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SNDL Reports Second Quarter 2025 Financial and Operational Results

  • The Company Delivers Positive Operating Income

EDMONTON, AB, July 31, 2025 /CNW/ - SNDL Inc. (NASDAQ: SNDL) (CSE: SNDL) ("SNDL" or the "Company") reported its financial and operational results for the second quarter ended June 30, 2025. 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 Thursday, July 31, 2025. The conference call details can be found below.

MANAGEMENT HIGHLIGHTS

  • Net revenue: In the second quarter of 2025, net revenue totaled $244.8 million, reflecting a growth rate of +7.3% compared to the same period in the previous year. This increase was primarily driven by strong growth of +17.4% in our combined Cannabis business, as well as return to growth in our Liquor retail segment.
  • Gross profit: Gross profit for the second quarter of 2025 reached $67.6 million, representing a +16.2% increase compared to the same period in the prior year.
  • Gross margin (1): The gross margin in the second quarter of 2025 was 27.6%, in line with the record achieved in the first quarter. This represented an improvement of +2.1 percentage points year-over-year.
  • Operating Income: The Company delivered positive operating income in the second quarter of 2025, totaling $5.0 million. This figure includes a $(0.8) million restructuring charge, resulting in an adjusted operating income of $5.8 million.
  • Cash flow: Cash flow was negative by $(12.6) million during the second quarter of 2025. This was primarily driven by working capital and CAPEX investments, an additional $3.8 million in net outflows related to long-term investments, and a $1.0 million deposit related to the 1CM acquisition.
  • Free cash flow (1): Free cash flow in the second quarter of 2025 was negative at $(7.9) million, as the strong P&L performance was more than offset by working capital investments to support international growth in the second half of the year, annual payments related to incentive programs and insurance premiums, as well as capital expenditures for future store openings.

"Achieving positive quarterly operating income and net earnings across both metrics for the first time in the Company's history during Q2 2025 marks a pivotal milestone and underscores the effectiveness of our strategic improvement agenda.

We experienced growth across all operating segments during the quarter, led by a Cannabis business that expanded at almost three times the rate of the Canadian recreational market, and a Liquor Retail segment that is successfully adapting to shifting consumer preferences. Notably, our Liquor Retail segment delivered same-store sales growth of 2.7% and higher net revenue despite running with five fewer stores compared to the same period last year.

Our operational rigor and focus on execution have driven significant gross margin expansion across all business units, while disciplined cost management contributed to a $5 million absolute reduction in G&A costs (including share-based compensation) year-over-year.

This strong performance gives us the confidence to continue investing in our business and people, affirming that we are on the path to delivering sustainable, long-term value to our shareholders." said Zach George, Chief Executive Officer of SNDL.

Delivering consistent financial performance improvements and reliability is core to our mission at SNDL, as we remain focused on long-term value creation and the execution of our strategic roadmap. In this context, during the second quarter of 2025 we advanced several strategic initiatives, including:

  • Entered into an arrangement agreement to acquire 32 cannabis retail stores from 1CM Inc. ("1CM") for a total cash consideration of $32.2 million, with the transaction expected to close during the third quarter of 2025.
  • Launched the Rise Rewards loyalty program, a highly anticipated initiative designed to offer Value Buds customers greater savings, rewards, and convenience. SNDL intends to expand the program across all retail banners in the future.
  • Approved investments of $9.5 million in CAPEX and working capital to organically expand both our Cannabis and Liquor retail footprints, with store openings planned during the next 9 months
  • Initiated a formal strategic review to evaluate SNDL's exposure to U.S. multi-state licensed cannabis enterprises and its current exchange listings – an important step in aligning our platform with future regulatory and market opportunities.

"Unlike many of its peers, SNDL's strong balance sheet provides a strategic advantage as we continue to build a resilient and growth-oriented business. With no debt and $208.2 million in unrestricted cash as of June 30, 2025, we are well-positioned to pursue a range of high-return organic and inorganic growth opportunities. In addition, the SNDL team is now proudly serving patients in the UK and the EU through the export of both branded finished goods and wholesale flower, and awaits the resolution of litigation in the United States in order to complete SunStream restructurings that will provide shareholders with exposure to dynamic medical markets including Florida and Texas.   

