Today, investors in Sundial Growers (NASDAQ:SNDL) are seeing a nice pop. Shares of SNDL stock are currently up approximately 7% at the time of writing on some heavier-than-usual volume. This move also comes on a relatively flat day for cannabis stocks today.
Accordingly, investors may be intrigued to know what’s behind this move in SNDL stock. Sundial is a former meme stock that surged alongside its peers earlier this year. However, since hitting a high of nearly $4 per share, SNDL stock has lost more than 80% of its value. (And that’s including today’s rise.)
Much of this negative momentum can be attributed to flagging interest among cannabis stocks of late. Investors bullish on cannabis legalization have calmed their expectations. Accordingly, sentiment has cooled down significantly as of late.
That said, there appear to be clear catalysts driving Sundial higher today. Let’s dive into what investors are looking at with this stock.
SNDL Stock Higher on Key Catalysts
Key announcements at the state level in California and New York have provided a positive backdrop for investors of late. Yesterday, we reported on two key changes made by these states to encourage cannabis consumption. California will fully legalize hemp and edibles containing CBD, while New York has announced it will not require drug tests for most employers. Indeed, these are catalysts worth watching.
However, at the company level, Sundial has some company-specific news driving this stock higher today as well.
First and foremost, investors appear to be mulling rumors that Sundial could be an acquisition target of rival Tilray (NASDAQ:TLRY). While these rumors appear to be unsubstantiated, it’s clear that Sundial’s value at these levels is getting recognized.
Today, Sundial announced its joint venture, SunStream Bancorp, would provide a $100 million acquisition facility to Jushi Holdings (OTCMKTS:JUSHF). This facility would provide growth capital to Jushi and a 9.5% interest rate to Sundial. For investors, this deal is attractive as it allows Sundial shareholders to benefit from the various equity raises, providing a solid cash-flow stream to this cannabis producer.
Additionally, Sundial announced yesterday that the company had disposed of roughly 10% of its stake in Indiva. As a result, Sundial realized proceeds of more than $1.1 million. This move bolsters the company’s balance sheet, and investors seem to like this move.
All in all, these moves seem to indicate Sundial is once again an attractive option for growth investors. Accordingly, investors are bidding up shares of this cannabis company today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
