Canadian cannabis company Sundial Growers (SNDL) - Get Report jumped more than 14% Monday after it announced it's forming a 50/50 joint venture with SAF Opportunities LP that will be called SunStream Bancorp.
SunStream will look for opportunities and investments in the cannabis sector with the formation of a special opportunities fund that will combine third-party money with an initial commitment of $100 million from Sundial.
The joint venture expects to also pursue a Canadian SPAC merger along with other investments. SAF Opportunities is part of SAF Group, a Canada-based private equity firm that has $2 billion in capital committed since 2014.
"SunStream will enable Sundial to remain focused on our core operations, while leveraging the strength of SAF's private equity and credit investment expertise on a global scale," said Zach George, Sundial's CEO.
"Our joint venture with Sundial is a capital-efficient way to bolster our participation in the fast-growing and attractive global cannabis industry," said Ryan Dunfield, Principal and Chief Executive Officer of SAF Group.
In February, Sundial shares sank after the company announced that it had filed a shelf registration with the Securities and Exchange Commission to issue up to $1 billion worth of securities over time.
Sundial said it had fully used its previous shelf offering after conducting a series of capital raises in recent months.
Separately in February, Sundial announced it was back in compliance with the Nasdaq's minimum bid price rule as a result of the company's common shares being at $1 per share or greater for at least ten consecutive trading days.
Sundial shares rose 14.1% to $1.62 per share trading on Monday.