We are encouraged by the momentum we've built and energized by the progress we are making. Our team remains highly focused and motivated to navigate the challenges of a dynamic industry in pursuit of our ambition to become a global cannabis leader." concluded Zach George.

TOTAL COMPANY HIGHLIGHTS

 

Three months ended June 30

 

Six months ended June 30

 

($000s)

2025

 

2024

 

% Change

 

2025

 

2024

 

% Change

 

IFRS Financial Measures

            

Net revenue

 

244,769

  

228,127

  

7.3

%

 

449,683

  

425,877

  

5.6

%

Gross profit

 

67,601

  

58,164

  

16.2

%

 

124,242

  

108,564

  

14.4

%

Operating income (loss)

 

5,003

  

(4,834)

  

203.5

%

 

(7,050)

  

(9,211)

  

23.5

%

Change in cash and cash equivalents

 

(12,643)

  

(6,020)

  

-110.0

%

 

(10,135)

  

(12,107)

  

16

%

             

Non-IFRS Financial Measures (1)

            

Gross margin

 

27.6

%

 

25.5

%

 

2.1

pp

 

27.6

%

 

25.5

%

 

2.1

pp

Adjusted operating income (loss)

 

5,830

  

(4,613)

  

226.4

%

 

(3,201)

  

(9,079)

  

65

%

Free cash flow

 

(7,869)

  

(5,601)

  

-40.5

%

 

(8,959)

  

(11,989)

  

25

%

(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 a standardized meanings prescribed by 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 June 30

 

Six months ended June 30

 

($000s)

2025

 

2024

 

% Change

 

2025

 

2024

 

% Change

 

Net Revenue

            

Cannabis Retail

 

84,399

  

76,069

  

11.0

%

 

161,939

  

147,375

  

9.9

%

Cannabis Operations

 

35,836

  

24,976

  

43.5

%

 

70,155

  

47,371

  

48.1

%

Intersegment Eliminations

 

(17,395)

  

(13,478)

  

-29.1

%

 

(33,812)

  

(25,483)

  

-32.7

%

Total Cannabis

 

102,840

  

87,567

  

17.4

%

 

198,282

  

169,263

  

17.1

%

Liquor Retail

 

141,929

  

140,560

  

1.0

%

 

251,401

  

256,614

  

-2.0

%

Investments

 

  

  

0.0

%

 

  

  

0.0

%

Total

 

244,769

  

228,127

  

7.3

%

 

449,683

  

425,877

  

5.6

%

             

Operating Income

            

Cannabis Retail

 

8,062

  

3,902

  

106.6

%

 

13,224

  

2,860

  

362.4

%

Cannabis Operations

 

2,292

  

(1,916)

  

219.6

%

 

1,806

  

(1,025)

  

276.2

%

Total Cannabis

 

10,354

  

1,986

  

421.3

%

 

15,030

  

1,835

  

719.1

%

Liquor Retail

 

11,074

  

8,481

  

30.6

%

 

13,054

  

10,661

  

22.4

%

Investments

 

1,833

  

8,456

  

-78.3

%

 

232

  

21,535

  

-98.9

%

Corporate

 

(18,258)

  

(23,757)

  

23.1

%

 

(35,366)

  

(43,242)

  

18.2

%

Total

 

5,003

  

(4,834)

  

203.5

%

 

(7,050)

  

(9,211)

  

23.5

%

             

Adjusted Operating Income

            

Cannabis Retail

 

8,062

  

3,902

  

106.6

%

 

13,224

  

2,860

  

362.4

%

Cannabis Operations

 

2,663

  

(1,916)

  

239.0

%

 

5,072

  

(770)

  

758.7

%

Total Cannabis

 

10,725

  

1,986

  

440.0

%

 

18,296

  

