SNDL successful in bid to acquire marijuana producer Zenabis

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Calgary, Alberta-based SNDL said it successfully completed its acquisition of Zenabis Group.

In June, SNDL signed a deal to put in a stalking horse bid to buy the assets of the distressed Hexo Corp. subsidiary.

SNDL did not disclose the price of the transaction.

In a news release, SNDL said an order of the Québec Superior Court approved the acquisition by a wholly owned subsidiary of all Zenabis shares, as part of the consideration for the senior secured debt of Zenabis.

In preparation for the exit of Zenabis from the Companies’ Creditors Arrangement Act (CCAA) process, SNDL Chief Executive Officer Zach George said that “our operational teams have been working closely with Zenabis’ Monitor and leadership as we plan to integrate our two businesses.”

“As a result of the transaction, SNDL will acquire an indoor cultivation facility with considerable capabilities and proven outcomes, significant monetizable cannabis inventory, and valuable non-core real estate assets.”

SNDL said the core Zenabis asset is a 380,000-square-foot indoor growing facility in Atholville, New Brunswick.

The facility has an annual production capacity of approximately 46,000 kilograms (101,413 pounds) of dried cannabis and 15,000 kilograms of extraction.

Roughly CA$108 million was invested in the Atholville facility and a decommissioned 255,000-square-foot indoor facility in Stellarton, Nova Scotia.

SNDL is in nonbinding discussions to sell the Stellarton facility.

Quebec-based licensed cannabis producer Hexo bought Zenabis in 2021 for 235 million Canadian dollars ($185 million) in stock.

It was one of several acquisitions that ultimately pushed the Quebec business to the brink of bankruptcy.

Zenabis, then a subsidiary of Hexo, filed for creditor protection earlier this year.

Shares of SNDL are traded on the Nasdaq exchange.