SNDL Reports Third Quarter 2022 Financial and Operational Results with Record Net Revenue and Cash Flow from Operations CALGARY, AB

SNDL Reports Third Quarter 2022 Financial and

Operational Results with Record Net Revenue and Cash Flow from Operations

CALGARY, AB, Nov. 14, 2022 /CNW/ - SNDL

Inc. (NASDAQ: SNDL) ("SNDL" or the "Company") reported its financial and operational results for the third quarter

ended September 30, 2022. All financial information in this press release is reported in millions of Canadian dollars unless otherwise

indicated. The results for the third quarter of 2021 do not include the subsequent acquisition of Alcanna Inc. ("Alcanna"),

which closed on March 31, 2022.

SNDL has also posted a supplemental investor presentation

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

THIRD QUARTER 2022 FINANCIAL AND OPERATIONAL HIGHLIGHTS

Record net revenue for the third quarter of 2022 of $230.5 million,

compared to $223.7 million in the second quarter of 2022 and $14.4 million in the third quarter of 2021, representing a 3% increase sequentially

and 1,501% increase year-over-year.

Liquor Retail: Net revenue of $152.5 million for the third

Cannabis Retail: Net revenue of $66.2 million for the third

Cannabis Operations: Net revenue of $11.8 million for the

third quarter of 2022.

Net loss of $98.8 million for the third quarter of 2022, substantially

due to non-cash charges for impairments of $86.5 million and changes in estimate of fair value of derivative warrants of $8.5 million,

compared to a $73.3 million net loss in the second quarter of 2022 and net income of $16.7 million in the third quarter of 2021.

Adjusted EBITDA of $18.3 million for the third quarter of 2022,

up 169% from the second quarter of 2022 and up 74% from the third quarter of 2021.

Record net cash provided by operating activities of $8.6 million

in the third quarter of 2022, compared to a loss of $17.9 million in the second quarter of 2022 and a loss of $56.2 million in the third

Gross margin grew to $50.3 million in the third quarter of 2022,

a record since SNDL's inception, up 17% from the second quarter of 2022 and up 2,723% from the third quarter of 2021.

$988 million of cash, marketable securities, and long-term

investments and no outstanding debt at September 30, 2022; and $278 million of unrestricted cash at November 11, 2022. SNDL has not raised

cash through share offerings since June 2021.

Entered into an arrangement agreement to acquire The Valens Company

Inc. ("Valens"), creating a leading vertically integrated entity with pro forma revenue among the highest of all Canadian Licensed

Producers, with the acquisition expected to close in the first quarter of 2023, subject to shareholder approval and customary closing

Entered into a purchase agreement to acquire substantially all

of the business of Superette Inc. ("Superette"), a cannabis retail operator with six locations in Ontario that can further leverage

SNDL's position as a multi-banner cannabis retail operator by enhancing the Company's market share and its exposure to a broader consumer

base, subject to regulatory approval.

Subsequent to the quarter end, acquired all of the core Zenabis

assets adding low-cost indoor cultivation with international export capabilities.

"As a result of our team's focus on operational

execution and sustainable profitability, we delivered record revenue and cash flow from operations in the third quarter," said Zach

George, Chief Executive Officer of SNDL. "Our regulated products platform has shown resiliency in the face of stiff industry

and macroeconomic headwinds, and our vertically integrated cannabis business is in the early stages of providing the scale and results

that we believe are required for SNDL to be a strong member of a future oligopoly in Canada. Our integration work and cost control initiatives

will continue into 2023 as we remain focused on opportunities related to the Alcanna assets and look to close the proposed acquisition

of Valens in the first quarter of 2023. With Valens, SNDL aims to be a leader in Canadian cannabis manufacturing with broad cannabis product

capabilities, strong optionality related to low-cost procurement, and best-in-class innovation potential. I am privileged to serve passionate

professionals, including more than 2,500 employees that have tirelessly worked to transform our business and delight consumers on a daily

basis. Our transformation is far from complete, but with an improving portfolio, cost discipline and continued organic and acquisitive

growth, we believe that we are well-positioned to reach our objectives, including the generation of sustainable free cash flow and long-term

THIRD QUARTER 2022 KEY FINANCIAL METRICS

THIRD QUARTER 2022 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 169 locations, predominantly in Alberta, under its three retail banners: "Wine and Beyond", "Liquor

Depot" and "Ace Liquor".

Gross revenue for Liquor Retail sales for the three banners combined

was $152.5 million for the third quarter of 2022, an increase of 1% compared to the third quarter of 2021 despite Alberta's off-premise

liquor retail volume being down this past quarter compared to same period last year.

Gross margin in the Liquor Retail segment was $35.6 million, or

23% of sales in the third quarter of 2022 compared to $33.6 million, or 23% of sales, in the third quarter of 2021. The Liquor Retail

business maintained its margin year over year through an effective pricing and product mix strategy.

Private label sales were $10.7 million, an increase of approximately

$1.0 million compared to the third quarter of 2021.

Customer count is up by 1% and the average basket size is up 3%

year-to-date. The Company sees larger basket sizes at Wine and Beyond locations, where consumers come for an experiential, destination

shopping approach to liquor retail.

SNDL's liquor banners' market share in Alberta was approximately

17% in the third quarter of 2022, with Wine & Beyond representing approximately 3% with only 11 stores in the province, showcasing

the continued and increasing popularity of the banner.

As of November 11, 2022, the Ace Liquor store count is 137, the

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

SNDL is Canada's largest private sector cannabis

retailer, operating 183 locations under its two retail banners: "Spiritleaf" and "Value Buds". Through the scale of

data and insights generated by a large volume of monthly transactions, SNDL's Cannabis Retail strategy is predicated on its quality store

locations, wide range of products, and differentiated retail experiences.

Gross revenue from the Cannabis Retail segment for the third quarter

of 2022 was $66.2 million, compared to $6.1 million in the third quarter of 2021, a 985% increase. The Nova Cannabis Inc. ("Nova")

acquisition and Value Buds sales were the material driver of the increase with $58.9 million of revenue during the third quarter of 2022.

Gross margin of $14.5 million, or 22% of sales, compared to $3.7

million in the third quarter of 2021, is primarily due to Value Buds' new locations and aggressive pricing strategy.

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

market share represents 9.9% in the privatized provincial markets, solidifying SNDL's position as a leading national multi-banner cannabis

retail operator in an increasingly competitive market.

The Company partnered with Nova for Value Buds' private label

products, expected to launch in November 2022. The private label strategy focuses on keystone segments, specifically large format, uniquely

curated for the Value Buds consumer, and drives meaningful differentiation through the retail network.

SNDL's CCAA stalking-horse bid for Superette stores was approved

by an initial Court order, and the Company expects the transaction to close before the end of the year, subject to a final Court order.

As of November 11, 2022, the Spiritleaf store count is 98 (23

corporate stores and 75 franchise stores), and the Value Buds store count is 85 corporate stores.

SNDL is Canada's largest indoor purpose-built cannabis

cultivation and processing facility with a diverse brand portfolio from value to premium, with an emphasis on premium inhalable formats.

The Cannabis Operations segment is a key enabler of SNDL's vertical integration strategy.

Gross revenue from the Cannabis Operations segment for the third

quarter of 2022 was $16.5 million, compared to $15.4 million, a 7% increase, in the second quarter of 2022 and compared to $11.0 million

in the third quarter of 2021, a 49% year-over-year increase.

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

a loss of $5.7 million, which included an asset impairment of $2.1 million, compared to a loss of $7.6 million in the second quarter of