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Both Alcohol And Cannabis: The SNDL Earnings Dive

By Shadd Dales On Aug 15, 2023

Alcohol and cannabis beverages have been big in the news lately. In our latest Trade To Black podcast, we’re talking about both. Today we focus on the earnings report of the company SNDL Inc, which is the largest private-sector liquor and cannabis retailer in Canada, straddling these two realms. While predominantly an alcohol company, they do possess notable cannabis assets.

Shadd Dales, Anthony Varrell, and Benjamin A. Smith dive in where we left off with earnings season by having a look at SNDLs’ report. With alcohol sales in steady decline and cannabis usage up amongst 20-somethings, it’s no surprise that some companies would see a potential market opportunity in crossing the line. Is it worth it? Well, some of the numbers from SNDL’s report have been eye-catching.

The second quarter 2023 witnessed a net revenue of $244.5 million, a 9.3% increase from the previous year. Gross margins also experienced growth, with $51.9 million in Q2, compared to $43.1 million in Q2 2022. Additionally, a significant improvement in net loss was observed, dropping from $74 million in Q2 2022 to $33.2 million in the latest quarter.

What’s the difference between alcohol and cannabis valuation? Anthony Varrell and Benjamin A. Smith weigh in on their performance, and thoughts on the company overall. The majority of revenue is alcohol-related, however the company strategically acquired Alcanna Inc, Valens, and Spiritleaf Holdings. This has significantly bolstered their cannabis operations and retail presence in Canada, and they’re now one of the largest vertically integrated cannabis companies here.

The investment arm has been decreasing, but with $754m in unrestricted cash, they’re “cashed up” and their net losses are decreasing. Is this good news for prospective investors? Do we like SNDL? We’ll take a look at the pros and cons of their cash position, plus investing in Columbia Care, right here, in this episode.

Shadd Dales is the Founder and President of The Dales Report and has an extensive background in the business media industry.

His work translates into over 15 years in mainstream media that included roles with BNN Bloomberg, CTV Properties and the iHeart Radio Network.

Shadd is considered one of the leading on air talents in both the cannabis and psychedelic space and has interviewed some of the most notable CEO names in the industry.

Shadd’s vision is to establish a content platform that is equivalent to a mainstream broadcast produced in a format that is relevant for today’s investor.