SNDL Q2 2025 Earnings Report

SNDL EPS Results

• Actual EPS: $0.01
• Consensus EPS: -$0.04
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: N/A

SNDL Revenue Results

• Actual Revenue: $179.78 million
• Expected Revenue: $231.50 million
• Beat/Miss: Missed by -$51.72 million
• YoY Revenue Growth: N/A

SNDL Announcement Details

• Quarter: Q2 2025
• Date: 7/31/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 10:00AM ET

SNDL (NASDAQ:SNDL) engages in the production, distribution, and sale of cannabis products in Canada. The company operates through Liquor Retail, Cannabis Retail, Cannabis Operations, and Investments segments. It engages in the cultivation, distribution, and sale of cannabis for the adult-use and medical markets; sells wines, beers, and spirits through wholly owned liquor stores; and private sale of recreational cannabis through wholly owned and franchised retail cannabis stores. In addition, the company produces and distributes inhalable products, such as flower, pre-rolls, and vapes. It offers its products under the Top Leaf, Sundial Cannabis, Palmetto, and Grasslands brands. The company was formerly known as Sundial Growers Inc. and changed its name to SNDL Inc. in July 2022. SNDL Inc. was incorporated in 2006 and is headquartered in Calgary, Canada.

SNDL Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Achieved positive operating income and net earnings for the first time in Q2, marking a key milestone in the company’s profitability journey.
• Positive Sentiment: Cannabis segment grew at nearly three times the rate of the Canadian recreational market and the liquor retail business returned to revenue growth, driving gross margin expansion to a record 27.6%.
• Positive Sentiment: Maintained disciplined cost control, reducing G&A expenses by $5 million year-over-year despite inflationary pressures, supporting margin improvements.
• Negative Sentiment: Free cash flow was negative $7.9 million in Q2, reflecting working capital investments for international expansion, capital expenditures, and seasonal cash outflows.
• Negative Sentiment: U.S. assets under Sunstream remain tied up in court-mandated restructurings for Parallel and Skymint, delaying potential consolidation and operational control.

Presentation

[Operator]

Good morning, and welcome to the Second Quarter twenty twenty five Financial Results Conference Call. This morning, SNDL issued a press release announcing their financial results for the twenty twenty five second quarter ended 06/30/2025. This press release is available on the company's website at sndl.com and filed on EDGAR and SEDAR as well. The webcast replay of the conference call will also be available on the sndl.com website. SNDL has also posted a supplemental investor presentation in addition to the conference call presentation we will be reviewing today on its sndl.com website.

[Operator]

Presenting on this morning's call, we have Zach George, Chief Executive Officer and Alberto Petadero, Chief Financial Officer. Before we start, I would like to remind investors that certain matters discussed in today's conference call or answers that may be given to questions could constitute forward looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's financial reports and other public filings that are made available on SEDAR and EDGAR. Additionally, all financial figures mentioned are in Canadian dollars, unless otherwise indicated.

[Operator]

We will now make prepared remarks and then we'll move on to analyst questions. I would now like to turn the call over to Zach George. Please go ahead.

[Zachary George, CEO at SNDL]

Welcome to SNDL's Q2 twenty twenty five Financial and Operational Results Conference Call. The 2025 marks a pivotal milestone for SNDL as we report positive operating income and net earnings for the first time in our history, highlighting the effectiveness of our strategic improvement agenda. We experienced growth across all operating segments during the quarter, led by our cannabis business, which expanded at nearly three times the rate of the Canadian recreational market and ahead of our direct competitors. Our liquor retail segment also posted revenue growth, albeit marginal for the first time in several quarters. Each segment delivered year over year gross margin expansion and on a consolidated basis, we matched the record high margin achieved in the first quarter of twenty twenty five.

