SNDL Reports First Quarter 2023 Financial and Operational Results Synergy targets related to the Valens acquisition increased to more than $30 million through 2024 CALGARY, AB

SNDL Reports First Quarter 2023 Financial and

Synergy targets related to

the Valens acquisition increased to more than $30 million through 2024

CALGARY, AB, May 15, 2023 /CNW/ - SNDL Inc. (NASDAQ:

SNDL) ("SNDL" or the "Company") reported its financial and operational results for the first quarter

ended March 31, 2023. All financial information in this press release is reported in millions of Canadian dollars unless otherwise indicated.

The results for the first quarter of 2023 include the operating results of The Valens Company Inc. ("Valens") subsequent

to the acquisition on January 17, 2023, and the results for the first quarter of 2022 include one day of Alcanna Inc. ("Alcanna")

operations subsequent to the acquisition closing on March 31, 2022.

SNDL has also posted a supplemental investor presentation

on its website, which can be found at https://sndl.com.

FIRST QUARTER 2023 FINANCIAL AND OPERATIONAL HIGHLIGHTS

"We are pleased to report progress towards key

milestones in all of our operative segments against the backdrop of expected seasonally moderate sales in our retail networks," said

Zach George, Chief Executive Officer of SNDL. "The integration of Valens is proceeding with pace, and we are actively identifying

new revenue streams and cost reduction opportunities. The first quarter was impacted by a number of one-time items including $13.5 million

to replenish liquor inventory following the seasonal holiday draw in the fourth quarter of 2022, $2.7 million in severance and restructuring

costs, and $17.5 million to stabilize Valens and bring overdue accounts payable up to date. We expect additional restructuring charges

to impact the second quarter and the results of our team's hard work to become clear in late 2023. We are focused on improving all aspects

of our business with the objective of generating strong free cash flow. The relocation of all cannabis processing activities to our Kelowna

complex will drive improved capacity utilization, and we are aggressively reducing our exposure to higher-cost cultivation as we seek

low-cost producer status in all relevant product categories. In our retail segments, we are carving a path to higher margins and are excited

about the recent launch of our data service programs and the potential for improved consumer engagement through new e-commerce and loyalty

capabilities. We look forward to updating investors on our intended dividend of Nova shares, and events related to our SunStream portfolio

in the coming weeks. 2023 is shaping up to be another transformational year for our company."

FIRST QUARTER 2023 KEY FINANCIAL METRICS

FIRST QUARTER 2023 RESULTS

SNDL's business is operated and reported in four segments:

Liquor Retail, Cannabis Retail, Cannabis Operations and Investments.

SNDL is Canada's largest private sector liquor

retailer, operating 170 locations, predominantly in Alberta, under its three retail banners: "Wine and Beyond", "Liquor

Depot" and "Ace Liquor".

With its ownership interest in Nova, SNDL is Canada's largest

private sector cannabis retailer, operating 197 locations under its four retail banners: Value Buds, Spiritleaf, Superette and Firesale

Cannabis. SNDL's Cannabis Retail strategy is based on several factors, including the quality of its store locations, the range of products

it offers, and the unique experiences it provides customers. Using data and insights from a large volume of monthly transactions enables

SNDL to leverage technology and analytics to inform and improve its retail strategy.

SNDL has a diverse brand portfolio from value to premium,

emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities, premium cultivation facilities

and the newly acquired Kelowna and Bolton manufacturing facilities, the Cannabis Operations segment is a key enabler of SNDL's vertical

integration strategy.

Consolidated Financial Results

STRATEGIC AND ORGANIZATIONAL UPDATE

SNDL remains focused on building long-term shareholder

value through vertical integration, accretive deployment of cash resources, expansion of its retail distribution network, further streamlining

of the Company's operating structure and enhanced offerings of high-quality brands within both the Cannabis Operations and Cannabis Retail

Integration Initiatives

The Company is pleased to report that the integration

initiatives and cost synergies are progressing well, with more than $13 million in annual cost savings made in just five months since

the Valens acquisition. SNDL has also identified over $5 million in additional annual cost savings that are expected to be realized

in 2023. These initiatives place the Company on track to surpass its original $10 million cost savings target. Most of the cost savings

have been realized through SG&A and public company costs, while the remainder will be achieved through supply chain consolidation

and COGS. By 2024, run-rate synergies are expected to exceed $30 million annually, and proceeds from assets sales are expected to total

The management team expects these cost savings will

positively impact operating expenses and drive margin expansion in the third and fourth quarters of 2023. SNDL remains committed to its

integration initiatives and will continue to update shareholders on its progress.

SPECIFIED FINANCIAL MEASURES

Certain specified financial measures in this news

release are non-IFRS measures. These terms are not defined by IFRS and, therefore, may not be comparable to similar measures provided

by other companies. These non-IFRS financial measures should not be considered in isolation or as an alternative for or superior to measures

of performance prepared in accordance with IFRS. These measures are presented and described to provide shareholders and potential

investors with additional measures in understanding the Company's operating results in the same manner as the management team.

Adjusted EBITDA is a non-IFRS measure which the Company

uses to evaluate its operating performance. Adjusted EBITDA provides information to investors, analysts, and others to

aid in understanding and evaluating the Company's operating results in a manner similar to its management team. Adjusted EBITDA

is defined as net income (loss) from continuing operations before finance costs, depreciation and amortization, accretion expense, income

tax recovery and excluding changes in fair value of biological assets, changes in fair value realized through inventory, unrealized foreign

exchange gains or losses, unrealized gains or losses on marketable securities, realized gains or losses on investments resulting from

business combinations, changes in fair value of derivative warrants, share-based compensation expense, asset impairment, gain or loss

on disposal of property, plant and equipment and certain one-time non-operating expenses, as determined by management. The

Company presents both consolidated, total Adjusted EBITDA and Adjusted EBITDA by operating segment.

This press release is intended to be read in conjunction

with the Company's Financial Statements and Notes for the period ended March 31, 2023, and the accompanying Management's Discussion and

Analysis ("MD&A"). These reports are available under the Company's profile on SEDAR at www.sedar.com and EDGAR at

www.sec.gov/edgar.shtml.

The Company will hold a conference call and webcast

at 1 p.m. EST (11 a.m. MST) on Monday, May 15, 2023.

To access the live webcast of the call, please visit

A telephone replay will be available for one month.

To access the replay, dial:

Canada/USA Toll Free: 1-800-319-6413 or International Toll: +1-604-638-9010

When prompted, enter Replay Access Code: 0166#

The webcast archive will be available for three months via the link provided above.

SNDL is a public company whose shares are traded on

the Nasdaq under the symbol "SNDL."

SNDL is the largest private-sector liquor and cannabis

retailer in Canada with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, Spiritleaf, and Firesale Cannabis.

SNDL is a licensed cannabis producer and one of the largest vertically integrated cannabis companies in Canada specializing in low-cost

biomass sourcing, premium indoor cultivation, product innovation, low-cost manufacturing facilities, and a cannabis brand portfolio

that includes Top Leaf, Contraband, Citizen Stash, Sundial Cannabis, Palmetto, Bon Jak, Spiritleaf Selects, Versus Cannabis, Value Buds,

Vacay, Grasslands and Superette. SNDL's investment portfolio seeks to deploy strategic capital through direct and indirect investments

and partnerships throughout the global cannabis industry. For more information on SNDL, please go to www.sndl.com.

Forward-Looking Information Cautionary Statement

This news release includes statements containing certain

"forward-looking information" within the meaning of applicable securities law ("forward-looking statements"),