,301 | (30,523 | ) | ||||||||||
| Acquisitions, net of cash acquired | — | — | 2,900 | 1,000 | ||||||||||||
| Free cash flow | 19,954 | 16,692 | 5,692 | 7,733 | ||||||||||||
SAME-STORE SALES
Same-store sales is a non-IFRS financial measure which the Company uses to evaluate its financial performance in its retail segments. Same store sales provides information which management believes to be useful to investors, analysts and others in understanding and evaluating the Company’s sales trends excluding the effect of the opening and closure of stores.
Same store sales refers to the revenue generated by the Company’s existing retail locations during the current and prior comparison periods.
ADJUSTED EBITDA
Adjusted EBITDA is a non-IFRS financial measure which the Company uses to evaluate its operating performance. Adjusted EBITDA provides information to investors, analysts, and others to aid in understanding and evaluating the Company’s operating results. The Company defines adjusted EBITDA as net earnings (loss) before inventory and biological assets fair value and impairment adjustments, share of (gain) loss of equity-accounted investees, depreciation and amortization, share-based compensation expense, restructuring costs, asset impairment, gain or loss on disposal of property, other expenses, net, income tax expense (recovery) and excluding non-recurring items including ERP implementation costs and litigation settlements, net of recoveries.
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net earnings (loss) | (50,789 | ) | (13,319 | ) | (68,522 | ) | (25,141 | ) | ||||||||
| Adjustments: | ||||||||||||||||
| Inventory and biological assets fair value and impairment adjustments | 3,764 | 2,362 | 6,900 | 1,417 | ||||||||||||
| Share of loss (profit) of equity-accounted investees | (6,934 | ) | 234 | (5,084 | ) | 4,387 | ||||||||||
| Depreciation and amortization | 12,659 | 12,928 | 38,145 | 39,076 | ||||||||||||
| Share-based compensation | 1,767 | 10,883 | 5,033 | 15,190 | ||||||||||||
| Restructuring costs | 577 | 1,134 | 1,608 | 2,287 | ||||||||||||
| Asset (reversal) impairment | 52,331 | 2,051 | 52,151 | 2,971 | ||||||||||||
| Loss (gain) on disposition of PP&E | (16 | ) | 34 | 139 | (54 | ) | ||||||||||
| Other expenses, net | 2,464 | 2,269 | 6,424 | 7,041 | ||||||||||||
| Income tax recovery | 8 | — | (3,174 | ) | — | |||||||||||
| Non-recurring items | (15 | ) | (501 | ) | 549 | (696 | ) | |||||||||
| Adjusted EBITDA | 15,816 | 18,075 | 34,169 | 46,478 | ||||||||||||