[Zachary George, CEO at SNDL]

Our teams continue to demonstrate strong productivity improvements, including synergies resulting from the Endeavour acquisition. We've maintained a disciplined focus on cost management, extending to G and A expenses, including share based compensation, which resulted in an absolute reduction of $5,000,000 year over year despite inflationary pressures and continued investments in growth. This robust 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. Our operational improvements are undeniable. Coupled with a strong balance sheet, unlike many of our peers, we believe this represents a highly compelling investment thesis as we continue building a resilient and growth oriented company.

[Zachary George, CEO at SNDL]

With no debt and over $200,000,000 in unrestricted cash, we are uniquely positioned to pursue a range of high return organic and inorganic growth opportunities. Beyond strengthening our competitive position in Canada, we are actively monitoring The United States market through our exposure to markets like Florida and Texas, while continuing to expand our international footprint. Today, we are proud to be serving patients in The UK and Continental Europe through the export of both branded finished goods as well as wholesale flour. Now I'll turn the call over to Alberto for more insights on our second quarter financial performance.

[Alberto Paredero-Quiros, CFO at SNDL]

Thank you, Zach. I want to remind everyone that the amounts discussed today are denominated in Canadian dollars, unless otherwise stated. Certain figures referred to during this call are non GAAP and non IFRS measures. For definitions of these measures, please refer to SMDL's Management Discussion and Analysis document. Our second quarter financial results demonstrate continued progress in overall performance, with notable improvements visible in the income statement.

[Alberto Paredero-Quiros, CFO at SNDL]

Net revenue in the 2025 reached $245,000,000 reflecting 7.3% increase compared to Q2 of last year. This growth was driven across all segments, as our cannabis business continues to outperform the market significantly, and we also saw our liquor retail segment returning to top line growth. Gross profit of $67,600,000 represents a $9,400,000 increase or 16.2% growth year over year, resulting in a two ten basis point improvement in gross margin, helping us match the record gross margin of 27.6 reported in the previous quarter. All segments contributed to this margin expansion. The biggest highlight is the achievement of positive operating income for the first time in SMDL's history.

[Alberto Paredero-Quiros, CFO at SNDL]

The $5,800,000 adjusted operating income represents a $10,400,000 year over year increase, a 226% growth. It is important to note that we only adjust operating income for restructuring related charges and intangible asset impairments. In Q2, we recorded $800,000 in restructuring charges and no intangible impairments, resulting in an unadjusted operating income of $5,000,000 This milestone underscores the effectiveness of our strategic focus and continuous improvement agenda. Free cash flow was negative by $7,900,000 in the second quarter, as the strong P and L performance was more than offset by working capital investments to support our international growth in the second half of the year, annual payments related to incentive programs and insurance premiums, as well as capital expenditures for the upcoming store openings. Our historical quarterly performance continues to display a clear upward trajectory, reflecting our sustained focus on growth and operational efficiency.

[Alberto Paredero-Quiros, CFO at SNDL]

Additionally, we observed that free cash flow tends to be impacted in the first half of the year due to seasonal factors. Looking at the contributions from each segment across our main financial KPIs, we can see how each segment is contributing to net revenue and gross profit growth. Most of this growth is driven by our cannabis segments, although we are also pleased to see the liquor retail segment returning to growth during the second quarter. The revenue elimination for cannabis is related to the sales from the cannabis operations segments into our own retail. This elimination is increasing as a result of the cannabis business growth.

[Alberto Paredero-Quiros, CFO at SNDL]

Adjusted operating income saw similar trends, with all operating segments reporting clear improvements compared to the 2024. The Corporate segment reflects the positive impact of our ongoing restructuring and cost optimization initiatives, while the Investment segment, although reporting a positive absolute operating income in the 2025, was affected in the comparison to the same period in prior year by lapping a 2024 favorable downstream valuation adjustment. In the 2025, no material valuation changes were recorded in our investment portfolio. Free cash flow for the quarter was negative $7,900,000 slightly below the prior year level despite notable earnings improvements. This was primarily driven by working capital investments supporting international growth plans for the second half of the year, alongside capital expenditures for future store openings.