2,090

  

775.4

%

Liquor Retail

 

11,074

  

8,481

  

30.6

%

 

13,054

  

10,661

  

22.4

%

Investments

 

1,833

  

8,456

  

-78.3

%

 

232

  

21,535

  

-98.9

%

Corporate

 

(17,802)

  

(23,536)

  

24.4

%

 

(34,783)

  

(43,365)

  

19.8

%

Total

 

5,830

  

(4,613)

  

226.4

%

 

(3,201)

  

(9,079)

  

64.7

%

Liquor Retail

SNDL is Canada's largest private sector liquor retailer, operating at July 30, 2025 in 165 locations, predominantly in Alberta, under its three retail banners: "Wine and Beyond" (13), "Liquor Depot" (19), and "Ace Liquor" (133). 

 

Three months ended June 30

 

Six months ended June 30

 

($000s)

2025

 

2024

 

% Change

 

2025

 

2024

 

% Change

 

Net revenue

 

141,929

  

140,560

  

1.0

%

 

251,401

  

256,614

  

-2.0

%

Gross profit

 

36,486

  

35,713

  

2.2

%

 

64,289

  

64,519

  

-0.4

%

Gross margin

 

25.7

%

 

25.4

%

 

0.3

pp

 

25.6

%

 

25.1

%

 

0.5

pp

Operating income

 

11,074

  

8,481

  

30.6

%

 

13,054

  

10,661

  

22.4

%

Adjusted operating income

 

11,074

  

8,481

  

30.6

%

 

13,054

  

10,661

  

22.4

%

  • Net revenue for Liquor Retail increased by 1% in the second quarter of 2025. While this growth was partly attributed to Easter consumption shifting to April 20, 2025, from March 31 in the previous year, it highlights ongoing market stabilization and our initiatives to boost store traffic. Same-store sales (2) rose by 2.7% in the second quarter.

(2)

Same store sales are specified financial measures that do not have standardized meanings prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures used by other companies. Refer to the "Non-IFRS Financial Measures and Other Measures" section of this MD&A for further information.

  • During the second quarter of 2025, the gross margin for Liquor Retail improved compared to the previous year, marking a record high for the segment. This growth in margin, along with further improvements in SG&A cost efficiencies, helped drive a significant increase in operating income for the period.

Cannabis Retail

SNDL is one of Canada's largest private-sector cannabis retailer, operating at July 30, 2025 in 184 locations under its three retail banners: "Value Buds" (123), and "Spiritleaf" (61, of which 4 are corporate stores and 57 are franchise stores). The Company's Cannabis Retail strategy is based on several pillars, including the quality of its store locations, its range of products, and the unique experiences provided to customers. 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 June 30

 

Six months ended June 30

 

($000s)

2025

 

2024

 

% Change

 

2025

 

2024

 

% Change

 

Net revenue

 

84,399

  

76,069

  

11.0

%

 

161,939

  

147,375

  

9.9

%

Gross profit

 

21,882

  

19,268

  

13.6

%

 

41,509

  

37,627

  

10.3

%

Gross margin

 

25.9

%

 

25.3

%

 

0.6

pp

 

25.6

%

 

25.5

%

 

0.1

pp

Operating income

 

8,062

  

3,902

  

106.6

%

 

13,224

  

2,860

  

362.4

%

Adjusted operating income

 

8,062

  

3,902

  

106.6

%

 

13,224

  

2,860

  

362.4

%

  • Net revenue for Cannabis Retail reached a new quarterly record for the segment. The year-over-year growth in the second quarter, supported by an 8.2% increase in same-store sales, significantly outpaced the market. This demonstrates the effectiveness of our Value Buds model.
  • Operating Income experienced substantial growth, supported by increases in revenue and gross margin, as well as productivity initiatives lowering SG&A. Additionally, in the second quarter of 2025 there was a $1.1 million reversal of fixed asset impairments recorded a few years ago, as store performance continues to improve.

