Here's Why Sundial Growers Stock Jumped Thursday

The Motley Fool
The Motley Fool

What happened

Canadian cannabis company Sundial Growers (NASDAQ: SNDL) restructured its business this year to run a cannabis cultivation and production segment alongside an investment arm. It has subsequently increased its commitment to the investment business multiple times, and made a new announcement related to its future today. The market reacted positively, and Sundial stock popped 5.3% in early trading Thursday. As of 12:48 p.m. ET, Sundial shares remained up 4.5%.

So what

In March 2021, Sundial announced a strategic partnership to form SunStream Bancorp as a joint venture. The venture was meant to create an investment arm that Sundial would use to grow alongside its cannabis operations business. Sundial has now announced it has filed for an initial public offering (IPO) of Sunstream IVXX Investment Corp. The company said the entity will be a specialty finance company and anticipates it will be legally regulated as a business development company (BDC).

Image source: Getty Images.

Now what

Sundial initially announced it would commit 100 million Canadian dollars to the SunStream Bancorp joint venture that would allow it to continue to focus on its cannabis operations while also participating in new investments in the sector. The company subsequently increased the capital it added to SunStream twice, for a total commitment of more than $400 million in U.S. dollars.

The latest announcement to create a new public company as a SunStream affiliate is intended to broaden Sundial's interest in cannabis investments into the U.S. Details including number of shares and price range for the IPO haven't been announced, but Sundial said in a statement, "The purpose of the offering is to use the net proceeds therefrom to invest primarily in the debt of U.S. cannabis companies across the cannabis industry."

Investors are cheering the move to continue to seek growth through investments in other cannabis businesses. Focusing on U.S. businesses also brings more potential should the market open up if federal legalization materializes in the future.

Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming.

Cannabis legalization is sweeping over North America – 15 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.

And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.

Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.

Simply click here to get the full story now.

Learn more

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

Comments / 0

Comments / 0