[Alberto Paredero-Quiros, CFO at SNDL]

As was the case last year, the second quarter was also impacted by seasonal payments associated with annual incentive programs and insurance premiums. In the 2025, free cash flow was influenced by several key factors. Earnings made a significant positive contribution, with net income plus non cash add backs totaling 19,600,000.0 However, this strong earnings contribution was outweighed by working capital and CapEx investments, as well as seasonal cash outflows. Inventory growth in Q1 and Q2 was largely driven by the scale in support of increasing international export volumes. In Q2, we made our annual management incentive payout and insurance premium payments, resulting in a seasonal cash outflow of 12,000,000 Capital lease payments rose during the quarter, reflecting our continued organic expansion of the retail network ahead of anticipated openings in the second half of the year.

[Alberto Paredero-Quiros, CFO at SNDL]

Despite these growth investments, year to date was still $3,000,000 ahead of prior year. The Liquor Retail segment delivered net revenue of $141,900,000 in the second quarter, marking a 1% year over year increase. This modest growth was partly supported by a calendar shift in Easter timing, which favorably impacted our consumer demand compared to the prior year, driving a 2.7% growth in same store sales. Notably, our Wide and Beyond banner stood out with a robust 7.2% growth, contributing meaningfully to the segment performance. Additionally, private label sales remained a key growth driver, posting an 8.1% increase as consumers continued to gravitate towards high quality offerings at competitive pricing.

[Alberto Paredero-Quiros, CFO at SNDL]

While this quarter's growth may not set a precedent for future performance, we are encouraged by the trend's improvement compared to prior quarters. Gross profit of $36,500,000 represents an increase of 2.2% year over year. This improvement was driven by the revenue growth and 30 basis points expansion in gross margin, resulting in record high gross margin of 25.7% for the segment. Operating income reached $11,100,000 marking a $2,600,000 or 31% increase year over year. This performance was driven not only by revenue and gross profit gains, but also by enhanced efficiency in SG and A expenses.

[Alberto Paredero-Quiros, CFO at SNDL]

Cannabis retail achieved a new quarterly net revenue record of $84,400,000 representing 11% year over year growth. This performance was driven by an 8.2% increase in same store sales, flat outpaced in the market and underscoring the strength of our value based model. The combination of robust revenue expansion and a 60 basis points improvement in gross margin led to a 14% year over year increase in gross profit. The segment also saw a strong profitability with $8,100,000 in operating income, more than doubling versus prior year quarter. This growth was supported by gross profit momentum and continued efficiency improvements in SG and A expenses.

[Alberto Paredero-Quiros, CFO at SNDL]

Our Cannabis Operations segment continues to deliver the largest P and L improvements. Net revenue for the 2025 was $35,800,000 reflecting a 10,900,000 or 43% growth compared to the prior year. This growth was driven by edibles following the acquisition of Enviva in the 2024, as well by accelerating international sales. Gross profit achieved a significant increase compared to the prior year, driven by a 13 percentage point expansion in gross margin, reaching 25.8%. These improvements are mainly driven by our productivity program and initial synergies from the Indiva acquisition.

[Alberto Paredero-Quiros, CFO at SNDL]

As a result of the revenue growth and margin expansion, adjusted operating income for the second quarter came in at a positive $2,700,000 marking a $4,600,000 improvement year over year. Over to you, Zach, for additional comments related to our strategic priorities.

[Zachary George, CEO at SNDL]

Delivering consistent short term financial performance is very important to us, while we also remain focused on our three strategic pillars, which are essential to our long term success: growth, profitability and people. Starting with growth, our cannabis retail segment, particularly our successful value buds banner continues to outperform the market. As previously mentioned, this segment delivered net revenue growth of 11% in the 2025, supported by same store sales growth of 8.2%, which translated into a 30 basis point gain in market share. Liquor retail also grew revenue in the quarter despite the rationalization of some of our store footprint driven by a 2.7% same store sales growth. We are pleased to see how our Wine and Beyond banner grew 7.2% in the second quarter.

