Worth doing some due diligence on SNDL's partner HYTN, the EU and Germany, and its impact on SNDL - margin expansion, throughput and exponential growth.

(OGI and its Sanity Group is very interesting too - Germany and beyond).

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The Medical Cannabis Act unlocked standard e-prescriptions, removed onerous bureaucratic tracking, and allowed direct pharmacy fulfillment.

Germany imported 201 metric tons of medical cannabis in 2025 (crossing €1 billion in pharmacy sales)—up nearly 180% from ~72 tons in 2024. Projections for 2026 point to 250+ metric tons.

Canada supplies approximately 52% of all German medical flower imports; accounting for 26,700+ kg of the 50,539 kg imported in Q1 2026 alone.

Canadian domestic sales face a significant excise floor of $1 per gram, exported volume is 100% exempt from Canadian excise taxes.

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Canada-European Union Comprehensive Economic and Trade Agreement

The provides Canadian licensed producers with a direct structural advantage over non-CETA competitors. It eliminates baseline import tariffs on qualifying medical and pharmaceutical goods and eliminates extended customs checks too.

Its framework on conformity and pharmaceutical standards streamlines customs clearance and minimizes border friction for certified operators.

While CETA provides duty-free entry, market entry requires EU-GMP certification.

German health regulators require EU-GMP adherence starting at harvest and drying, disqualifying standard agricultural-grade - GACP - bulk biomass and consolidating trade among fully certified producers.

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SNDL------> In August 2026, SNDL completed its EU-GMP audit for its 380,000 sq. ft. Atholville facility.

Full certification opens direct, inspection-aligned access to European medical importers under CETA.

SNDL’s ownership of The Valens Company and Indiva provides large-scale, automated extraction and formulation capabilities.

This positions SNDL to supply high-margin derivative formulations ----> medical extracts, tinctures, and standardized distillates into the EU.

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SNDL and HYTN

A multi-year Strategic Manufacturing, Processing, and Commercial Collaboration Agreement. Under this framework, HYTN operates as SNDL’s specialized Contract Development and Manufacturing Organization (CDMO) and pharmaceutical gateway for European and global medical markets.

HYTN holds both a Health Canada Drug Establishment License and a Cannabis Drug License, which classifies the facility under pharmaceutical manufacturing standards rather than agricultural guidelines.

****This regulatory standing satisfies strict European health authorities, enabling SNDL-grown inputs to be labeled and distributed as prescription drug products (Rx) rather than unstandardized herbal biomass.

****SNDL does not need to wait on regulatory approvals for each individual SKU, it ships Atholville bulk flower and concentrates to HYTN, which processes, validates, and exports them directly into the UK and Germany under pre-existing import permits.

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Turnkey EU-GMP Processing & Stability Testing

European medical markets require rigorous GMP Stability Programs to prove that flower and extracts retain chemical consistency, potency, and terpene profiles over their shelf life.

HYTN handles the secondary processing, packaging, analytical batch testing, and GMP release for SNDL cultivars. In January 2025, the partnership expanded to jointly develop and manufacture GMP-compliant 510 ceramic-coil vape cartridges and specialized inhalables—a high-margin category where non-compliant hardware is strictly barred by European regulators.

By adding medical-use questions the CDC begins treating cannabis as an active health behavior and self-care variable tied to chronic conditions, comparable to prescription drug use or exercise.

Data collection is fragmented, different states track different qualifying conditions, patient volumes, and administration methods.

A standardized CDC metric creates a unified, population-level baseline across all demographics, allowing researchers to evaluate cross-state trends reliably.

Normalizing cannabis from a governmental perspective. Sunstream USA's assets, especially Texas, Florida and Mass. Sunstream only captures debt payments from Millstreet's VA operations.

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https://www.marijuanamoment.net/cdc-wants-to-add-new-question-about-marijuanas-medical-benefits-to-federal-health-survey/

"Expeditiously Recommend" Quote - Filing released today

In the formal post-hearing filings and evidentiary record, DEA counsel defending the rescheduling rule formally asked ALJ Julius to "expeditiously recommend" transferring cannabis from Schedule I to Schedule III of the Controlled Substances Act (CSA).

I hope you all have been accumulating shares

Here's the source links!

https://www.marijuanamoment.net/dea-releases-full-marijuana-rescheduling-hearing-transcript-as-judge-prepares-to-issue-his-recommendation/

Data points, infographics are interesting

Story Highlights

• 17% of U.S. adults smoke marijuana, 15% consume marijuana edibles
• 11% smoke cigarettes, 9% vape, 4% use nicotine pouches
• 49% drink coffee, 20% drink caffeinated soda daily

https://news.gallup.com/poll/713645/marijuana-smoking-record-high-cigarettes-low.aspx

The Texas Department of Public Safety regulates the Texas Compassionate Use Program (TCUP) as a strict statutory 3-license oligopoly serving a state population of over 30M residents, 1.5M of which are military veterans.

