Sundial Reports Third Quarter 2021 Financial and Operational Results CALGARY, AB

Sundial Reports Third Quarter 2021 Financial

and Operational Results

CALGARY, AB, Nov. 11, 2021 /CNW/ - Sundial Growers

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

ended September 30, 2021. All financial information in this press release is reported in millions of Canadian dollars and represents results

from continuing operations, unless otherwise indicated.

The Company will hold a conference call and webcast

at 10:30 a.m. EST (8:30 a.m. MST) on Friday, November 12, 2021. Please see the dial-in details within the release, as well as additional

details on Sundial's website at www.sndlgroup.com.

THIRD QUARTER 2021 OPERATIONAL AND INVESTMENT HIGHLIGHTS

"Our third quarter results reflect the initial

impact of the business transformation led by Sundial's team over the last 10 months," said Zach George, Chief Executive Officer of

Sundial. "We remain focused on sustainable profitability and continued improvement in all aspects of our operations. Despite the

ongoing challenges facing industry participants, our financial condition has never been stronger. Sundial is uniquely positioned relative

to its peers as we seek to delight consumers and become a trusted industry partner. Our balance sheet strength enables our team to avoid

short term pressures while working to improve the quality of our decision making. We expect that the achievement of our objectives will

result in an aggregate base business that generates free cash flow in 2022."

THIRD QUARTER 2021 KEY FINANCIAL METRICS

Sundial reports three operating segments including

two Cannabis segments: Cultivation and production, and retail, which was added with the acquisition of Inner Spirit. The third segment

is Investments. For the three and nine months ended September 30, 2020, Cannabis was the only reportable segment, and therefore no comparative

segment information is available for the Investment or retail segments.

On October 7, 2021, the Company announced that it

had entered into an arrangement agreement with Alcanna pursuant to which the Company will acquire all of the issued and outstanding common

shares of Alcanna by way of a statutory plan of arrangement for total consideration of 387.3 million common shares of Sundial, with a

value of approximately $346 million (the "Alcanna Acquisition"). The Alcanna Acquisition is expected to close in the fourth

quarter of 2021, subject to customary closing conditions. Alcanna's longstanding liquor business provides Sundial with stable cash generation

through a mature and proven business model with trailing twelve months free cash flow of $16.4 million on a built-out retail

Alcanna is a Canadian liquor retailer, operating predominantly

in Alberta under its three retail brands, "Wine and Beyond", "Liquor Depot" and "Ace Liquor". Alcanna also

holds an approximate 63% equity interest in Nova Cannabis Inc., a Canadian cannabis retailer operating stores across Alberta, Saskatchewan,

THIRD QUARTER 2021 RESULTS

The Company's Cannabis operations are comprised of

two segments: cannabis cultivation and production and, with the acquisition of Inner Spirit, cannabis retail.

CANNABIS CULTIVATION AND PRODUCTION

Sundial remains focused and committed to optimization

of its cultivation and processing activities.

GROSS MARGIN BEFORE FAIR VALUE ADJUSTMENTS

Gross margin before fair value adjustments from cannabis cultivation and production for the three months ended September 30,

2021 was negative $4.9 million compared to negative $17.3 million for the three months ended September 30, 2020. The increase of

$12.4 million was due to a lower inventory obsolescence provision compared to the prior period as well as Sundial's ongoing focus

on cost optimization, reduction of harvest inventory subject to impairment and offering the most competitive and profitable strains and

brands to its customers against the backdrop of industry-wide price compression and high relative operating costs at our premium facility.

NET REVENUE FROM CULTIVATION AND PRODUCTION

Net revenue from cultivation and production operations in the third quarter of 2021 was $8.2 million compared to $12.9 million in

the third quarter of 2020, reflecting the Company's continuing shift to branded sales from wholesales.

Average gross selling price was $3.23 per gram in the third quarter of 2021, compared to $2.67 per gram in the third quarter of 2020.

The increase of $0.56 per gram equivalent was mainly due to an increase in prices for sales to other LPs, partially offset by lower prices

for provincial board sales. Average gross selling price per gram equivalent of branded products, net of provisions, was $3.31 per

gram in the third quarter of 2021, compared to $3.19 per gram in the second quarter of 2021.

In the third quarter of 2021 gross revenue from Sundial's formats was:

As the cannabis industry continues to be faced by

challenges and price compression in all segments, Sundial's revenue by formats for the third quarter of 2021 has declined compared to

the third quarter of 2020. Due to a purposeful portfolio rationalization in Sundial's vape segment along

with continued price pressure, Sundial has seen a decrease in gross revenue in the third quarter of 2021.

Sundial completed its acquisition of Inner Spirit

on July 20, 2021. As a result, this is the first quarter that the Company's consolidated financial results include Inner Spirit.

Gross margin for the period July 20 to September 30, 2021, was $3.7 million.

Sundial's investment income is classified as income

REVENUE FROM INVESTMENTS

Revenue from Investments in the third quarter of 2021

was negative $4.8 million including unrealized losses on marketable securities, due to fluctuation in share prices from our portfolio

CONSOLIDATED FINANCIAL RESULTS

SALES, MARKETING AND GENERAL AND ADMINISTRATIVE

SMG&A costs increased by 30% from $8.3 million to $10.8 million in the third quarter of 2021 when compared to the third quarter

of 2020. The increase was mainly due to increased employee-related costs, and inclusion of Spiritleaf results subsequent to its acquisition.

Net earnings for the three months ended September 30, 2021 were $11.3 million compared to a net loss of $71.4 million in the previous

ADJUSTED EBITDA FROM CONTINUING OPERATIONS

Adjusted EBITDA from continuing operations was $10.5

million for the three months ended September 30, 2021 compared to a loss of $4.4 million for the three months ended September 30,

2020.2 The increase was due to the following:

STRATEGIC AND ORGANIZATIONAL UPDATE

Sundial remains focused on building long-term shareholder

value through the accretive deployment of cash resources and on achieving sustainable profitability through a streamlined and right-sized

operating structure, and on enhanced offering of high-quality brands.

The Company continues to monitor daily developments

in the COVID-19 pandemic and actions taken by government authorities. In accordance with the guidance of provincial and federal health

officials to limit the risk and transmission of COVID-19, Sundial continues to implement mandatory self-quarantine policies,

travel restrictions, enhanced cleaning and sanitation processes and frequency, safety shields at its retail outlets and social distancing

measures. Sundial believes that it has maintained and can maintain safe operations with these pandemic-related procedures and protocols

in place. The Company has not experienced a material impact on its production and processing activities to date related to COVID-19.

Certain financial measures in this news release, including

adjusted EBITDA from continuing operations, gross margin before fair value adjustments, and system-wide retail sales 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 measures of performance prepared in accordance with

ADJUSTED EBITDA FROM CONTINUING OPERATIONS

Adjusted EBITDA from continuing operations is a non-IFRS measure which the Company uses to evaluate its operating performance.

Adjusted EBITDA from continuing operations provides information to investors, analysts and others to aid in understanding

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

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

income tax recovery and excluding change in fair value of biological assets, change in fair value realized through inventory, unrealized

foreign exchange gains or losses, unrealized gains or losses on marketable securities, change 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.