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 June 30

 

Six months ended June 30

 

($000s)

2025

 

2024

 

% Change

 

2025

 

2024

 

% Change

 

Net revenue

 

35,836

  

24,976

  

43.5

%

 

70,155

  

47,371

  

48.1

%

Gross profit

 

9,233

  

3,183

  

190.1

%

 

18,444

  

6,418

  

187.4

%

Gross margin

 

25.8

%

 

12.7

%

 

13.1

pp

 

26.3

%

 

13.5

%

 

12.8

pp

Operating income (loss)

 

2,292

  

(1,916)

  

219.6

%

 

1,806

  

(1,025)

  

276.2

%

Adjusted operating income (loss)

 

2,663

  

(1,916)

  

239.0

%

 

5,072

  

(770)

  

758.7

%

  • Cannabis Operations continues to report significant growth in both revenues and profitability during the second quarter of 2025.
  • Net revenue growth was driven by edibles, following Indiva's acquisition in the fourth quarter of 2024, as well as by accelerating international sales, which reached $3.8 million in the second quarter of 2025.
  • Gross profit and Operating Income improvements are driven by efficiency improvements from scale as well as productivity initiatives, resulting in another quarter of positive operating income for the segment.

Investments

  • As of June 30, 2025, the Company has deployed capital to a portfolio of cannabis-related investments with a carrying value of $406.1 million, including $384.2 million to SunStream Bancorp Inc. ("SunStream"). This carrying value was reduced by $23.4 million during the second quarter of 2025, primarily due to a decrease in the USD to CAD exchange rate from 1.4376 on March 31 to 1.3643 on June 30, 2025. Additionally, there was a $3.1 million cash distribution related to a partial investment repayment from Ascend Wellness Holdings.
  • During the second quarter of 2025, the investment portfolio generated a positive operating income of $1.8 million, primarily driven by interests earned from our cash accounts.
  • In the second quarter of 2025, the Company purchased 2,272,645 common shares of High Tide, which, combined with the 4,350,000 shares purchased up to March 31, 2025, resulted in a total position of 6,622,645 shares, representing 8.2% ownership as of June 30, 2025.

Equity Position

  • $614.3 million of unrestricted cash, marketable securities and investments, including investments in equity-accounted investees, and no outstanding debt at June 30, 2025, resulting in a net book value of $1.1 billion.
  • The Board of Directors approved an amendment to the Company's Share Repurchase Program announced on November 14, 2024, to increase the maximum number of common shares that the Company may repurchase up to 10% of the public float of the Company.
  • Although the Company did not complete any share repurchases during the second quarter of 2025, SNDL will continue to evaluate opportunities to utilize the program to the extent that management believes it is in the best interest of SNDL's shareholders. As a reminder, during the fourth quarter of 2024 and the first quarter of 2025, the Company repurchased 10,764,107 common shares for cancellation.

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 months ended June 30, 2025, 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 Thursday, July 31, 2025.

WEBCAST ACCESS
To access the live webcast of the call, please visit the following link:

https://edge.media-server.com/mmc/p/3q3tisco

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, Spiritleaf and Superette. 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

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 and plans, the anticipated impact of the Company's strategic steps on long-term success and shareholder value, the anticipated impact of the Company's intentions and strategy with respect to the Rise Rewards loyalty program and retail operations, SNDL's plan to expand the program to additional retail banners, the anticipated benefit of the Company's strong balance sheet, the Company's strategy with respect to its operating segments, expectations with respect to the Parallel restructuring process, expectations with respect to the Board's strategic review process, the Company's margin improvement initiatives, the Company's ability to achieve long-term, sustainable profitability, growth and efficiencies, the Company's long-term strategic plan, the benefits of the Company's Investment Segment portfolio, the Company's retail strategy, expectations with respect to the Company's Cannabis Operations segment, , performance of the Company's investments, including through the SunStream joint venture, the timing and completion of the restructurings of with Parallel and Skymint, the timing and closing of the transaction to acquire assets from 1CM, repurchases under the Share Repurchase Program and the anticipated benefits thereof, 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 18, 2025, 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
June 30

