EX-99.1

DSUs
outstanding

Balance at December 31, 2025

Balance at June 30, 2026


As at	Note	June 30, 2026			December 31, 2025

Assets
Current assets
Cash and cash equivalents			183,208			252,243
Restricted cash			20,080			20,081
Marketable securities			139			84
Accounts receivable			33,003			27,643
Biological assets	6		2,842			3,120
Inventory	7		133,372			126,877
Prepaid expenses and deposits			15,233			15,566
Investments	12		263			484
Assets held for sale			700			746
Net investment in subleases	10		2,962			2,775
			391,802			449,619
Non-current assets
Long-term deposits and receivables			2,457			4,526
Right of use assets	8		135,067			138,353
Property, plant and equipment	9		144,622			151,900
Net investment in subleases	10		10,697			11,643
Intangible assets	11		57,130			58,520
Investments	12		14,507			11,574
Equity-accounted investees	13		400,386			385,534
Goodwill			127,260			124,248
Total assets			1,283,928			1,335,917

Liabilities
Current liabilities
Accounts payable and accrued liabilities			46,193			56,747
Lease liabilities	14		36,093			35,462
			82,286			92,209
Non-current liabilities
Lease liabilities	14		130,284			134,471
Other liabilities			7,665			8,041
Total liabilities			220,235			234,721

Shareholders’ equity
Share capital	15(b)		2,171,833			2,310,398
Warrants			306			306
Contributed surplus			54,623			54,038
Accumulated deficit			(1,211,535	)		(1,302,441	)
Accumulated other comprehensive income ("AOCI")			48,466			38,895
Total shareholders’ equity			1,063,693			1,101,196
Total liabilities and shareholders’ equity			1,283,928			1,335,917

Commitments and contingencies (note 23)

Subsequent events (notes 15(b) and 24)

See accompanying notes to the condensed consolidated interim financial statements.


		Three months ended June 30						Six months ended June 30
	Note	2026			2025			2026			2025
Net revenue	17		235,766			244,769			431,672			449,683
Cost of sales	7		179,417			177,168			322,511			325,441
Gross profit			56,349			67,601			109,161			124,242

Investment income	18		1,008			1,529			2,545			4,385
Share of (loss) profit of equity-accounted investees	13		(2,351	)		304			(1,850	)		(4,153	)

General and administrative			42,841			45,376			89,448			91,735
Sales and marketing			3,665			3,384			7,674			7,151
Depreciation and amortization	8,9,11		12,631			12,920			25,486			26,148
Share-based compensation	16		2,650			2,919			3,266			4,307
Restructuring costs			859			827			1,031			1,153
Asset (reversal) impairment, net	8,9		(2	)		(1,064	)		(180	)		920
Other income			—			—			(81	)		—
Research and development			8			98			12			198
Loss (gain) on disposition of assets			195			(29	)		155			(88	)
Operating (loss) income			(7,841	)		5,003			(16,955	)		(7,050	)

Other expenses, net	19		(1,666	)		(2,118	)		(3,960	)		(4,772	)
(Loss) earnings before income tax			(9,507	)		2,885			(20,915	)		(11,822	)
Income tax recovery			1,685			—			3,182			—
Net (loss) earnings			(7,822	)		2,885			(17,733	)		(11,822	)

Equity-accounted investees - share of other comprehensive income (loss)	13		5,641			(20,611	)		10,654			(20,959	)
Investments at fair value through other comprehensive income ("FVOCI") - change in fair value	12		209			2,044			(1,083	)		(3,186	)
Comprehensive (loss) income			(1,972	)		(15,682	)		(8,162	)		(35,967	)

Net (loss) earnings per common share attributable to owners of the Company
Basic and diluted	21	$	(0.03	)	$	0.01		$	(0.07	)	$	(0.05	)

See accompanying notes to the condensed consolidated interim financial statements.


													Accumulated other comprehensive income
	Note	Share capital			Warrants		Contributed surplus			Accumulated deficit			Equity-accounted investees		Investments at FVOCI			Total
Balance at December 31, 2025			2,310,398			306		54,038			(1,302,441	)		31,673		7,222			1,101,196
Net loss			—			—		—			(17,733	)		—		—			(17,733	)
Other comprehensive income (loss)			—			—		—			—			10,654		(1,083	)		9,571
Share issuances			10			—		—			—			—		—			10
Share repurchases	15(b)		(141,874	)		—		—			108,639			—		—			(33,235	)
Share-based compensation	16		—			—		3,884			—			—		—			3,884
Employee awards exercised			3,299			—		(3,299	)		—			—		—			—
Balance at June 30, 2026			2,171,833			306		54,623			(1,211,535	)		42,327		6,139			1,063,693


Balance at December 31, 2024		2,346,728		667	57,156		(1,323,965	)	50,906		1,864		1,133,356
Net loss		—		—	—		(11,822	)	—		—		(11,822	)
Other comprehensive loss		—		—	—		—		(20,959	)	(3,186	)	(24,145	)
Share repurchases		(51,714	)	—	—		36,383		—		—		(15,331	)
Share-based compensation	16	—		—	6,080		—		—		—		6,080
Employee awards exercised		240		—	(240	)	—		—		—		—
Balance at June 30, 2025		2,295,254		667	62,996		(1,299,404	)	29,947		(1,322	)	1,088,138

See accompanying notes to the condensed consolidated interim financial statements.


