As of Premarket trading, Sundial Growers Inc (SNDL) was trading at $0.66, up $0.01 or 1.16 percent from its previous closing price of $0.65. So far today, the stock has traded between $0.65 and $0.67.

Sundial Inc. announced Financial and Operational Results for the Third Quarter of 2021

In the third quarter of 2021, net earnings were $11.3 million, compared to a loss of $71.4 million the previous year. In the third quarter of 2021, adjusted EBITDA was $10.5 million, compared to a loss of $4.4 million in the third quarter of 2020. For the third quarter of 2021, net revenue from Cannabis divisions was $14.4 million, up 57 percent from the second quarter of 2021 and up 12 percent from the third quarter of 2020.

Cannabis divisions had a $1.8 million gross margin, including a $1.9 million loss from cannabis cultivation and production, compared to a $19.5 million loss in the third quarter of 2020. The third quarter of 2021 saw $3.3 million in investment and fee revenue, $6.0 million in realized gains on marketable securities, and $9.9 million in Sundial’s share of profit from equity accounted investees, compared to Nil in the third quarter of the previous year, which preceded the start of these activities.

At September 30, 2021, the company had $1.1 billion in cash, marketable securities, and long-term investments, compared to $1.2 billion on November 9, 2021, with $571 million in unrestricted cash and no outstanding debt. Inner Spirit was acquired on July 20, 2021, and Alcanna Inc. (“Alcanna’), Canada’s largest private liquor retailer with 171 stores, was acquired on October 7, 2021, following the end of the third quarter.

Sundial Growers Benefit from Liquor Business Acquisition 

Sundial put 22 million Canadian dollars into Indiva, a cannabis food company (NDVAF). Half of the 22 million CAD was invested as equity, while the other half was a term loan that Indiva would repay with interest. Sundial also revised the transaction this month, giving Indiva an additional 8.5 million CAD.

The interest rate on the loan was increased from 9% to 15% under the revised agreement.That adds a lot of value to Sundial’s offer. Furthermore, “100% of accrued interest is payable in cash and accrued on a monthly basis,” according to the agreement.

With all of this, Sundial is on track to produce monthly interest revenue of approximately 246,899 CAD, or $197,519 in US dollars. Of course, Indiva’s ability to repay the loan with interest is a factor, so Sundial investors should keep an eye on the situation.

Stock and Future Margins for SNDL

Over 170 cannabis businesses and 171 booze stores will be owned outright or controlled by Sundial across Canada. That places it firmly in the upper echelon of Canadian retail, let alone cannabis or alcohol.

One of the benefits of the purchase, according to Sundial’s management, will be a $15 million increase in EBITDA (earnings before interest and taxes) due to synergies discovered between the two companies. In the cannabis market, every dollar of earnings counts, so $15 million is significant.