  

Six months ended
June 30

 
  

2025

  

2024

  

2025

  

2024

 

Net revenue

  

244,769

   

228,127

   

449,683

   

425,877

 

Cost of sales

  

177,168

   

169,963

   

325,441

   

317,313

 

Gross profit

  

67,601

   

58,164

   

124,242

   

108,564

 
             

Investment income

  

1,529

   

3,204

   

4,385

   

7,240

 

Share of profit (loss) of equity-accounted investees

  

304

   

5,252

   

(4,153)

   

14,400

 
             

General and administrative

  

45,376

   

48,036

   

91,735

   

92,731

 

Sales and marketing

  

3,384

   

3,439

   

7,151

   

6,037

 

Research and development

  

98

   

109

   

198

   

146

 

Depreciation and amortization

  

12,920

   

13,519

   

26,148

   

27,662

 

Share-based compensation

  

2,919

   

4,883

   

4,307

   

9,726

 

Restructuring costs

  

827

   

221

   

1,153

   

132

 

Asset (recovery) impairment, net

  

(1,064)

   

919

   

920

   

2,575

 

(Gain) loss on disposition of assets

  

(29)

   

328

   

(88)

   

406

 

Operating income (loss)

  

5,003

   

(4,834)

   

(7,050)

   

(9,211)

 
             

Other expenses, net

  

(2,118)

   

(1,417)

   

(4,772)

   

(4,689)

 

Earnings (loss) before income tax

  

2,885

   

(6,251)

   

(11,822)

   

(13,900)

 

Income tax recovery

  

   

1,284

   

   

4,281

 

Net earnings (loss)

  

2,885

   

(4,967)

   

(11,822)

   

(9,619)

 
             

Equity-accounted investees - share of other comprehensive (loss) income

  

(20,611)

   

4,300

   

(20,959)

   

14,334

 

Investments at fair value through other comprehensive income ("FVOCI") - change in fair value

  

2,044

   

   

(3,186)

   

 

Comprehensive (loss) income

  

(15,682)

   

(667)

   

(35,967)

   

4,715

 
             

Net earnings (loss) attributable to:

            

Owners of the Company

  

2,885

   

(5,772)

   

(11,822)

   

(8,326)

 

Non-controlling interest

  

   

805

   

   

(1,293)

 
   

2,885

   

(4,967)

   

(11,822)

   

(9,619)

 

Comprehensive (loss) income attributable to:

            

Owners of the Company

  

(15,682)

   

(1,472)

   

(35,967)

   

6,008

 

Non-controlling interest

  

   

805

   

   

(1,293)

 

Condensed Consolidated Interim Statement of Financial Position
(Expressed in thousands of Canadian dollars)

As at

June 30, 2025

 

December 31, 2024

 
     

Assets

    

Current assets

    

Cash and cash equivalents

 

208,224

  

218,359

 

Restricted cash

 

19,823

  

19,815

 

Marketable securities

 

37

  

139

 

Accounts receivable

 

29,413

  

28,118

 

Biological assets

 

4,085

  

1,187

 

Inventory

 

133,466

  

127,919

 

Prepaid expenses and deposits

 

15,478

  

16,860

 

Investments

 

633

  

27,560

 

Assets held for sale

 

758

  

19,051

 

Net investment in subleases

 

2,776

  

2,832

 
  

414,693

  

461,840

 

Non-current assets

    

Long-term deposits and receivables

 

4,213

  

3,679

 

Right of use assets

 

116,759

  

115,435

 

Property, plant and equipment

 

154,854

  

145,810

 

Net investment in subleases

 

13,281

  

15,354

 

Intangible assets

 

59,927

  

61,325

 

Investments

 

21,293

  

8,427

 

Equity-accounted investees

 

384,152

  

413,124

 

Goodwill

 

124,248

  

124,248

 

Total assets

 

1,293,420

  

1,349,242

 
     

Liabilities

    

Current liabilities

    

Accounts payable and accrued liabilities

 

