SNDL Reports Second Quarter 2022 Financial and Operational Results CALGARY, AB

SNDL Reports Second Quarter 2022 Financial and

CALGARY, AB, Aug. 12, 2022 /CNW/ - SNDL Inc. (NASDAQ:

SNDL) ("SNDL" or the "Company") reported its financial and operational results for the second quarter ended June 30,

2022. All financial information in this press release is reported in millions of Canadian dollars unless otherwise indicated. All results

for the second quarter of 2021 exclude the subsequent acquisitions of Inner Spirit Holdings ("Spiritleaf") and Alcanna Inc.

("Alcanna"), which closed on July 20, 2021, and March 31, 2022, respectively.

The Company will hold a conference call and webcast

at 8:30 a.m. EDT (6:30 a.m. MDT) on Monday, August 15, 2022. Please see the dial-in details within the release and additional information

about SNDL's website at www.sndl.com.

This press release is intended to be read in conjunction

with the Company's Financial Statements and Notes for the period 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.

SNDL has also posted a supplemental investor presentation

Following its Annual and Special Meeting of Shareholders

on July 25, 2022, Sundial Growers Inc. changed its legal name to SNDL Inc. In light of the evolution of SNDL's business over the past

two years, management feels that this change more appropriately reflects the operating model and strategy of the Company.

Commenting on the rebrand, Zach George, SNDL's Chief

Executive Officer, said: "The rapid and material changes to our business over the last two years have led to our original "Sundial

Growers" identity becoming less relevant. We believe that the new SNDL brand better reflects our corporate activities and the undeniable

impact that retail investor support has had on our survival and ability to build Canada's largest private sector distribution platform

for liquor and cannabis. We continue to focus on delighting consumers with curated experiences and a robust selection of quality product

offerings. SNDL embodies our path to the creation of a platform committed to excellence in the regulated products space."

SNDL has launched a new website that can be visited

at www.sndl.com, along with a rebrand video at https://sndl.com/Overview/Videos/.

SECOND QUARTER 2022 FINANCIAL AND OPERATIONAL

"The SNDL team's dedication and perseverance

have enabled us to make significant progress on our journey to becoming Canada's largest private sector distributor of both liquor and

cannabis," said Zach George, Chief Executive Officer of SNDL. "We believe our unique asset base and balance sheet strength represent

competitive advantages that we are determined to leverage for the benefit of our stakeholders. We are seeing market share gains through

our retail network and this quarter our cannabis operations generated positive adjusted EBITDA for the first time in the Company's history.

We continue to strengthen and transform our business while benefitting from vertical integration across our business segments under a

shared services model with integration work expected to impact results over the next two quarters. Despite our encouraging results, we

know there is still room for improvement, and we remain humbled by the opportunity before us. SNDL represents an opportunity for investors

to gain exposure to North American regulated products in a manner that does not exist with any other public company today. We will continue

to prioritize free cash flow generation with a focus on strengthening our distribution platform and using our credit portfolios to turn

industry headwinds into long-term opportunities."

SECOND QUARTER 2022 KEY FINANCIAL METRICS

SECOND QUARTER 2022 RESULTS

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

Liquor Retail, Cannabis Retail, Cannabis Production and Cultivation, and Investments.

As a result of the Alcanna acquisition, SNDL is now 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". The Liquor Retail segment's stable and growing cash flow profile

and best-in-class retail operations expertise have accelerated SNDL's retail growth and vertical integration strategy. The second quarter

of 2022 is SNDL's first full quarter of reporting liquor retail revenue following the completion of the acquisition.

Gross revenue for Liquor Retail sales for the three banners combined

was $148.6 million for the second quarter of 2022.

Gross margin in the Liquor Retail segment was $33.5 million, or

22.6% of sales. Despite fluctuations in sales due to market conditions and retail competition, the Company has stabilized its margin through

a pricing and mix strategy in the second quarter of 2022. While customer count is down by 5% year-to-date, largely due to a return to

on-premises consumption in a post COVID-19 environment, the average basket size is up 2%. The Company sees larger basket sizes at their

Wine & Beyond locations, where consumers come for the experiential, destination shopping approach to liquor retail.