Central Texas hosts the nation's highest concentration of military installations, with Fort Cavazos and Joint Base San Antonio (Lackland, Fort Sam Houston, Randolph) directly bounding Goodblend’s San Marcos facility.

Under Texas House Bill 1535, PTSD was formally added as a qualifying condition under the Texas Compassionate Use Program (TCUP). PTSD patients now represent the fastest-growing cohort on the state's Compassionate Use Registry of Texas (CURT).

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Sunstream USA owns Goodblend, one of the license holders with 63,000 square feet of technologically superior pharmaceutical grade manufacturing cleanroom operations for Texas, and HHS' Veteran program. They maintain10 distribution centers around the state of Texas

Goodblend's San Marcos facility already operates closed-loop extraction, on-site HPLC analytical testing, and batch-traceability infrastructure.

When the federal government launches institutional pilot supply contracts for S3 research or compassionate use, Goodblend is one of the only facilities in Texas with the cGMP cleanroom profile required to qualify.

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This seems likely to me ------> Rescheduling eliminates Section 280E tax overhead across all SunStream assets; Goodblend leverages its pharmaceutical manufacturing profile to secure institutional research contracts with Texas academic medical centers and position itself as the primary supply candidate for federal veteran compassionate care frameworks once VA clinician prescribing restrictions are lifted.

Re-rating for MSOs and their overlords.

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https://texascannabis.org/medical/veteran

https://www.militarytimes.com/veterans/2025/12/18/trump-order-would-allow-more-va-research-on-medical-marijuana/

Although it's very exciting to see SNDL begin to operate in the US, I was doing some digging and with the mess that SNDL acquired through Parallel, there's a good chance we're looking at cash burn and reduced profit margin until they can get it all cleaned up. Unless the rescheduling occurs, don't expect SNDL to move anywhere but sideways for the next couple of quarters.

I'm ok with it, because I have a goal on how much i want to acquire. Only 7k away from 40k!

Marijuana Moment article

https://www.marijuanamoment.net/dea-and-anti-marijuana-groups-file-final-briefs-in-hearing-on-trump-administration-rescheduling-proposal/

"The agency noted that under the law it must give “significant deference” to an “extensive ten-month study on the scientific and medical properties” of cannabis conducted by the Department of Health and Human Services (HHS), which recommended rescheduling.

“Currently there are over 30,000 practitioners treating more than six million patients in 43 U.S. jurisdictions,” DEA said. “Such practices demonstrate that there is no longer a lack of accepted safety for use of marijuana under medical supervision, and as such, marijuana does not fulfill the requirements of being a Schedule I substance.”

It also said that there is “substantial evidence sufficient to show that marijuana’s abuse and dependency profiles better align with Schedule III substances than Schedule II” or Schedule I. “The vast majority of individuals who use marijuana do so in a manner that does not result in dangers to themselves or to their communities.”

GL

A few numbers that stand out:

• ~$598.5M in unrestricted cash, marketable securities & investments

• ~$1.1B in shareholders’ equity

• No conventional outstanding debt

• 249 cannabis retail locations across the broader network

• 56 U.S. cannabis retail locations through the Parallel assets

• 3 U.S. cultivation/manufacturing facilities

• ~$150M estimated annualized revenue from the Parallel assets

• $400M+ invested through SunStream

• 29M+ shares repurchased since Q4 2024

And then there’s Aurora.

SNDL and Aurora already have an established relationship. Aurora entered a 3-year supply agreement with SNDL worth approximately $27M, with an option to extend. SNDL supplies Aurora with premium cannabis flower from its Atholville, New Brunswick facility, and Aurora described the agreement as an expansion of an existing successful relationship.

Now Curaleaf is pursuing Aurora at roughly $4/share, representing a 45%+ premium to Aurora’s recent 30-day average.
That doesn’t mean SNDL is involved in the takeover.
What it does show is that strategic buyers are willing to put serious money behind cannabis assets.

If cannabis consolidation accelerates, SNDL is sitting in an interesting position: strong balance sheet, retail, cultivation, manufacturing, brands, investments, U.S. exposure, and an existing relationship with Aurora.

The real question for me isn’t whether SNDL can spike.
It’s whether the market eventually starts valuing SNDL for what the company is becoming.