[Zachary George, CEO at SNDL]

Our consumers also reward us with their loyalty and appreciation of our unique offering of quality private label products at attractive prices, sales of which grew 8.1 during the quarter. In April, we announced the acquisition of One Centimeters, reinforcing our strategic commitment to expanding our cannabis retail footprint in Canada. We expect to close this transaction as planned by the end of Q3. Our teams are already evaluating opportunities to deploy organic investments to scale this new format and incorporate enhanced shopper insights once the OneCM assets are integrated into the SNDL portfolio. Our cannabis operations segment posted another strong quarter with 43% revenue growth.

[Zachary George, CEO at SNDL]

This performance was primarily driven by the contribution of our Indiva acquisition as well as additional momentum gained with our international partners resulting in $3,800,000 in export revenues for Q2. We see this run rate increasing substantially into Q3. Under our profitability strategic priority, our continued operational improvements and focus on cost management enabled us to achieve almost $6,000,000 in adjusted and $5,000,000 in unadjusted positive operating income in the second quarter. As previously mentioned, this is a significant milestone as it is the first time in our history that we have achieved quarterly positive operating income. Our upwards trajectory and pipeline of additional productivity projects gives us confidence in our ability to continue raising the bar in quarters to come.

[Zachary George, CEO at SNDL]

Year over year productivity improvements totaled $3,000,000 in the second quarter, driven primarily by efficiencies in procurement, manufacturing and cultivation within our cannabis operations segment. These improvements contributed to matching the record gross margin reported in the first quarter. Through focused resource allocation, effective execution of our restructuring program initiated mid last year and enhanced spend management, we achieved a $5,000,000 year over year reduction in overhead expenses. This represents a net decrease in absolute spending despite inflationary pressures and ongoing growth investments. Additionally, data licensing revenue contributed $4,700,000 in the quarter, providing further support to gross margin expansion.

[Zachary George, CEO at SNDL]

We continue to nurture and invest in our greatest competitive advantage, our people. We are pleased to see our strategic talent review process maturing and proving to be a valuable asset to the organization. Through assessments of individual potential, managers and their teams are able to craft personalized development plans that strengthen capabilities and maximize career growth, ultimately enhancing employee impact and overall company success. Building on insights gathered from our most recent annual employee engagement survey, along with deeper visibility of the workforce trends, we have solidified our action plan and begun executing several initiatives aimed at elevating our employee value proposition. We're also proud to continue onboarding world class diverse talent into key roles.

[Zachary George, CEO at SNDL]

Their contributions are already making a meaningful difference, and we are also strengthening our leadership bench. As we conclude this presentation, I'd like to express how encouraged we are by the momentum we've built and how energized we feel by the progress that we're 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. Once again, I'd like to thank our entire team for their contributions and our shareholders for their continued trust. I will now hand the call back to the operator for the analyst Q and A session.

[Operator]

We will now begin the analyst question and answer session. One one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press 11 again.

[Operator]

And the first question will be coming from Frederico Gomes of ATB Capital Markets. Your line is open.

[Frederico Gomes, Director - Institutional Research & Life Sciences at ATB Capital Markets]

Hi, morning. Thanks for taking my questions. Congrats on the great quarter. So you reported some good growth in international sales this quarter. At the same time, I believe that you had lower Producer Board sales.

[Frederico Gomes, Director - Institutional Research & Life Sciences at ATB Capital Markets]

So I have two questions on this. First, are those two related, such that maybe you are maybe prioritizing international exports as opposed to domestic sales? And second, could you talk about the outlook for those international sales? You mentioned some working capital investments there. So what sort of growth can we expect through the year? Thanks.