		Three months ended June 30						Six months ended June 30
	Note	2026			2025			2026			2025
Cash provided by (used in):
Operating activities
Net (loss) earnings for the period			(7,822	)		2,885			(17,733	)		(11,822	)
Adjustments for:
Income tax recovery			(1,685	)		—			(3,182	)		—
Interest and fee income	18		(1,008	)		(1,318	)		(2,490	)		(4,174	)
Change in fair value of biological assets	6		55			(1,292	)		9			(2,739	)
Change in fair value of inventory sold			295			628			525			964
Share-based compensation	16		2,650			2,919			3,266			4,307
Depreciation and amortization	8,9,11		13,989			13,949			28,105			28,136
Loss (gain) on disposition of assets			195			(29	)		155			(88	)
Inventory impairment and obsolescence	7		1,156			239			2,602			830
Finance costs, net	19		1,994			1,647			4,056			3,337
Change in estimate of fair value of derivative warrants			—			(13	)		—			(25	)
Unrealized foreign exchange (gain) loss			(713	)		180			(1,012	)		193
Transaction costs			10			—			10			—
Asset (reversal) impairment, net	8,9		(2	)		(1,064	)		(180	)		920
Share of loss (profit) of equity-accounted investees	13		2,351			(304	)		1,850			4,153
Unrealized loss (gain) on marketable securities	18		151			(211	)		(55	)		(211	)
Additions to marketable securities			—			313			151			313
Income distributions from equity-accounted investees	13		—			68			—			68
Interest received			1,194			1,283			2,555			4,219
Exercise of cash-settled deferred share units	16(d)		—			—			(474	)		—
Change in non-cash working capital	3,20		(9,123	)		(13,763	)		(10,990	)		(14,476	)
Net cash provided by operating activities			3,687			6,117			7,168			13,905
Investing activities
Additions to property, plant and equipment	9		(1,786	)		(2,080	)		(4,424	)		(3,668	)
Additions to investments	12		(151	)		(7,417	)		(4,183	)		(16,414	)
Principal payments from investments	12		122			257			238			27,164
Capital distributions (contributions) from equity-accounted investees	13		—			3,073			(2,866	)		3,792
Proceeds from disposal of property, plant and equipment	9		1,751			53			1,794			166
Acquisitions	4		—			(1,000	)		(2,900	)		(1,000	)
Change in non-cash working capital	20		(274	)		(47	)		637			(29	)
Net cash (used in) provided by investing activities			(338	)		(7,161	)		(11,704	)		10,011
Financing activities
Payments on lease liabilities, net	10,14		(10,101	)		(11,785	)		(20,157	)		(19,297	)
Repurchase of common shares	15(b)		(23,496	)		—			(33,071	)		(15,031	)
Change in non-cash working capital	20		52			186			871			277
Net cash used in financing activities			(33,545	)		(11,599	)		(52,357	)		(34,051	)
Change in cash and cash equivalents			(30,196	)		(12,643	)		(56,893	)		(10,135	)
Adjustment on initial application of amendments to IFRS 9 on January 1, 2026			—			—			(12,142	)		—
Cash and cash equivalents, beginning of period			213,404			220,867			252,243			218,359
Cash and cash equivalents, end of period			183,208			208,224			183,208			208,224

See accompanying notes to the condensed consolidated interim financial statements.

Description of business

SNDL Inc. (“SNDL” or the “Company”) was incorporated under the Business Corporations Act (Alberta) on August 19, 2006.

The Company’s head office is located at 101, 17220 Stony Plain Road NW, Edmonton, Alberta, Canada, T5S 1K6.

The principal activities of the Company are the retailing of wines, beers and spirits, the operation and support of corporate-owned, controlled and franchised retail cannabis stores in certain Canadian jurisdictions where the private sale of adult-use cannabis is permitted, the manufacturing of cannabis products providing proprietary cannabis processing services, the production, distribution and sale of cannabis in Canada and for export pursuant to the Cannabis Act (Canada) (the “Cannabis Act”), and the deployment of capital to investment opportunities. The Cannabis Act regulates the production, distribution, and possession of cannabis for both medical and adult-use access in Canada.

SNDL and its subsidiaries operate solely in Canada. Through its joint venture, SunStream Bancorp Inc. (“SunStream”) (note 13), the Company provides growth capital that pursues indirect investment and financial services opportunities in the cannabis sector, as well as other investment opportunities. The Company also makes strategic portfolio investments in debt and equity securities.

The Company’s liquor retail operations are seasonal in nature. Accordingly, sales will vary by quarter based on consumer spending behaviour. The Company is able to adjust certain variable costs in response to seasonal revenue patterns; however, costs such as occupancy are fixed, causing the Company to report a higher level of earnings in the third and fourth quarters. This business seasonality results in quarterly performance that is not necessarily indicative of the year’s performance. The cannabis industry is a growing industry and the Company has not observed significant seasonality as of yet.

The Company’s common shares trade on the Nasdaq Capital Market under the ticker symbol “SNDL” and on the Canadian Securities Exchange under the symbol “SNDL”.

U.S. TARIFFS

In early 2025, the U.S. administration imposed certain tariffs on imports from certain countries, including Canada, and in response, the Canadian administration imposed their own tariffs on certain imports from the United States. Canada and the United States continue ongoing negotiations on a new trade and security relationship, though the scope and terms of such negotiations and the agreements they may produce, if any, are unknown. These tariff announcements and the risk of further potential retaliatory tariffs have created uncertainty, which has permeated the economic and investment outlook, impacting current economic conditions, including such issues as the inflation rate and the global supply chain. Aside from the impact on the global economy, these tariffs may continue to impact SNDL.

