Sundial Growers Inc. on Monday said that an issue with a customer was an “isolated, immaterial matter” and that it didn’t affect Sundial’s second-quarter earnings, which were released last week.
Sundial SNDL, -0.85% didn’t name the customer or provide other details, citing confidentiality requirements. It referred to the company as “another licensed producer.”
MarketWatch reported Friday that Zenabis Global Inc. ZENA, +7.69% had returned a half-ton of pot to Sundial because, according to people familiar with the matter, the pot contained mold and bits of rubber.
Sundial’s statement, in a filing to the Securities and Exchange Commission, said the impact of the matter on the company’s third-quarter results would be “negligible.” In an SEC filing Monday morning, Sundial said it is working out the matter with the unnamed customer.
“Sundial follows strict Good Production Practices (GPP) in accordance with all Health Canada standards,” the statement said. “Our company also uses standard provisions for potential returns which is consistent with industry practice.”
Original article: Wall Street’s latest billion-dollar pot company had a half-ton of bad weed returned as it was going public
MarketWatch first contacted Sundial for comment on the returned order last Wednesday. The company didn’t respond to multiple attempts to contact it. It responded to a query from MarketWatch on Monday with a statement that reflected the information released in its SEC filing.
Sundial’s statement to the SEC also referenced an “online article” that included “factual inaccuracies” about a commercial relationship with another licensed producer. A spokesman emailed MarketWatch a shortened version of the same statement later Monday that did not mention factual inaccuracies. When asked for specific examples of inaccurate information, the spokesman did not respond.
The Calgary, Alberta-based company went public Aug. 1, raising $143 million at a valuation of about $1 billion by selling stock for $13 a share. The stock has not closed higher than its IPO price since the offering. Sundial shares fell roughly 5% Friday after the MarketWatch report was published, and closed down 0.4%, to $10.50, on Monday.
The 554 kilograms of pot that Zenabis returned is worth roughly C$2.5 million ($1.9 million), assuming a price of C$5 per gram. Sundial sold roughly five metric tons of pot in the second quarter. Sundial Growers reported second-quarter net losses of C$12.4 million, or 16 cents a share, on net revenue of C$19.3 million.