[Zachary George, CEO at SNDL]

Good morning, Frederico, and thank you for the question. There is quite a lot going on beneath the surface there. So I wouldn't extrapolate any kind of lack of focus on the Canadian recreational market. We are expecting meaningful growth into the back half of the year in terms of international, but it'll be off this very slow base. And we're monitoring those markets very carefully and developing great relationships with distributors on the ground in The UK and EU.

[Frederico Gomes, Director - Institutional Research & Life Sciences at ATB Capital Markets]

Perfect. Thank you. Second question on your Rise Rewards loyalty program. Can can you comment on how the program is rolling out so far? You know, how many members have signed up? And is that going in line with your statements?

[Zachary George, CEO at SNDL]

Yes. So we are making daily progress in terms of new loyalty program members. We're going to be making announcements as we hit key milestones, but it's still early days with the program only being out for several months. And so we're in the 6 figure range, but we're going to be putting out a lot more disclosure around that as we hit our key milestones. It's early days.

[Frederico Gomes, Director - Institutional Research & Life Sciences at ATB Capital Markets]

Got it. Just a final question about your view on cultivation, Zach. Just considering that we are seeing, I guess, an increase in wholesale prices in Canada, better supply demand here with exports international markets. So how how do you look at, you know, a potential expansion of your cultivation footprint? You know, is that something that could make sense?

[Frederico Gomes, Director - Institutional Research & Life Sciences at ATB Capital Markets]

Are you in any way, I guess, on the on the your cultivation side of things? And just how do you view that, you know, potential expansion?

[Zachary George, CEO at SNDL]

So I think it'd be worth noting that our Atholville facility, while medium sized in nature is now fully ramped and committed both internationally and domestically, for supply. Our cultivation efforts represent about 15% of our total biomass needs. So it's certainly a hedge in a rising price environment. Our relationships and the nature of our platform through our B2B partnerships and our strong retail positioning puts us in an interesting place for procurement relationships. And in the short term, we're actually seeing some additional supply hit the market.

[Zachary George, CEO at SNDL]

So we're watching the cycle very carefully. But we've been able to access biomass and the quantums required at specs that we need to serve consumers in Canada. So no real concerns at that point. Obviously, there are a number of opportunities in different cultivation mediums to grow our exposure there. We're trying to be very conservative with capital.

[Zachary George, CEO at SNDL]

And so to date, we've continued to take advantage of procurement opportunities in the market versus investing tens of millions of dollars in new cultivation facilities.

[Frederico Gomes, Director - Institutional Research & Life Sciences at ATB Capital Markets]

Thank you for the color.

[Operator]

And our next question will be coming from the line of Aaron Grey of AGT. Your line is open.

[Aaron Grey, MD & Head - Consumer Research at Alliance Global Partners]

Good morning. Thank you for the question. Nice quarter here. Just want to follow-up a bit for the question that Fred asked kind of regarding supply chain, maybe bring back to international. Are you guys satisfied with the supply chain you guys have today?

[Aaron Grey, MD & Head - Consumer Research at Alliance Global Partners]

Zach, you mentioned some of the relationships you're building with distributors or otherwise. You know, can you maybe touch on the margins you're achieving? I know a lot of, you know, your peers, you know, tout the higher margins in Europe versus Canada, but a lot of times it seems to depend on the supply chain that they're working with. Any commentary you can provide on that and then maybe just any market specific guidance in terms of where you're feeling most constructive in terms of international growth? Thank you.

[Zachary George, CEO at SNDL]

Good morning, and thanks for the question. Yeah, absolutely. Look, we see it's still very early days in Europe. You've got a tremendous growth opportunity, but there are the margins are extremely high today. We're seeing some volatility and some compression in spots.

[Zachary George, CEO at SNDL]

And there have been a few external shocks to the supply chain, which have also served to keep pricing higher. But these emerging markets in every sense of the word. And you have a number of middlemen earning outsized economic returns in that market. And we think there'll be pressure on those levels going further. So we're still committed absolutely to winning in Canada and we're unapologetic about that.