SNDL is continuing to monitor the evolving situation and the impacts and potential consequences on its financial position. The Company did not experience a significant impact to its financial performance during the six months ended June 30, 2026.

Basis of presentation

Statement of compliance

These condensed consolidated interim financial statements (“financial statements”) have been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting as issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretations Committee. These financial statements were prepared using the same accounting policies and methods as those disclosed in the

annual consolidated financial statements for the year ended December 31, 2025. These financial statements should be read in conjunction with the annual consolidated financial statements for the Company for the year ended December 31, 2025.

Certain prior period amounts have been reclassified to conform to current year presentation. Specifically, changes to investments have been separated into additions to investments and principal payments from investments and change in fair value of biological assets has been separated into change in fair value of biological assets and change in fair value of inventory sold, both on the condensed consolidated interim statement of cash flows.

These financial statements were approved and authorized for issue by the board of directors of the Company (the “Board”) on July 27, 2026.

NEW ACCOUNTING STANDARDS

Classification and Measurement of Financial Instruments — Amendments to IFRS 9 and IFRS 7

On January 1, 2026, the Company adopted the amendments to IFRS 9 and IFRS 7 using the prospective application. The amendments include the following:

•

Clarification on the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic payment system.

•

Clarification and further guidance for assessing whether a financial asset meets the solely payments of principal and interest criterion.

•

New disclosure requirements for certain instruments without contractual terms that can change cash flows.

•

Updates to the disclosure required for equity instruments designated at FVOCI.

Impact on adoption

At June 30, 2026, there was a $8.4 million net reduction in cash and cash equivalents with an equivalent increase in accounts receivable, which is reflected in the statement of financial position and statement of cash flows. The Company estimated the impact to be approximately $12.1 million net reduction in cash and cash equivalents with an equivalent increase in accounts receivable, had the amendments been in effect for the annual period ending December 31, 2025.

Business acquisitions

On April 9, 2025, the Company announced that it had entered into an arrangement agreement (the “1CM Agreement”) with 1CM Inc. (“1CM”) pursuant to which it would acquire 32 cannabis retail stores (the “1CM Transaction”) operating under the Cost Cannabis and T Cannabis banners in Ontario, Alberta and Saskatchewan (the “1CM Stores”).

Under the terms of the 1CM Agreement, the Company would acquire, with the option to assign, the 1CM Stores for total consideration of $32.2 million cash, subject to certain adjustments at the closing of the 1CM Transaction. The 1CM Stores are comprised of 2 stores in Alberta, 3 stores in Saskatchewan and 27 stores located in Ontario.

The 1CM Transaction was to be completed by way of an arrangement under the Business Corporations Act (Ontario). On June 16, 2025, 1CM announced the approval of the 1CM Transaction by 1CM shareholders. On June 18, 2025, 1CM announced that the Ontario Superior Court of Justice (Commercial List) approved the plan of arrangement involving SNDL.

On December 15, 2025, the Company announced that it had entered into an amended and restated arrangement agreement (the “1CM A&R Agreement”). Under the 1CM A&R Agreement, the parties agreed to, among other things, complete the 1CM Transaction in two stages to align with the status of required provincial regulatory approvals. The aggregate purchase price for the 1CM Transaction had not been amended.

On January 7, 2026, the first closing (“First Closing”) was completed and involved the purchase of 5 cannabis retail stores located in Alberta and Saskatchewan. The purchase price for the First Closing was $5.0 million cash, subject to certain adjustments at the time of the First Closing. Pursuant to the 1CM A&R Agreement, in December 2025, the Company had previously paid a $2.0 million non-refundable cash deposit towards the purchase price in respect of the First Closing.

The second closing (“Second Closing”) was expected to occur in the first half of 2026 for the purchase of the remaining 27 cannabis retail stores, each of which are located in Ontario. The 1CM Transaction had an outside date that was extended from December 31, 2025 to May 31, 2026. On May 27, 2026, the Company announced that the Second Closing was not expected to proceed following a prolonged regulatory review process that extended beyond commercially reasonable timelines contemplated by the parties. The Company is required to pay a $0.25 million termination fee that will be deducted from the previously paid $1.0 million deposit meant to be applied towards the purchase price in respect of the Second Closing, with the remainder of the deposit being returned to the Company.

The purchase price allocation is not final as the Company continues to obtain and verify information required to determine the fair value of certain assets and liabilities and the amount of deferred income taxes, if any, arising on their recognition.

Due to the inherent complexity associated with valuations and the timing of the acquisition, the amounts below are provisional and subject to adjustment. The fair value of consideration paid was as follows:


	Provisional		Adjustments		Provisional
Cash		5,000		—		5,000

The preliminary fair value of the assets and liabilities acquired was as follows:


	Provisional			Adjustments			Provisional
Inventory		385			22			407
Prepaid expenses and deposits		10			—			10
Right of use assets		554			1,150			1,704
Property, plant and equipment		1,172			—			1,172
Lease liabilities		(435	)		(870	)		(1,305	)
Total identifiable net assets acquired		1,686			302			1,988
Goodwill		3,314			(302	)		3,012
		5,000			—			5,000

Goodwill reflects benefits arising from the acquisition that are not individually identifiable or separately recognizable, including expected operational synergies and future growth opportunities.

As new information is obtained within one year of the date of acquisition, about facts and circumstances that existed at the date of acquisition, the accounting for the acquisition will be revised.

