SNDL stock declines in the after-market following the announcement of MCTO

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Sundial Growers Inc. (NASDAQ: SNDL) stock traded at 0.67 USD on Monday, April 4, 1:23 pm GMT-4, declining 4.13%since its announcement of having been granted a Management Cease Trade Order (MCTO) on Fri, April 1, 2022.

Announcement of MCTO

The company announced on March 28, 2022, that it has applied for MCTO owing to a predicted hold-up in the official filing of account statement for the fiscal year ended Dec 31, 2021. originally anticipated on March 31, 2022, under the recommendation of Canadian Security Law. The MCTO confines the CEO and CFO’s ability to trade in securities of the company until the reports have been filed and the MCTO lifted.

Completion of Acquisition of Alcanna Inc.

Sundial Growers Inc. made an announcement on March 31, 2022, that delineated the completion of its Plan of Acquisition Agreement with Alcanna Inc. which was announced earlier under Section 192 of the Canada Business Corporations; making Sundial Growers Inc. the most sizeable distributor of Cannabis and liquor in Canada. The terms of the agreement arrangement between the two companies were set originally on Oct 7, 2021, and amended on Jan 6, 2022. And the news caused an immediate however temporary rise in the stock value.

News about the legalization of Marijuana

Since the news about the House of Representatives voting for the legalization of the use and possession of Marijuana on a federal level broke out, all the cannabis stocks have seen a boom largely. SNDL stock rose to a phenomenal 22.8% following the news. However, the surge was predicted as not sustainable, since the stock price still remains less than $1.00 per share which is the minimum bid price requirement of Nasdaq. The company received an extension of 180 days to comply with it, and it intends to implement a reverse stock split to increase the stock value and decrease the number of outstanding shares; which hints that the stock is going to stay highly volatile in the near future.

Future Prospects

CEO of Sundial Growers Inc. Zach George called the Alcanna Inc. acquisition to be the “most significant development in the history of the two companies”, as they strive to develop a new business model in Canada that is unparalleled in its scale.

The company expects to disclose its Q4 and Fiscal Year 2021 results and wrap up its official filings no later than April 14, 2022.

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