[Zachary George, CEO at SNDL]

But we're also excited about some of these new streams of cash flow and relationships we're building internationally. Alberto, would you like to comment further on margin profile?

[Alberto Paredero-Quiros, CFO at SNDL]

Yes. So our margin of international sales is certainly accretive. Obviously, there is a range depending on the customer and depending on the type of product that we're shipping. But they are they are nicely accretive to our national margins at the moment. It's one of the reasons as well why we're dedicating an important portion of our cultivation cultivation efforts towards international, given the good quality of flowers that we were able to produce in Ethelgou. And we are expecting still for the time being those margins to remain higher than Canadian average. But as Zach mentioned, obviously, things can change very quickly in in an emerging market.

[Aaron Grey, MD & Head - Consumer Research at Alliance Global Partners]

Okay. Really appreciate that color there. Second question for me is I wanna talk liquor for a bit. I know, you know, there's some some challenges in that segment. Nice to see return to growth in the quarter.

[Aaron Grey, MD & Head - Consumer Research at Alliance Global Partners]

Could you provide some commentary? Do you believe that was more specific to the things attributable to the company or broader category dynamics? I know alcohol as a whole has been under some pressure. So any further color you can provide because I believe you did mention those some positive same store sales there. Thank you.

[Zachary George, CEO at SNDL]

Yeah. It's a great question and arguably could be one of the most important stats of the quarter. This narrative around secular decline in alcohol consumption is certainly being challenged by our numbers. I would say that the approach to individual banner management is a big driver for the success in the quarter. Wine and Beyond really was the lead horse there and put up really impressive results.

[Zachary George, CEO at SNDL]

So sort of this notion of selection as brand and the incredible theater that's created at retail with north of 10,000 SKUs is something that's a real draw for the consumer. That's clear. And you may see us lean into that even further in the future. That being said, we're still observing shifting consumer behavior and a shifting relationship generally without Bev. So we're continuing to monitor that and not taking anything for granted.

[Aaron Grey, MD & Head - Consumer Research at Alliance Global Partners]

Okay, great. Appreciate the color. I'll jump back into the queue.

[Operator]

Our next question comes from Pablo Zunig of Zunig and Associates. Your line is open, Pablo.

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

Thank you, and good morning, everyone. Look, just first to start the housekeeping question. Do you disclose of the wholesale revenue number for cannabis, the 11,000,000 how much is international? And I'm sorry if I missed that, but can you clarify that?

[Alberto Paredero-Quiros, CFO at SNDL]

Yes, Pablo, the international sales were disclosed in our press release. And for the second quarter, they amounted to $3,800,000

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

Okay. All right. Thank you. Thank you for that. And then Zack, obviously, congratulations on the performance in domestic Canada, right?

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

As you said, you grew around, I think, high 5%, 16%. That's about 3%, three times the market average growth. But SNDL in Canada is still about number 12 with about 2% market share. When you see more medium, longer term, what is the aspiration there in terms of scaling up, whether organically or via M and A, to the top echelons in Canadian rec.

[Zachary George, CEO at SNDL]

Thanks, Pablo. Can you just repeat the question? You were asking about duration?

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

No, I'm sorry. I want to repeat again. I'm saying in the case of Canada, in domestic recreational sales, obviously in the quarter, you grew three times the market average growth rate, so that's great. But SNDL is still about number 12 in Canadian rec, with about 2% market share. So I'm just thinking more medium, longer term, what's the aspiration?

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

You know, do you want to be a top three player? How do you think about that?

[Zachary George, CEO at SNDL]

Oh, aspiration. Yeah, understood. Look, I think we've discussed this on calls previously, but if you really look at the Canadian marketplace, almost every single discernible industry has taken the shape of an oligopoly effectively with a small handful of very large dominant players and a handful of very active, strong peripheral operators. And we don't think that cannabis will be any different. We think that we're still coming out of the trough in the cycle and you still see significant consolidation ahead.