The consolidated financial statements incorporate the operations of the 5 cannabis retail stores located in Alberta and Saskatchewan commencing January 8, 2026. During the period January 8, 2026 to June 30, 2026 the Company recorded revenues of $2.1 million and a net loss of $0.4 million from the 5 cannabis retail stores. Had the First Closing closed on January 1, 2026, management estimates that for the period January 1, 2026, to January 7, 2026, revenue would have increased by $79 thousand and net loss would have increased by $17 thousand. In determining these amounts, management assumes the fair values on the date of acquisition would have been the same as if the acquisition had occurred on January 1, 2026.

The Company incurred costs related to the First Closing of $0.1 million which have been included in transaction costs.

Segment information

The Company’s reportable segments are organized by business line and are comprised of four reportable segments: liquor retail, cannabis retail, cannabis operations, and investments.

Liquor retail includes the sale of wines, beers and spirits through wholly owned liquor stores. Cannabis retail includes the private sale of adult-use cannabis products and accessories through corporate-owned, controlled and franchised retail cannabis stores. Cannabis operations include the cultivation, distribution and sale of cannabis for the adult-use and medical markets domestically and for export, and providing proprietary cannabis processing services, in addition to product development, manufacturing, and commercialization of cannabis consumer packaged goods. Investments include the deployment of capital to investment opportunities. Certain overhead expenses not directly attributable to any operating segment are reported as “Corporate”.


	Cannabis Retail		Cannabis Operations			Intersegment Eliminations			Cannabis Total			Liquor Retail			Investments			Corporate			Total
As at June 30, 2026
Total assets		212,139		211,318			—			423,457			325,896			415,156			119,419			1,283,928
Six months ended June 30, 2026
Net revenue (1)		160,549		61,664			(29,332	)		192,881			238,791			—			—			431,672
Gross profit		42,354		6,369			—			48,723			60,438			—			—			109,161
Operating income (loss)		4,084		(16,143	)		—			(12,059	)		(136	)		479			(5,239	)		(16,955	)
Earnings (loss) before income tax		2,930		(16,284	)		—			(13,354	)		(2,914	)		479			(5,126	)		(20,915	)
Three months ended June 30, 2026
Net revenue (1)		83,204		32,232			(14,378	)		101,058			134,708			—			—			235,766
Gross profit		22,002		567			—			22,569			33,780			—			—			56,349
Operating income (loss)		2,968		(9,201	)		—			(6,233	)		3,024			(1,559	)		(3,073	)		(7,841	)
Earnings (loss) before income tax		2,376		(9,175	)		—			(6,799	)		1,658			(1,559	)		(2,807	)		(9,507	)

(1)

The Company has eliminated $29.3 million for the six months ended June 30, 2026 and 14.4 million for the three months ended June 30, 2026 of cannabis operations revenue and equal cost of sales associated with sales to provincial boards that are expected to be subsequently repurchased by the Company’s licensed retail subsidiaries for resale, at which point the full retail sales revenue will be recognized.


	Cannabis Retail		Cannabis Operations			Intersegment Eliminations			Cannabis Total			Liquor Retail		Investments		Corporate			Total
As at December 31, 2025
Total assets		219,462		211,625			—			431,087			324,447		397,537		182,846			1,335,917
Six months ended June 30, 2025
Net revenue (1)		161,939		70,155			(33,812	)		198,282			251,401		—		—			449,683
Gross profit		41,509		18,444			—			59,953			64,289		—		—			124,242
Operating income (loss) (2)		5,510		(9,304	)		—			(3,794	)		4,292		232		(7,780	)		(7,050	)
Earnings (loss) before income tax (2)		4,394		(9,424	)		—			(5,030	)		2,220		232		(9,244	)		(11,822	)
Three months ended June 30, 2025
Net revenue (1)		84,399		35,836			(17,395	)		102,840			141,929		—		—			244,769
Gross profit		21,882		9,233			—			31,115			36,486		—		—			67,601
Operating income (loss) (2)		4,183		(3,133	)		—			1,050			6,709		1,833		(4,589	)		5,003
Earnings (loss) before income tax (2)		3,620		(3,106	)		—			514			5,682		1,833		(5,144	)		2,885

(1)

The Company has eliminated $33.8 million for the six months ended June 30, 2025 and $17.4 million for the three months ended June 30, 2025 of cannabis operations revenue and equal cost of sales associated with sales to provincial boards that are expected to be subsequently repurchased by the Company’s licensed retail subsidiaries for resale, at which point the full retail sales revenue will be recognized.

(2)

Recast - refer to description below

In 2026, the Company began allocating applicable direct and indirect overhead costs, incorporating employee utilization and head count, from the corporate segment to each individual operating segment all categorized within general and administrative expenses. The Company has recast the comparative period to illustrate the impact of these allocations had they been done during the prior period.

The following tables present the effect of the adjustments made to operating income (loss) and earnings (loss) before income tax for the periods indicated.