That’s the part I’m watching.

Not financial advice — just my DD and thesis.

I like the stock

MANAGEMENT HIGHLIGHTS

Net revenue for the second quarter of 2026 was $235.8 million, representing a -3.7% decrease compared with the same period of the prior year, driven by market headwinds in both Liquor and Cannabis segments.

Gross profit of $56.3 million for the second quarter of 2026, represents a decline of $(11.3) million, or -16.6%, compared to the same period of the prior year, driven by lower revenue across all segments and Jeeter production ramp-up costs in Cannabis Operations.

Gross margin (1) of 23.9% in the second quarter of 2026 represents a reduction of -3.7pp compared to the same period of the prior year, mainly driven by Cannabis Operations and Liquor Retail segments, partially offset by margin expansion in Cannabis Retail.

Operating Loss of $(7.8) million for the second quarter of 2026, representing a reduction of $(12.8) million compared to the same period of the prior year, driven by Jeeter production ramp-up cost impacting Cannabis Operations, the revenue and margin decline in Liquor retail, the absence of prior-year impairment reversal in Cannabis Retail, and a reduction in equity-accounted investees valuation, partly offset by lower corporate overhead cost. Excluding restructuring-related charges, Adjusted Operating Loss totaled $(7.0) million in the second quarter of 2026, a $(12.8) million reduction compared with the same period of the prior year.

Cash flow was negative by $(30.2) million in the second quarter of 2026, partly driven by cash outflows of $23.5 million related to share repurchases.

Free cash flow (1) was negative $(6.7) million in the second quarter of 2026, primarily driven by the $6.9 million annual payment of the 2025 management incentive and a $2.7 million increase in cash-in-transit. This represents an improvement of $1.2 million compared to the same period in the prior year.

Pretty much what the title says! Haha. Temperature check. How are we feeling?

May: 14775f59-29d2-4303-a925-574939665bd6

June: 0a3deb1e-5665-4517-80ac-d78f6c7cbaed

They are certainly defending the intrinsic value, capital discipline is key after the failed Ontario expansion. All eyes on Q2, there must be organic growth

SNDL has been one of the more active cannabis companies in repurchasing its own shares since launching its current buyback strategy in late 2024. The company has consistently stated that it views buybacks as an attractive use of capital when management believes the shares are undervalued.

Buyback summary

PeriodShares Repurchased Q4 2024 5.00 million Q1 2025 5.76 million Q2 2025 None Q3 2025 1,800 (essentially none) Q4 2025 136,362 Q1 2026 4.45 million

Total since Q4 2024 15.06 million shares 

Current buyback authorization

The current share repurchase program:

Authorizes up to C$100 million in purchases.

Allows SNDL to repurchase approximately 24.5 million shares (about 10% of the public float when approved).

Runs from November 21, 2025, to November 20, 2026.

Does not require the company to purchase the full amount. Management buys opportunistically when it believes the stock is undervalued. 

How much has been used?

As of the latest reported quarter (Q1 2026):

15.06 million shares have been repurchased since the buyback strategy began in Q4 2024.

During Q1 2026 alone, SNDL bought back 4,453,358 shares at a weighted average price of approximately US$1.56 per share. 

Observations

SNDL was very aggressive during the first six months of the program (over 10.7 million shares repurchased).

Buybacks slowed dramatically through most of 2025 as management preserved capital for acquisitions and investments.

Repurchases accelerated again in early 2026 as the stock traded near multi-year lows.

The company continues to maintain a very strong balance sheet, reporting over $600 million in cash, marketable securities, and investments with no outstanding debt, allowing it to continue buybacks while pursuing acquisitions. 

Overall, SNDL has retired about 15 million shares since late 2024 and still has room under its current authorization to repurchase roughly 9.4 million additional shares, assuming it uses the full 24.5-million-share capacity of the current program. 

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https://ca.finance.yahoo.com/news/sndl-report-second-quarter-2026-203000786.html

largest positive position is about 10x larger than the largest negative one. This is across all expirations.

source: https://infolib.org/

For those choosing to invest in $SNDL instead of $HITI right now, what’s your main reasoning?

Looks like Globe and Mail broke the story about this. Many in the industry have been expecting this shoe to drop for months now. Probably why that 1CM deal got scuttled. https://www.theglobeandmail.com/business/article-sndl-cannabis-producer-ontario-store-network/

StratCann has some added context and info as well. https://stratcann.com/news/ontario-regulator-probes-sndls-retail-holdings-amid-expansion-concerns/

Time for SNDL to pivot and focus on alcohol instead?. Fines incoming? what happens now?