News

SNDL share-price drop catches law firm’s attention

Published on May 7, 2026 by Pat Bulmer

Photo: Contributed

A sudden drop in share prices of cannabis and liquor company SNDL has caught the attention of another law firm.

Los Angeles-based Portnoy Law Firm says it “has initiated an investigation into possible securities fraud, and may file a class action on behalf of investors.”

SNDL’s stock price plummeted 29 cents per share, or 13.12%, to close at $1.92 on Dec. 15 following an announcement the Edmonton-based company had revised a deal to buy 32 cannabis stores from 1CM.

In the new agreement, five stores in Alberta and Saskatchewan changed hands on Jan. 7 while 27 in Ontario were still waiting for regulatory approval.

“Though the “total purchase price of $32.2 million in cash remained unchanged, the revised terms splits the acquisition into two closings,” Portnoy said in a news release. “This shift was necessary to ‘accommodate regulatory approval timelines,’ signaling to the market that the full integration of the 32 cannabis retail stores would face significant bureaucratic hurdles. The revelation that the deal’s completion was no longer immediate or singular led to an immediate loss of investor confidence and the rapid erosion of shareholder value.”

Aggrieved investors are encouraged to contact Lesley F. Portnoy by phone at 844-767-8529 or email to [email protected], or join the case at portnoylaw.com/sndl-inc.

Second law firm looked into SNDL suit

In March, New York-based Pomerantz LLP also said it was looking into possible legal action for the same reasons.

Law firms that specialize in class actions are always on alert for odd movements in stock prices or for items that don’t add up in financial reports.

SNDL’s latest financial report came out on April 29 and many categories were down from the same time period a year ago. The report covered the first quarter of 2026, ending on March 31.

“Beyond the normal seasonality that impacts the first quarter each year, Q1 2026 was particularly challenging, driven primarily by market softness across our business segments and operating territories,” said CEO Zach George.

“Cannabis operations experienced a larger relative decline in revenue, driven by overall softening market demand, destocking activity, and temporary adjustments in business-to-business order phasing,” the report said. “These declines were partially offset by growth in international sales, which increased from $1.8 million in the first quarter of 2025 to $3.5 million in the first quarter of 2026.

SNDL announced last month that cannabis division president Tyler Robson had left the company.

George said SNDL has taken several financial measures to boost results in the future, including buying back “4.5 million common shares for cancellation.”

Some of SNDL’s quarterly results

— Net revenue was $195.9 million, representing a 4.4% decrease compared with the same period a year ago “driven by market headwinds in both liquor and cannabis segments.”

“Net revenue for cannabis retail declined slightly in the first quarter compared with the same period of the prior year, driven by a same-store sales decline of -2.5%, partially offset by new store openings and Value Buds store conversions. New stores included the integration of five Cost Cannabis locations in Alberta and Saskatchewan,” the company said.

— Gross profit of $52.8 million is a decline of $3.8 million, or -6.8%, “driven by lower revenue across all segments and inventory adjustments and one-time costs in cannabis operations.”

— Operating loss of $9.1 million was an improvement of $2.9 million.

— Cash flow was negative by $26.7 million, “partly driven by cash outflows of $9.6 million related to share repurchases, $6.6 million associated with changes in long-term investments, and a $2.9 million payment for the acquisition of five Cost Cannabis retail stores.”

“We are confident that, as current market conditions continue to challenge existing operators, attractive opportunities may emerge in the short to mid-term,” said George. “More than ever, disciplined capital allocation remains a key priority for our management team, alongside continued execution on efficiency initiatives and profit-enhancement actions.”