49,162

  

56,275

 

Lease liabilities

 

33,357

  

34,256

 

Derivative warrants

 

1

  

26

 
  

82,520

  

90,557

 

Non-current liabilities

    

Lease liabilities

 

117,180

  

118,017

 

Other liabilities

 

5,582

  

7,312

 

Total liabilities

 

205,282

  

215,886

 
     

Shareholders' equity

    

Share capital

 

2,295,254

  

2,346,728

 

Warrants

 

667

  

667

 

Contributed surplus

 

62,996

  

57,156

 

Accumulated deficit

 

(1,299,404)

  

(1,323,965)

 

Accumulated other comprehensive income ("AOCI")

 

28,625

  

52,770

 

Total shareholders' equity

 

1,088,138

  

1,133,356

 

Total liabilities and shareholders' equity

 

1,293,420

  

1,349,242

 

Condensed Consolidated Interim Statement of Cash Flows
(Expressed in thousands of Canadian dollars)

  

Three months ended
June 30

  

Six months ended
June 30

 
  

2025

  

2024

  

2025

  

2024

 

Cash provided by (used in):

            

Operating activities

            

Net earnings (loss) for the period

  

2,885

   

(4,967)

   

(11,822)

   

(9,619)

 

Adjustments for:

            

Income tax recovery

  

   

(1,284)

   

   

(4,281)

 

Interest and fee income

  

(1,318)

   

(3,218)

   

(4,174)

   

(7,309)

 

Change in fair value of biological assets

  

(664)

   

(336)

   

(1,775)

   

(568)

 

Share-based compensation

  

2,919

   

4,883

   

4,307

   

9,726

 

Depreciation and amortization

  

13,949

   

14,139

   

28,136

   

28,709

 

(Gain) loss on disposition of assets

  

(29)

   

328

   

(88)

   

406

 

Inventory impairment and obsolescence

  

239

   

1,069

   

830

   

2,982

 

Finance costs, net

  

1,647

   

2,157

   

3,337

   

3,782

 

Change in estimate of fair value of derivative warrants

  

(13)

   

(1,800)

   

(25)

   

(500)

 

Unrealized foreign exchange loss

  

180

   

51

   

193

   

155

 

Transaction costs

  

   

   

   

164

 

Asset (recovery) impairment, net

  

(1,064)

   

919

   

920

   

2,575

 

Share of (profit) loss of equity-accounted investees

  

(304)

   

(5,252)

   

4,153

   

(14,400)

 

Unrealized (gain) loss on marketable securities

  

(211)

   

14

   

(211)

   

69

 

Additions to marketable securities

  

313

   

   

313

   

 

Income distributions from equity-accounted investees

  

68

   

   

68

   

 

Interest received

  

1,283

   

2,649

   

4,219

   

5,821

 

Change in non-cash working capital

  

(13,763)

   

(4,650)

   

(14,476)

   

(9,709)

 

Net cash provided by operating activities

  

6,117

   

4,702

   

13,905

   

8,003

 

Investing activities

            

Additions to property, plant and equipment

  

(2,080)

   

(1,190)

   

(3,668)

   

(3,600)

 

Additions to investments

  

(7,417)

   

(900)

   

(16,414)

   

(900)

 

Principal payments from investments

  

257

   

2,135

   

27,164

   

2,268

 

Capital refunds from equity-accounted investees

  

   

   

   

168

 

Capital distributions from equity-accounted investees

  

3,073

   

   

3,792

   

 

Proceeds from disposal of property, plant and equipment

  

53

   

188

   

166

   

126

 

Acquisitions, net of cash acquired

  

(1,000)

   

(1,654)

   

(1,000)

   

(1,654)

 

Change in non-cash working capital

  

(47)

   

75

   

(29)

   

570

 

Net cash (used in) provided by investing activities

  

(7,161)

   

(1,346)

   

10,011

   

(3,022)

 

Financing activities

            

Change in restricted cash

  

   

150

   

   

(81)

 

