Sundial Growers Inc. (NasdaqCM:SNDL) entered into an agreement to acquire Inner Spirit Holdings Ltd. (CNSX:ISH) for approximately CAD 110 million on May 4, 2021. Under the terms of the Agreement, Inner Spirit's shareholders will receive, for each Inner Spirit common share held, (i) $0.30 in cash and (ii) 0.0835 of a Sundial common share. The parties to use their commercially reasonable efforts to cause Inner SpiritShares and Warrants to be de-listed from the CSE and, as applicable, withdrawn from the OTCQB Venture Market with effect immediately following the acquisition by Sundial of Inner Spirit shares pursuant to the Arrangement.

The Agreement also provides for the payment of a reciprocal termination fee of $4 million in the event the Transaction is terminated in certain specified circumstances. The implementation of the Transaction will be subject to the approval of at least two thirds of the shares voted by Inner Spirit shareholders at a special meeting expected to be convened by Inner Spirit in July 2021, and the receipt of applicable orders from the Court of Queen's Bench of Alberta and applicable regulatory approvals, Sundial and Darren Bondar shall have entered into a lock-up agreement with respect to the Purchaser Shares to be received by Darren Bondar in connection with the Arrangement, with the lock-up period not to exceed six (6) months, Inner Spirit's Shareholders shall not have exercised their Dissent Rights in connection with the Arrangement with respect to more than 10% of the outstanding Company Shares, the Purchaser Shares to be issued to Company Shareholders pursuant to the Arrangement shall have been approved for listing on NASDAQ, subject to official notice of issuance. The Transaction has been unanimously approved by the Boards of Directors of Sundial and Inner Spirit and has resolved to recommend that Inner Spirit shareholders vote in favor of the Transaction. The transaction is expected to close early in the third quarter of 2021.

Echelon Capital Markets, financial advisor to Inner Spirit, has provided a fairness opinion to the Board of Directors of Inner Spirit. ATB Capital Markets is acting as financial advisor to Sundial. Ranjeev Dhillon and Rami Chalabi of McCarthy Tétrault LLP is acting as legal counsel to Sundial. Robert Verbuck and Michael Ginevsky of Burstall LLP is acting as legal counsel to Inner Spirit. Sean Skiffington, Jason Lehner, and Merritt Johnson of Shearman & Sterling LLP acted as legal advisors for Sundial Growers in the transaction. Computershare Trust Company of Canada served as transfer agent for Inner Spirit Holdings Ltd. Odyssey Trust Company served as Depository to Inner Spirit Holdings Ltd.

Sundial Growers Inc. (NasdaqCM:SNDL) completed the acquisition of Inner Spirit Holdings Ltd. (CNSX:ISH) on July 20, 2021.