	Cannabis Retail			Cannabis Operations			Intersegment Eliminations		Cannabis Total			Liquor Retail			Investments		Corporate			Total
Six months ended June 30, 2025
Operating income (loss) as previously reported		13,224			1,806			—		15,030			13,054			232		(35,366	)		(7,050	)
Adjustment to general and administrative expenses		(7,714	)		(11,110	)		—		(18,824	)		(8,762	)		—		27,586			—
Operating income (loss) as recast		5,510			(9,304	)		—		(3,794	)		4,292			232		(7,780	)		(7,050	)

Earnings (loss) before income tax as previously reported		12,108			1,686			—		13,794			10,982			232		(36,830	)		(11,822	)
Adjustment to general and administrative expenses		(7,714	)		(11,110	)		—		(18,824	)		(8,762	)		—		27,586			—
Earnings (loss) before income tax as recast		4,394			(9,424	)		—		(5,030	)		2,220			232		(9,244	)		(11,822	)


	Cannabis Retail			Cannabis Operations			Intersegment Eliminations		Cannabis Total			Liquor Retail			Investments		Corporate			Total
Three months ended June 30, 2025
Operating income (loss) as previously reported		8,062			2,292			—		10,354			11,074			1,833		(18,258	)		5,003
Adjustment to general and administrative expenses		(3,879	)		(5,425	)		—		(9,304	)		(4,365	)		—		13,669			—
Operating income (loss) as recast		4,183			(3,133	)		—		1,050			6,709			1,833		(4,589	)		5,003

Earnings (loss) before income tax as previously reported		7,499			2,319			—		9,818			10,047			1,833		(18,813	)		2,885
Adjustment to general and administrative expenses		(3,879	)		(5,425	)		—		(9,304	)		(4,365	)		—		13,669			—
Earnings (loss) before income tax as recast		3,620			(3,106	)		—		514			5,682			1,833		(5,144	)		2,885

Geographical disclosure

As at June 30, 2026, the Company had non-current assets related to credit investments in the United States of $400.4 million (December 31, 2025 – $385.5 million). For the six months ended June 30, 2026, share of profit of equity-accounted investees related to operations in the United States was a loss of $1.9 million (six months ended June 30, 2025 – loss of $4.2 million). All other non-current assets relate to operations in Canada and revenues from external customers relate to operations in Canada.

biological assets

The Company’s biological assets consist of cannabis plants in various stages of vegetation, including plants which have not been harvested. The change in carrying value of biological assets is as follows:


As at	June 30, 2026			December 31, 2025
Balance, beginning of year		3,120			1,187
Increase in biological assets due to capitalized costs		9,260			16,082
Net change in fair value of biological assets		(9	)		2,322
Transferred to inventory upon harvest		(9,529	)		(16,471	)
Balance, end of period		2,842			3,120

Biological assets are valued in accordance with International Accounting Standard 41 – Agriculture and are presented at their fair value less costs to sell up to the point of harvest. This is determined using a model which estimates the expected harvest yield in grams for plants currently being cultivated, and then adjusts that amount for the expected selling price less costs to produce and sell per gram.

The fair value measurements for biological assets have been categorized as Level 3 fair values based on the inputs to the valuation technique used. The Company’s method of accounting for biological assets attributes value accretion on a straight-line basis throughout the life of the biological asset from initial cloning to the point of harvest.

The Company estimates the harvest yields for cannabis at various stages of growth. As at June 30, 2026, it is estimated that the Company’s biological assets will yield approximately 12,932 kilograms (December 31, 2025 – 12,189

kilograms) of dry cannabis when harvested. During the six months ended June 30, 2026, the Company harvested 19,660 kilograms of dry cannabis (six months ended June 30, 2025 – 11,273 kilograms).

Inventory


As at	June 30, 2026		December 31, 2025
Retail liquor		79,125		75,145
Retail cannabis		16,457		16,348
Harvested cannabis
Work-in-progress		2,423		2,203
Finished goods		3,463		4,342
Manufactured cannabis
Dried cannabis & biomass		3,842		2,270
Work in progress		13,675		12,577
Finished goods		5,363		5,600
Packaging supplies and consumables		9,024		8,392
		133,372		126,877

During the three and six months ended June 30, 2026, inventories of $177.9 million and $319.4 million were recognized in cost of sales as an expense (three and six months ended June 30, 2025 – $177.6 million and $326.4 million).

During the three and six months ended June 30, 2026, the Company recognized inventory write downs of $1.2 million and $2.6 million (three and six months ended June 30, 2025 – $0.2 million and $0.8 million).

Right of use assets


Cost
Balance at December 31, 2025	270,591
Acquisition (note 4)	1,704
Additions	3,862
Renewals, remeasurements and dispositions	7,346
Balance at June 30, 2026	283,503

Accumulated depreciation and impairment
Balance at December 31, 2025	132,238
Depreciation	16,498
Impairment reversal	(300	)
Balance at June 30, 2026	148,436

Net book value
Balance at December 31, 2025	138,353
Balance at June 30, 2026	135,067

For the six months ended June 30, 2026, renewals, remeasurements and dispositions of $7.3 million mainly related to lease renewals for which the Company reassessed likely terms.

For the six months ended June 30, 2026, the Company recorded the following net impairment losses (reversals) on right of use assets:


	Reporting Segment
Three months ended	Liquor retail		Cannabis retail			Total
March 31, 2026		—		(300	)		(300	)
June 30, 2026		—		—			—
		—		(300	)		(300	)

Refer to note 9 for the significant assumptions applied in the impairment test.