[Zachary George, CEO at SNDL]

So we're really focused on profitable growth. And there are many levers we could pull if market share was the sole objective. But as you can see, income and free cash flow are the biggest priorities for us.

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

Okay. Thank you. And then just moving on to The U. S. Assets.

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

I don't know if you can give an update in terms of where you are in terms of taking full ownership and control of those assets and just start consolidating them? I know you own them through Sunstream, right? So if you can just clarify where we are there in terms of consolidating those assets. And then I have a follow-up. Thank you.

[Zachary George, CEO at SNDL]

Sure. So Pablo, working backwards, any ability to consolidate those assets will require the closing of the restructurings. In the case of Parallel, you have a foreclosure process ongoing. In the case of Skymint, it's a receivership. And there are two, what I would call irritant litigations that we're still just waiting on rulings from the courts for.

[Zachary George, CEO at SNDL]

It's been a frustrating process for sure with an elongated timeline. And that's really driven by the lack of US operators' ability to access the federal bankruptcy courts. And so you end up in courts with in environments where there's much less experience with complex commercial and distress files. And so we should have received word from these courts now almost two months ago as an outside date, and we're still waiting. So we're eager to see those results and then we'll be able to move to close.

[Zachary George, CEO at SNDL]

And as you may have seen publicly, our board is reviewing listing status to make some strategic decisions about how to manage that exposure going forward.

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

Right, understood. And then, and again, in terms of what you can disclose, but are you able I mean, who's managing parallel right now? Mean, do you have does SNDL have any say in terms of or SunStream any say in the way that operation is being run, or you're more limited in terms of what you can do there, you can disclose that? Thank you.

[Zachary George, CEO at SNDL]

That's correct, Pablo. So SNDL is not engaged in any plant touching activities whatsoever in United States, and that's really critical to maintain our strong and positive relationship with NASDAQ. So at this point, we are not able to put a hand on the wheel, so to speak, in any form. But of course, we're monitoring as a creditor and certainly have a lot of ideas on operations that we are restricted from executing on given our operating experience internationally.

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

Right. And one very last one. So in the case of Pennsylvania and Texas, I understand that there was a relationship with IIPR. I think in the case of Pennsylvania, that operation has been given up, that lease pretty much. But in the case of Texas, Sunscreen still has a stake there, right?

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

You have not given up that operation. Can you clarify the difference between the Pennsylvania and Texas situation? Thank you. And that's it.

[Zachary George, CEO at SNDL]

Sure. Let me maybe give a broader picture for Parallel. So Parallel's asset base today really consists of operations in Florida, Massachusetts, and they're one of very few license holders today in Texas, although we believe that'll expand in the future. The majority of that business is levered to being a top five player in Florida. You're correct in that quite some time ago, the Pennsylvania assets were disclaimed.

[Zachary George, CEO at SNDL]

The stakeholders and special committee of Parallel in this context can make additional decisions into the close of that transaction to shed certain contracts or liabilities, but those decisions have not been made. And so we're eager to update our investors on progress with this as soon as we hear from the courts.

[Pablo Zuanic, Managing Partner at Zuanic & Associates]

Understood. Thank you very much.

[Operator]

And this concludes the question and answer session. I would like to turn the conference back over to Zach George for closing remarks.

[Zachary George, CEO at SNDL]

Thank you, operator, and thank you all for joining our second quarter conference call. We look forward to updating you on our progress in the near future. Have a great day.

[Operator]

This concludes today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.

Participants

Executives

• Zachary George, CEO
• Alberto Paredero-Quiros, CFO

Analysts

• Frederico Gomes, Director - Institutional Research & Life Sciences at ATB Capital Markets
• Aaron Grey, MD & Head - Consumer Research at Alliance Global Partners
• Pablo Zuanic, Managing Partner at Zuanic & Associates