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Sundial Growers Jumps on Announcement of New Joint Venture

Sundial and private equity firm SAF Group formed a 50/50 joint venture that could eventually seek a Canadian public listing.
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Canadian cannabis company Sundial Growers  (SNDL) - Get Sundial Growers Inc. 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. 

Read More: Buy Trulieve Cannabis, Not Sundial Growers

"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.

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"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.

Year-to-date, the stock is up more than 200% after being swept up in the Reddit-fueled retail investor revolution that helped drive companies like GameStop  (GME) - Get GameStop Corp. Class A Report to record highs. 

Sundial shares rose 14.1% to $1.62 per share trading on Monday.