For the six months ended June 30, 2025, the Company recorded the following net impairment losses (reversals) on right of use assets:


	Reporting Segment
Three months ended	Liquor retail		Cannabis retail			Total
March 31, 2025		—		(468	)		(468	)
June 30, 2025		—		(586	)		(586	)
		—		(1,054	)		(1,054	)

Property, plant and equipment


	Land		Production facilities			Leasehold improvements			Equipment			Construction in progress			Total
Cost
Balance at December 31, 2025		9,454		69,519			84,580			111,672			5,153			280,378
Acquisition (note 4)		—		—			1,172			—			—			1,172
Additions		—		565			21			1,691			1,510			3,787
Transfers from CIP		—		—			670			—			(670	)		—
Dispositions		—		(1,900	)		—			—			—			(1,900	)
Balance at June 30, 2026		9,454		68,184			86,443			113,363			5,993			283,437

Accumulated depreciation and impairment
Balance at December 31, 2025		689		11,567			45,907			70,315			—			128,478
Depreciation		—		1,438			4,115			4,664			—			10,217
Impairment (recovery)		—		475			(279	)		(76	)		—			120
Balance at June 30, 2026		689		13,480			49,743			74,903			—			138,815

Net book value
Balance at December 31, 2025		8,765		57,952			38,673			41,357			5,153			151,900
Balance at June 30, 2026		8,765		54,704			36,700			38,460			5,993			144,622

During the six months ended June 30, 2026, depreciation expense of $2.6 million was capitalized to biological assets and inventory (six months ended June 30, 2025 – $2.0 million).

During the three months ended March 31, 2026, the Company determined that indicators of impairment existed relating to the Stellarton facility due to slow moving market conditions. The estimated recoverable amount of the facility was determined to be its fair value less costs of disposal and an impairment of $0.5 million was recorded to write down the facility to its recoverable amount of $1.9 million. The fair value measurement was categorized within Level 3 of the fair value hierarchy. The impairment was recognized in the Company’s cannabis operations reporting segment. During the three months ended June 30, 2026, proceeds of $1.7 million were received for the disposition of the Stellarton facility and a loss on disposal of $0.2 million was recognized.

During the six months ended June 30, 2026, the Company determined that indicators of impairment reversal existed relating to one cannabis retail store and three liquor retail stores showing improved store level operating results. For impairment testing of retail property, plant and equipment and right of use assets, the Company determined that a

cash generating unit (“CGU”) was defined as each individual retail store. The Company completed impairment tests for each CGU determined to have an indicator of potential impairment or impairment reversal using a discounted cash flow model. The recoverable amounts for each CGU were based on the higher of its estimated value in use and fair value less costs of disposal using Level 3 inputs. The significant assumptions applied in the impairment test are described below:

•

Cash flows: Projected future sales and earnings for cash flows are based on actual operating results and operating forecasts. Management determined forecasted growth rates of sales based on past performance, expectations of future performance for each location and industry averages. Expenditures were based upon a combination of historical percentages of revenue, sales growth rates, forecasted inflation rates and contractual lease payments. The duration of the cash flow projections for individual CGUs is 5 years or based on the remaining lease term of the CGU.

•

Discount rate: A pre-tax discount rate range of 11.0% – 13.5% was estimated and is based on market assessments of the time value of money and CGU specific risks to determine the weighted average cost of capital for the given CGU.

For the six months ended June 30, 2026, the Company recorded the following net impairment losses (reversals) on retail property, plant and equipment:


	Reporting Segment
Three months ended	Liquor retail			Cannabis retail			Total
March 31, 2026		(171	)		(182	)		(353	)
June 30, 2026		—			(2	)		(2	)
		(171	)		(184	)		(355	)

The Company also recorded impairment losses and impairment reversals on right of use assets (note 8).

For the six months ended June 30, 2025, the Company recorded the following net impairment losses (reversals) on retail property, plant and equipment:


	Reporting Segment
Three months ended	Liquor retail		Cannabis retail			Total
March 31, 2025		—		(263	)		(263	)
June 30, 2025		—		(487	)		(487	)
		—		(750	)		(750	)

10.

Net investment in subleases


	June 30, 2026			December 31, 2025
Balance, beginning of year		14,418			18,186
Finance income		270			612
Rents recovered (payments made directly to landlords)		(1,668	)		(3,342	)
Dispositions and remeasurements		639			(1,038	)
Balance, end of period		13,659			14,418

Current portion		2,962			2,775
Long-term		10,697			11,643

Net investment in subleases represent leased retail stores that have been subleased to certain franchise partners. These subleases are classified as a finance lease as the sublease terms are for the remaining term of the head lease.

11.

Intangible assets


	Brands and trademarks		Franchise agreements		Software		Retail licenses		Total
Cost
Balance at December 31, 2025		81,900		10,000		5,589		6,482		103,971
Balance at June 30, 2026		81,900		10,000		5,589		6,482		103,971

Accumulated amortization and impairment
Balance at December 31, 2025		35,792		5,564		3,365		730		45,451
Amortization		86		619		443		242		1,390
Balance at June 30, 2026		35,878		6,183		3,808		972		46,841

Net book value
Balance at December 31, 2025		46,108		4,436		2,224		5,752		58,520
Balance at June 30, 2026		46,022		3,817		1,781		5,510		57,130

12.

Investments


As at	June 30, 2026		December 31, 2025
Investments at amortized cost		585		822
Investments at FVOCI		14,185		11,236
		14,770		12,058

Current portion		263		484
Long-term		14,507		11,574

Investments at amortized cost

The Company has loans outstanding to franchise partners with a total balance of $0.6 million, maturity dates ranging from August 2026 to June 2030, and annual interest rates ranging from 7.5% – 8%.