SNDL's liquor banners' market share in Alberta was 17.6% in the

second quarter of 2022, with Wine & Beyond representing 2.9% with only 11 stores, showcasing the continued and increasing popularity

of the banner. SNDL is exploring opportunities to expand the Wine & Beyond store footprint in Alberta, British Columbia, and Saskatchewan.

Moving forward, the Company will seek to optimize profitability

and cash flow for the Liquor Retail segment by focusing on cost discipline, margin accretive products, monetizing intellectual property,

and leveraging its retail footprint to develop an e-commerce platform.

As of August 11, 2022, the Ace Liquor store count is 138, the

Liquor Depot store count is 20 and the Wine and Beyond store count is 12.

With the acquisition of our interest in Nova Cannabis

Inc. ("Nova") through the Alcanna acquisition, SNDL's expanded retail network has significantly increased the Company's

retail market share and its exposure to a broader consumer base. It also provides direct access to more comprehensive customer data, and

the Company expects revenue increases from the continued integration of its distribution channels. Cannabis retail operating results

include 100% of Nova's results as a majority owned subsidiary.

Gross revenue from the Cannabis Retail segment for the second

quarter of 2022 was $63.5 million, compared to $7.5 million in the first quarter of 2022, a 746% increase. Value Buds sales were the material

driver of the increase with $56.3 million of revenue during the second quarter of 2022.

Gross margin of $13.9 million, or 21.9% of sales, increased from

$3.3 million, compared to Q1 2022 primarily due to Value Buds' pricing strategy.

In the second quarter of 2022, Value Buds and Spiritleaf's combined

market share represents 9.8% in the privatized provincial markets, solidifying SNDL's position as a leading national multi-banner cannabis

The Company successfully launched its first private label program

with Spiritleaf Selects in Alberta, Saskatchewan, Manitoba, and Ontario in 3.5 gram dried flower and 3 x 0.5 gram pre-roll formats.

As of August 11, 2022, the Spiritleaf store count is 103 (20 corporate

stores and 83 franchised stores) and the Value Buds store count is 82.

Cannabis Cultivation and Production

SNDL remains committed to its cultivation and processing

activities, including continuous improvement of its product offerings while focusing on cost optimization and the most competitive and

profitable strains and brands.

Gross revenue from the Cannabis Cultivation and Production segment

for the second quarter of 2022 was $15.4 million, compared to $11.3 million in the first quarter of 2022, a 36% sequential improvement

and a 21% year-over-year improvement.

Net loss for the segment during the second quarter of 2022 was

$8.0 million, compared to a $75.4 million loss in the second quarter of 2021

Adjusted EBITDA was $3.4 million, in the second quarter of 2022,

compared to negative $11.0 million in the same period of 2021. This represents SNDL's first positive Adjusted EBITDA quarter in the Cannabis

Cultivation and Production segment. The significant improvement in Adjusted EBITDA can be attributed to higher sales volumes, improved

margin on an adjusted basis, reductions to SMG&A, and greater discipline over inventory management driving a reduction in price discounts

for provincial board sales during the first half of 2022.

Average price per gram sold for the second quarter of 2022 was

$3.18, compared to $1.69 for the second quarter of 2021. The increase of $1.49 per gram sold reflects an improved margin strategy as the

Company has shifted its mix and increased its price per gram in select provinces through a disciplined revenue management initiative.

Cost of sales per gram sold for the second quarter of 2022 was

$2.64, compared to $1.76 for the second quarter of 2021. The increase of $0.88 per gram sold reflects the Company's move away from business-to-business

bulk flower transactions that made up a larger portion of its sales mix in the second quarter of 2021.

Gross margin results for the second quarter of 2022 was negative

$4.3 million, compared to negative $2.8 million for the three months ended June 30, 2021. The gross margin results include a $3.9 million

inventory impairment and fair value changes in the accounting for inventory and biological assets.