Nova Cannabis Inc.'s (TSX:NOVC) (OTC:NVACF) shareholders gave the green light to the proposed plan of arrangement involving Nova and SNDL Inc. (NASDAQ:SNDL), which will be completed in accordance with an agreement dated August 12 between the two companies.

Under the deal, SNDL will acquire all of the Nova Shares in exchange for, with respect to each Nova share, either $1.75 in cash or 0.58 of an SNDL share, subject to proration by the plan of arrangement contemplating the arrangement, the company said in a press release. The acquisition sum is roughly CA$40 million ($29.1 million).

Holders of a total of 53,807,109 Nova shares were present in person or represented by proxy at the shareholder's meeting held on Wednesday, representing roughly 86.67% of the issued and outstanding Nova shares as of the record date of Sept. 3, 2024.

Why It Matters

Zach George, SNDL's CEO said in August that the company is "committed to building a consumer-centric model at scale, supported by SNDL's robust shared service model, access to capital, and a well-developed cannabis retail pipeline."

Nova's retail expertise will support SNDL's cannabis retail portfolio by boosting programming, expanding data programs, advancing staff training initiatives and optimizing inventory management.

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The Calgary-based company said the deal is expected to generate savings through the streamlining of public company expenses and optimization of general and administrative costs.

In addition, SNDL's robust balance sheet would allow Nova's retail platform to continue to be supported in a competitive and challenging environment.

What's Next

The arrangement remains subject to receipt of a final order of the Court of King's Bench of Alberta with respect to the arrangement and the satisfaction or waiver of certain other customary closing conditions. The arrangement is expected to close on or around Oct. 18, 2024.

Following the closing of the deal, the Nova Shares are expected to be delisted from the TSX and Nova intends to apply to cease to be a reporting issuer in each of Canada's provinces and territories.

• Nova Cannabis Hits 100 Stores As SNDL Transfers Dutch Love To Streamline Retail Presence Via Strategic Divestiture

NVACF Price Action

Nova Cannabis' shares traded 3.10% lower at $1.25 per share after the market close on Wednesday afternoon.

SNDL Price Action

SNDL's shares traded 0.48% lower at $1.9903 per share during the pre-market session on Thursday morning.