Nova Cannabis Inc. (the "Company" or "Nova") (TSX: NOVC) today announced changes to both its Board of Directors (the "Board") and management team along with the restructuring of its Ontario retail operations in connection with the completion of the acquisition (the "Acquisition") of all of the issued and outstanding common shares of Alcanna Inc. ("Alcanna") by Sundial Growers Inc. ("Sundial"). Pursuant to the Acquisition, Sundial indirectly acquired an approximately 63% ownership interest in Nova, as Alcanna is the registered holder of 35,750,000 Nova common shares.

James Burns (Board Chair), Thomas Bitove, Ross Sinclair, Marvin Singer and Darren Karasiuk have all resigned from the Board while Ron Hozjan will continue to serve as a director of the Company and has been appointed the new Chair of the Audit Committee.

The Company also announced the resignation of Darren Karasiuk as President and Chief Executive Officer and that current Chief Operating Officer, Marcie Kiziak, has been named Chief Executive Officer of Nova and President, Cannabis Retail of Sundial, effective immediately.  

Composition of the Board

As a result of the foregoing, Nova is pleased to announce the appointment of the following new Board members, each of whom brings unique skills and experiences to the Company. 

• Zach George, Chair
  • Chief Executive Officer, Sundial
• Anne Fitzgerald, Lead Independent Director
  • Former Chief Legal Officer and Corporate Secretary, Cineplex Inc.
• Marcie Kiziak
  • Chief Executive Officer, Nova
  • President, Cannabis Retail, Sundial
• Christopher Pelyk
  • Vice President, Store Development Global, Arcteryx
• Jeffrey Dean
  • Managing Partner, Maven Capital
• Shari Mogk-Edwards
  • Founder, Shari's Picks Consulting
  • Former Vice President, Product, Sales and Merchandising, Liquor Control Board of Ontario

Following the foregoing appointments and reorganization of the Board, a total of five (5) out of the seven (7) directors are considered to be "independent" for the purposes of applicable securities legislation.

New Senior Management Team

Prior to being named Nova's CEO, Ms. Kiziak served as Chief Operating Officer of Nova since completion of the reverse take-over of YSS Inc. in March 2021 and was President of Alcanna's cannabis division while Nova was a wholly-owned Alcanna subsidiary.

"On behalf of the Nova shareholders, the Board would like to thank Darren for his dedication and his commitment to establishing Nova as a force in the cannabis retail industry," said Zach George, Chief Executive of Sundial and newly appointed Chairman of Nova.

"Marcie was our first choice to assume the CEO position to fill the void resulting from Darren's departure. Marcie was already an integral part of the Nova team before this appointment and continues to be highly focused on maximizing labour efficiency within our store footprint and optimizing the Value Buds customer experience. We believe she is the right leader for the Company and its employees going forward."

Furthermore, Cameron Sebastian has been named Nova's Chief Financial Officer, while David Gordey, the Company's current CFO, will be continuing in a senior management role with Sundial. Prior to joining Sundial in 2019 as Vice President, Finance, Mr. Sebastian held senior executive positions in public energy companies for over 25 years. He holds a Chartered Professional Accountants of Canada designation and is a graduate of the University of Calgary.

Sale of Ontario Retail Operations

In order to comply with the regulatory restrictions that prohibit Sundial, as a licensed producer of cannabis, from directly or indirectly owning or controlling more than a 25% interest in any licensed Ontario cannabis retailer (other than a single "farmgate" store), including Nova, the Company has entered into an agreement whereby it has sold its Ontario cannabis retail stores by way of an asset purchase transaction and the establishment of a brand-licensing and services arrangement and re-purchase option with regards to those same stores.

Pursuant to the agreement, the Company has sold 21 Ontario retail stores (either already opened or planned to be opened in the coming months) to Spirit Leaf Ontario Inc. (the "Purchaser"), an experienced arm's length operator of cannabis retail stores in the province, for a purchase price of $11 million and has concurrently entered into a brand-licensing and services arrangement pursuant to which the Purchaser will continue to operate the Ontario retail stores under Nova's existing "Value Buds" banner and the Company will continue to provide the services of its management and retail operating personnel in compliance with applicable law. 

Nova will continue to provide funding for capital investment and operations of these stores and will be entitled to the economic upside of these stores, less a fee payable to the Purchaser.  The Purchaser has also granted the Company an option (the "Buyback Option") to repurchase the Ontario retail stores for a purchase price (subject to adjustments) equal to $11 million (plus the value of all cash and retained earnings), which Buyback Option will be exercisable once the regulatory prohibition is no longer an issue and ownership is permitted under applicable law. The Purchaser and the Company both intend for the Purchaser to continue operating the Ontario retail stores in a manner consistent with the "Value Buds" standard for high value and quality customer service.  

Nova Going Forward – Multiple Banners & Leveraging the Sundial Platform

"Sundial, under the purview of the Nova Board of Directors, intends to provide both capital support and management services to Nova, subject to compliance with applicable laws, with the goal of building a dominant, publicly listed Canadian cannabis retail platform," added Mr. George.

"Nova represents a unique opportunity to consolidate Sundial's existing retail exposure and potentially acquire additional third-party banners with the support of Sundial's currency.  To support Nova's ability to participate and grow in the Ontario retail market, Sundial intends to decrease its ownership interest in Nova over time as the business model evolves.  Sundial's Board of Directors intends to evaluate all options regarding its ownership in Nova, including the potential to dividend a portion of its Nova shares to Sundial shareholders while maintaining regulatory compliance."

"Nova plans to own and operate multiple banners and lead the industry in the rationalization of the retail footprint already underway across Canada over the next few years," added Ms. Kiziak. 

"We remain more committed than ever to delivering high-quality cannabis products to Canadian consumers."