Investments at fAIR vALUE tHROUGH OTHER COMPREHENSIVE INCOME

During the six months ended June 30, 2026, the Company acquired an additional $4.1 million of investments in listed common shares that are not held for trading, for which the Company irrevocably elected at initial recognition to designate at fair value through other comprehensive income. The shares were marked to market to $14.2 million as a Level 1 investment and the corresponding $1.1 million loss was recognized in other comprehensive income.

13.

Equity-accounted investees


As at	June 30, 2026		December 31, 2025
Interest in joint venture		400,386		385,534

SunStream is a joint venture in which the Company has a 50% ownership interest. SunStream is a private company, incorporated under the Business Corporations Act (Alberta), which provides growth capital that pursues indirect investment and financial services opportunities in the cannabis sector, as well as other investment opportunities.

SunStream is structured separately from the Company, and the Company has a residual interest in the net assets of SunStream. Accordingly, the Company has classified its interest in SunStream as a joint venture, which is accounted for using the equity-method.

The current investment portfolio of SunStream is comprised of secured debt, hybrid debt, derivative instruments and convertible equity instruments with United States based cannabis businesses. These investments are recorded at fair value each reporting period with any changes in fair value recorded through profit or loss. SunStream actively monitors these investments for changes in credit risk, market risk and other risks specific to each investment.

The following table summarizes the carrying amount of the Company’s interest in the joint venture:


	Carrying amount
Balance at December 31, 2025		385,534
Share of net loss		(1,850	)
Share of other comprehensive income (taxes at 23%)		13,836
Capital contributions		2,866
Balance at June 30, 2026		400,386

SunStream is a related party due to it being classified as a joint venture of the Company. Capital contributions to the joint venture and distributions received from the joint venture are classified as related party transactions.

The following table summarizes the financial information of SunStream:


As at	June 30, 2026			June 30, 2025
Current assets (including cash and cash equivalents - 2026: $1.6 million, 2025: $1.4 million)		3,791			5,640
Non-current assets		392,081			375,361
Current liabilities		(3,485	)		(498	)
Net assets (liabilities) (100%)		392,387			380,503

Six months ended June 30	2026			2025
Revenue (loss)		(648	)		(2,748	)
Profit (loss) from operations		(1,437	)		(3,821	)
Other comprehensive income (loss)		13,836			(20,959	)
Total comprehensive income (loss)		12,404			(24,781	)

14.

Lease Liabilities


	June 30, 2026			December 31, 2025
Balance, beginning of year		169,933			152,273
Acquisition (note 4)		1,305			—
Additions		3,860			9,634
Lease payments		(21,825	)		(42,587	)
Renewals, remeasurements and dispositions		7,935			42,790
Tenant inducement allowances received		861			303
Accretion expense		4,308			7,520
Balance, end of period		166,377			169,933

Current portion		36,093			35,462
Long-term		130,284			134,471

For the six months ended June 30, 2026, renewals, remeasurements and dispositions of $7.9 million mainly related to lease renewals for which the Company reassessed likely terms.

The following table presents the contractual undiscounted cash flows, excluding periods covered by lessee lease extension options that have been included in the determination of the lease term, related to the Company’s lease liabilities as at June 30, 2026:


	June 30, 2026
Less than one year		32,864
One to three years		73,213
Three to five years		50,758
Thereafter		11,277
Minimum lease payments		168,112

15.

Share capital and warrants

Authorized

The authorized capital of the Company consists of an unlimited number of voting common shares and preferred shares with no par value.

Issued and outstanding


		June 30, 2026						December 31, 2025
	Note	Number of Shares			Carrying Amount			Number of Shares			Carrying Amount
Balance, beginning of year			263,359,123			2,310,398			263,021,847			2,346,728
Share issuances			3,263			10			—			—
Share issuance costs			—			—			—			—
Share repurchases			(16,200,753	)		(141,874	)		(5,899,897	)		(52,688	)
Acquisitions			—			—			—			—
Employee awards exercised			1,500,526			3,299			6,237,173			16,358
Balance, end of period			248,662,159			2,171,833			263,359,123			2,310,398

During the six months ended June 30, 2026, the Company purchased and cancelled 16.2 million common shares, pursuant to its repurchase program, at a weighted average price, excluding commissions, of $2.02 (US$1.46) per common share for a total cost of $33.1 million including commissions. Accumulated deficit was reduced by $108.6 million, representing the excess of the average carrying value of the common shares over their purchase price.

Subsequent to June 30, 2026, the Company issued 1.5 million common shares in connection with the vesting of RSUs under its long term incentive plan and purchased and cancelled 1.9 million common shares, pursuant to its repurchase program, at a weighted average price, excluding commissions, of $1.87 (US$1.32) per common share for a total cost of $3.6 million including commissions.

16.

Share-based compensation

The Company has a number of share-based compensation plans which include simple and performance warrants, stock options, restricted share units (“RSUs”) and deferred share units (“DSUs”). During 2019, the Company established the stock option, RSU and DSU plans to replace the granting of simple warrants and performance warrants.

The components of share-based compensation expense are as follows:


	Three months ended June 30					Six months ended June 30
	2026		2025			2026			2025
Equity-settled expense
Restricted share units (C)		2,078		3,621			3,884			6,080
Cash-settled (recovery) expense
Deferred share units (1) (D)		572		(702	)		(618	)		(1,773	)
		2,650		2,919			3,266			4,307

(1)

Cash-settled DSUs are accounted for as a liability and are measured at fair value based on the market value of the Company’s common shares at each period end. Fluctuations in the fair value are recognized during the period in which they occur.