Payments on lease liabilities, net

  

(11,785)

   

(9,706)

   

(19,297)

   

(17,222)

 

Repurchase of common shares

  

   

   

(15,031)

   

 

Proceeds from issuance of shares, net of costs

  

   

(57)

   

   

(57)

 

Issuance of common shares by subsidiaries

  

   

174

   

   

174

 

Change in non-cash working capital

  

186

   

63

   

277

   

98

 

Net cash used in financing activities

  

(11,599)

   

(9,376)

   

(34,051)

   

(17,088)

 

Change in cash and cash equivalents

  

(12,643)

   

(6,020)

   

(10,135)

   

(12,107)

 

Cash and cash equivalents, beginning of period

  

220,867

   

188,954

   

218,359

   

195,041

 

Cash and cash equivalents, end of period

  

208,224

   

182,934

   

208,224

   

182,934

 

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 June 30, 2025

 

Operating income (loss)

 

8,062

  

2,292

  

10,354

  

11,074

  

1,833

  

(18,258)

  

5,003

 

Adjustments:

              

Restructuring costs

 

  

371

  

371

  

  

  

456

  

827

 

Adjusted operating income (loss)

 

8,062

  

2,663

  

10,725

  

11,074

  

1,833

  

(17,802)

  

5,830

 

($000s)

Cannabis
Retail

 

Cannabis
Operations

 

Cannabis
Total

 

Liquor
Retail

 

Investments

 

Corporate

 

Total

 

Six months ended June 30, 2025

 

Operating income (loss)

 

13,224

  

1,806

  

15,030

  

13,054

  

232

  

(35,366)

  

(7,050)

 

Adjustments:

              

Restructuring costs

 

  

570

  

570

  

  

  

583

  

1,153

 

Impairments triggered by restructuring

 

  

2,696

  

2,696

  

  

  

  

2,696

 

Adjusted operating income (loss)

 

13,224

  

5,072

  

18,296

  

13,054

  

232

  

(34,783)

  

(3,201)

 

($000s)

Cannabis
Retail

 

Cannabis
Operations

 

Cannabis
Total

 

Liquor
Retail

 

Investments

 

Corporate

 

Total

 

Three months ended June 30, 2024

 

Operating income (loss)

 

3,902

  

(1,916)

  

1,986

  

8,481

  

8,456

  

(23,757)

  

(4,834)

 

Adjustments:

              

Restructuring costs

 

  

  

  

  

  

221

  

221

 

Adjusted operating income (loss)

 

3,902

  

(1,916)

  

1,986

  

8,481

  

8,456

  

(23,536)

  

(4,613)

 

($000s)

Cannabis
Retail

 

Cannabis
Operations

 

Cannabis
Total

 

Liquor
Retail

 

Investments

 

Corporate

 

Total

 

Six months ended June 30, 2024

 

Operating income (loss)

 

2,860

  

(1,025)

  

1,835

  

10,661

  

21,535

  

(43,242)

  

(9,211)

 

Adjustments:

              

Restructuring costs (recovery)

 

  

255

  

255

  

  

  

(123)

  

132

 

Adjusted operating income (loss)

 

2,860

  

(770)

  

2,090

  

10,661

  

21,535

  

(43,365)

  

(9,079)

 

GROSS MARGIN
Gross margin is a supplementary financial measure calculated by dividing gross profit by net revenue for the periods noted.

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
June 30

  

Six months ended
June 30

 

($000s)

 

2025

  

2024

  

2025

  

2024

 

Change in cash and cash equivalents

  

(12,643)

   

(6,020)

   

(10,135)

   

(12,107)

 

Adjustments

            

Repurchase of common shares

  

   

   

15,031

   

 

Changes to long-term investments

  

3,774

   

(1,235)

   

(14,855)

   

(1,536)

 

Acquisitions, net of cash acquired

  

1,000

   

1,654

   

1,000

   

1,654

 

Free cash flow

  

(7,869)

   

(5,601)

   

(8,959)

   

(11,989)

 

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.

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