Sundial Growers Inc. (NasdaqCM:SNDL entered into a non-binding letter of intent to acquire Alcanna Inc. (TSX:CLIQ) from Ace Liquor Corporation and others on September 1, 2021. Sundial Growers Inc. entered into an arrangement agreement to acquire Alcanna Inc. from Ace Liquor Corporation and others for approximately CAD 300 million on October 7, 2021. Under the terms of the agreement, Alcanna shareholders will receive, for each Alcanna common share held, 10.69 Sundial common shares in an all-stock transaction. Pursuant to the agreement, Sundial will acquire all of the issued and outstanding common shares of Alcanna for CAD 9.12 per share for fully diluted consideration of approximately CAD 346 million. Consideration represents a deemed value of approximately CAD 8.08 per Alcanna Share. As of January 5, 2022, Sundial and Alcanna have amended the arrangement agreement to reflect the revised consideration, which provides that Alcanna Shareholders will receive, for each Alcanna Share held, 8.85 common shares of Sundial and CAD 1.50 in cash consideration. The revised consideration represents a change from all share consideration to a cash and share consideration mix. Based on this exchange ratio, the amount of cash consideration and the closing price of Sundial Shares on January 5, 2022, the revised consideration represents a deemed value of approximately CAD 8.43 per Alcanna Share. Alcanna outstanding performance award units and Alcanna outstanding restricted award units will not be assumed by Sundial pursuant to the arrangement. If a holder of Alcanna outstanding deferred share units ceases to be a member of Alcanna Board (and does not remain an employee of Alcanna or an affiliate of Alcanna or a member of the board of directors of any affiliate of Alcanna) in connection with the arrangement, then Alcanna outstanding deferred share units held by such holder will be settled in cash and redeemed in strict accordance with the terms of the Alcanna outstanding deferred share units plan. In the event that, after the date hereof and prior to the closing, Sundial is required pursuant to the rules and policies of the NASDAQ to change, and does change, the number of Sundial shares issued and outstanding as a result of a reclassification, stock split (including a reverse stock split), stock dividend or stock distribution, recapitalization, subdivision, or other similar transaction, the consideration shall be equitably adjusted to eliminate the effects of such event on the consideration; provided that Sundial shall have provided to Alcanna advance notice of the applicable adjustment transaction and that no such adjustment transaction may be effected prior to January 31, 2022. The transaction will be carried out by way of a court-approved plan of arrangement under the Canada Business Corporations Act. Upon closing, existing Alcanna shareholders will own approximately 16% of the outstanding Sundial common shares. After the acquisition, Alcanna will become a wholly owned subsidiary of Sundial and the Alcanna Shares will be de-listed from the Toronto Stock Exchange. Alcanna's operations will continue on and grow under the Sundial parent. The agreement also provides for the payment of a termination fee of CAD 10 million payable by Alcanna to Sundial in the event the transaction is terminated in certain specified circumstances.

Alcanna has the right to nominate one director to the Sundial board of directors. The implementation of the transaction will be subject to the approval of at least two -thirds of the votes cast by Alcanna shareholders at a special meeting expected to be convened by Alcanna in December 2021, as well as requisite majority of the minority approval. The closing of the transaction is also subject to customary conditions for transactions of this nature, including the listing of the Sundial shares issuable pursuant to the transaction, the receipt of the applicable orders from the Court of Queen's Bench of Alberta and applicable regulatory approvals, including under the Competition Act (Canada), receipt of certain regulatory approvals required under applicable provincial liquor and cannabis legislation, the completion prior to the closing date of the arrangement by Sundial of all necessary actions to ensure that one director of the board of directors of Alcanna (being a person mutually agreed upon by the parties, each acting reasonably) is appointed to the board of directors of Sundial immediately after the completion of the arrangement and Alcanna Shareholders shall not have validly exercised their dissent rights in connection with the arrangement with respect to more than 10% of the outstanding Alcanna Shares. The transaction has received the unanimous approval of Alcanna's Board of Directors after receiving the unanimous recommendation of the special committee of independent directors. Alcanna's Board of Directors has unanimously resolved to recommend that Alcanna shareholders vote in favour of the transaction. The transaction has also been unanimously approved by the boards of directors of Sundial. All directors and executive officers of Alcanna who own common shares of the company, as well as certain other shareholders collectively holding approximately 12% of the Alcanna shares, have entered into voting support agreements with Sundial pursuant to which, among other things, the parties have agreed to vote their Alcanna shares in favour of the transaction. As per the article of December 29, 2021, Alcanna reminds Alcanna Shareholders to vote for arrangement. On November 9, 2021, the Court of Queen's Bench of Alberta granted an interim order in connection with the proposed Arrangement. A special meeting of the Alcanna Shareholders will be held on December 14, 2021. As of December 13, 2021, Alcanna Inc. announces postponement of the special meeting of shareholders to January 7, 2022. On January 7, 2022, Alcanna shareholders approved the transaction. On January 18, 2022, Court of Queen's Bench of Alberta has granted a final order approving the arrangement. As of March 29, 2022, all regulatory requirements under applicable provincial liquor and cannabis legislation have now been satisfied and completion of the Arrangement remains subject only to customary closing conditions as further described in the Arrangement Agreement. The closing of the transaction is expected to be in December 2021 or in the first quarter of 2022. As of November 16, 2021, the transaction is expected to close on December 31, 2021 or in the first quarter of 2022. As of January 6, 2022, the arrangement is expected to be completed in the first quarter of 2022, and in any event prior to the outside date of February 28, 2022. As of February 25, 2022, the outside date for closing the transaction is extended to March 30, 2022 to complete the required closing matters contemplated by the agreement. As of March 21, 2022, the parties expect that the Arrangement will close on or before April 30, 2022. The parties expect that the arrangement will close on or before March 30, 2022.

Paradigm Capital Inc. has provided a fairness opinion to Alcanna Board. Cormark Securities Inc. acted as financial advisor and Craig Hoskins, Ethan Minsky, Jun Ho Song, and Mani Saggu of Clark Wilson LLP acted as legal advisors to the special committee of Alcanna. Jon Truswell of Bennett Jones LLP acted as legal counsel to Alcanna. ATB Capital Markets Inc. acted as financial advisor to Sundial. Ranjeev Dhillon, Jessica Brown, Brett Anderson, Matthew Kraemer, Vincent Yip, Debbie Salzberger, Shana Wolch, Patrick Pengelly, Selina Lee-Andersen, Mark Christensen and Deron Waldock of McCarthy Tétrault LLP acted as legal advisors to Sundial. Institutional Shareholder Services Inc. acted as an information agent to Alcanna. Odyssey Trust Company acted as the depositary to Alcanna.

Sundial Growers Inc. (NasdaqCM:SNDL completed the acquisition of Alcanna Inc. (TSX:CLIQ) from Ace Liquor Corporation and others on March 31, 2022. All cash paid by Sundial in connection with the Alcanna Transaction was paid out of Sundial's cash on hand.