SNDL Expands Cannabis Empire in Phased $32.2M 1CM Store Deal

EDMONTON, AB – January 07, 2026 – In a move that reinforces its dominance in the Canadian cannabis market, SNDL Inc. has completed the first stage of a significant retail acquisition from 1CM Inc., purchasing five cannabis stores across Alberta and Saskatchewan. This transaction, announced today, represents the initial step in a larger, two-phase agreement valued at $32.2 million, which will ultimately see SNDL acquire a total of 32 stores and significantly expand its national footprint.

The initial closing, valued at $5 million in cash, solidifies SNDL's presence in Western Canada. However, the market is keenly watching for the second and final phase: the acquisition of the remaining 27 stores, all located in Ontario, Canada's largest cannabis market. This second closing, valued at $27.2 million, is anticipated to occur in the first half of 2026, contingent on navigating the province's complex regulatory approval process.

The Strategic Blueprint for a Retail Empire

This acquisition is a clear execution of SNDL's long-term strategy: consolidating the fragmented Canadian cannabis retail market through strategic acquisitions to build a sustainable, large-scale portfolio. As Canada's largest private-sector liquor and cannabis retailer, operating banners like Value Buds and Spiritleaf, SNDL is leveraging its substantial cash reserves—reported at over $208 million in mid-2025—to fund the deal without incurring debt or diluting shareholder value.

The 32 stores being acquired from 1CM are not minor assets. For the fiscal year ending August 31, 2024, these locations generated an aggregate annual revenue of $53 million. 1CM's broader cannabis operations have shown robust growth, with cannabis-related revenue climbing 28% year-over-year to $66.6 million for the fiscal year ended August 31, 2025, driven largely by same-store sales growth in Ontario. By integrating these cash-flow positive locations, SNDL is poised to enhance its own impressive revenue streams. The company achieved its first-ever positive operating income in 2025, and analysts project its 2026 revenue could approach the coveted $1 billion mark, a milestone this acquisition will help secure.

SNDL’s strategy extends beyond simple expansion. The company has demonstrated a sophisticated approach to vertical integration, using its vast retail transaction data to optimize product offerings and supply chain efficiencies. The addition of 1CM's stores, which operate under the value-focused banners Cost Cannabis and T Cannabis, provides SNDL with deeper penetration into the price-sensitive consumer segment, a critical advantage in a market facing persistent margin pressures.

Navigating the Regulatory Gauntlet

The two-phase structure of the deal underscores a critical reality of the Canadian cannabis industry: M&A is often dictated by the pace of provincial regulators. The amended and restated arrangement agreement, dated December 15, 2025, was specifically designed to accommodate the differing timelines for regulatory approvals in Western Canada versus the more complex Ontario market.

Ontario's regulatory body, the Alcohol and Gaming Commission of Ontario (AGCO), requires a thorough due diligence process for the transfer of Cannabis Retail Store Authorizations (CRSAs). While recent amendments have streamlined parts of this process for licensed operators, the sheer scale of transferring 27 licenses at once necessitates a longer timeline, pushing the final closing into 2026.

Ironically, other regulatory shifts in Ontario may ultimately favor large players like SNDL. In January 2024, the provincial government raised the cap on the number of cannabis stores a single entity can operate from 75 to 150. This change was explicitly designed to facilitate consolidation, creating a more favorable environment for major retail chains to expand their market share. SNDL, with its deep operational experience and clean compliance record, is well-positioned to navigate the AGCO's requirements and complete the second phase of the acquisition successfully.

A Reshaped Competitive Landscape

The ongoing consolidation, exemplified by the SNDL-1CM deal, is fundamentally reshaping Canada's cannabis retail landscape. As giants like SNDL and its chief competitor, High Tide (operator of the Canna Cabana chain), grow larger, the pressure on smaller, independent retailers intensifies. The industry has already witnessed a net decline in the total number of stores in several provinces as single-store operators are either acquired or forced to close due to intense competition and tight margins.

Upon completion of the full transaction, SNDL's owned and franchised cannabis retail network will swell to 219 locations, further cementing its position as a market leader. The key question for the industry is how SNDL will integrate the new stores. It remains to be seen whether the company will rebrand the Cost Cannabis and T Cannabis locations under its own established banners, such as the discount-oriented Value Buds, or maintain the existing branding to capture a specific consumer demographic. This decision will be a telling indicator of SNDL's multi-brand strategy as it continues to absorb smaller competitors.

For 1CM, the sale represents a strategic divestment, allowing the company to realize significant value from its retail assets. The proceeds will be used for transaction costs and working capital, with a return of capital to shareholders anticipated following the final closing. This move allows 1CM to streamline its operations while providing SNDL with a turnkey expansion into key Canadian markets, marking another significant chapter in the maturation of Canada's cannabis industry.