Home Shares & Financial Sundial CEO Predicts Massive Closure of Cannabis Stores in Canada

Sundial CEO Predicts Massive Closure of Cannabis Stores in Canada

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2022-05-07-CEO of Sundial predicts massive closure of cannabis stores in Canada

The CEO of one of Canada's largest operators of adult cannabis retail outlets is sounding the alarm over a wave of potential closures.

In a letter to shareholders, Sundial Growers CEO Zachary George warned of a massive closure of cannabis stores. Canadian marijuana retailers face fierce competition from the proliferation of cannabis retail outlets. This leads to oversaturation and falling prices and margins.

Cannabis shops are at risk

According to Cannabis Benchmarks, an industry data collection company, 3.138 cannabis stores were open across Canada last month. More than a third of all retailers are at risk of closure, the CEO said. In Ontario alone, 1.468 regulated marijuana stores – nearly half of all legal cannabis stores in Canada.

“Most retailers are struggling to be profitable and we are now starting to see a trickle of closures on a weekly basis,” he wrote in the letter. Sundial said it operates Canada's largest privately owned marijuana retail network, with about 180 locations.

Sundial Growers

Those locations consist of company-owned stores, franchise locations, and others. Last year, Sundial bought Spiritleaf's retail network for $131 million Canadian dollars ($107 million) in cash and stock. The deal included 86 corporate and franchise locations, which have since grown to 104 stores. George said Sundial has closed 11 stores.

Sundial also owns approximately 63% of Nova Cannabis – a retailer operating in Alberta, Saskatchewan and Ontario – through its recent acquisition of Alcanna, one of the largest privately-owned alcohol retailers in North America, for $346 million.

Source: mjbizdaily.com (EN)

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