Equity-settled plans

Simple and performance warrants

The Company issued simple warrants and performance warrants to employees, directors and others at the discretion of the Board. Simple and performance warrants granted generally vest annually over a three-year period, simple warrants expire five years after the grant date and performance warrants expire five years after vesting criteria are met.

The following table summarizes changes in the simple and performance warrants during the six months ended June 30, 2026:


	Simple warrants outstanding			Weighted average exercise price		Performance warrants outstanding			Weighted average exercise price
Balance at December 31, 2025		16,320		$	64.32		20,800		$	40.38
Forfeited		(320	)		155.19		—			0.00
Expired		—			0.00		(12,800	)		18.75
Balance at June 30, 2026		16,000		$	62.50		8,000		$	75.00

The following table summarizes outstanding simple and performance warrants as at June 30, 2026:


	Warrants outstanding						Warrants exercisable
Range of exercise prices	Number of warrants		Weighted average exercise price		Weighted average contractual life (years)		Number of warrants		Weighted average exercise price		Weighted average contractual life (years)
Simple warrants
$62.50 - $93.75		16,000	$	62.50		0.53		16,000	$	62.50		0.53
Performance warrants
$62.50 - $93.75		8,000	$	75.00	n/a			—	$	—	n/a

Stock options

The Company issues stock options to employees and others at the discretion of the Board. Stock options granted generally vest annually over a three-year period and generally expire ten years after the grant date.

The following table summarizes changes in stock options during the six months ended June 30, 2026:


	Stock options outstanding			Weighted average exercise price
Balance at December 31, 2025		320,951		$	11.86
Forfeited		(236,853	)		11.79
Balance at June 30, 2026		84,098		$	12.05

The following table summarizes outstanding stock options as at June 30, 2026:


	Stock options outstanding				Stock options exercisable
Exercise prices	Number of options		Weighted average contractual life (years)		Number of options		Weighted average contractual life (years)
$11.50		10,000		3.91		10,000		3.91
$11.79		64,738		0.55		64,738		0.55
$11.90		8,160		3.99		8,160		3.99
$31.50		1,200		1.49		1,200		1.49
		84,098		1.30		84,098		1.30

Restricted share units

RSUs are granted to employees and the vesting requirements and maximum term are at the discretion of the Board. RSUs are exchangeable for an equal number of common shares.

The following table summarizes changes in RSUs during the six months ended June 30, 2026:


	RSUs outstanding
Balance at December 31, 2025		6,855,023
Granted		3,704,062
Forfeited		(745,415	)
Exercised		(1,500,526	)
Balance at June 30, 2026		8,313,144

At June 30, 2026, no RSUs were vested or exercisable.

Cash-settled plans

Deferred share units

DSUs are granted to directors and generally vest in equal instalments over one year. DSUs are settled by making a cash payment to the holder equal to the fair value of the Company’s common shares calculated at the date of such payment.

The DSU plan was amended for grants made in 2025 and onward, allowing directors who have met the Company’s share ownership guidelines to select a redemption date based on specific criteria. All DSUs granted prior to December 31, 2024 can only be exercised once a director ceases to be on the Board. The fair value of DSUs that will be redeemed within the next year are classified as a current liability within accounts payable.

As at June 30, 2026, the Company recognized a liability of $7.0 million relating to the fair value of cash-settled DSUs (December 31, 2025 – $8.1 million) with $6.9 million (December 31, 2025 – $7.6 million) included as a non-current

liability within other liabilities and $0.1 million (December 31, 2025 – $0.5 million) included as a current liability within accounts payable.

The following table summarizes changes in DSUs during the six months ended June 30, 2026:

At June 30, 2026, 3.66 million DSUs were vested (December 31, 2025 – 3.57 million) and 0.14 million were exercisable (December 31, 2025 – 0.3 million).

17.

NET revenue

Liquor retail revenue is derived from the sale of wines, beers and spirits to customers and proprietary licensing. Cannabis retail revenue is derived from retail cannabis sales to customers, proprietary licensing, franchise revenue consisting of royalty and franchise fee revenue, and other revenue consisting of millwork, supply and accessories revenue. Cannabis operations revenue is derived from contracts with customers and is comprised of sales to provincial boards that sell cannabis through their respective distribution models, sales to licensed producers for further processing, provision of proprietary cannabis processing services, product development, manufacturing and commercialization of cannabis consumer products and sales to medical customers.


	Three months ended June 30						Six months ended June 30
	2026			2025			2026			2025
Liquor retail revenue
Retail		134,320			141,479			238,016			250,501
Proprietary licensing		388			450			775			900
Liquor retail revenue		134,708			141,929			238,791			251,401
Cannabis retail revenue
Retail		77,715			78,891			150,164			151,147
Proprietary licensing		4,376			4,280			8,241			8,357
Franchise		1,113			1,228			2,144			2,435
Cannabis retail revenue		83,204			84,399			160,549			161,939
Cannabis operations revenue
Provincial boards		34,530			37,413			67,107			72,268
Wholesale		8,633			11,133			16,219			22,616
Analytical testing and other		5			106			113			310
Intersegment eliminations		(14,378	)		(17,395	)		(29,332	)		(33,812	)
Cannabis operations revenue		28,790			31,257			54,107			61,382
Gross revenue		246,702			257,585			453,447			474,722
Excise taxes (1)		10,936			12,816			21,775			25,039
Net revenue		235,766			244,769			431,672			449,683

(1)

Excise tax is only applicable to cannabis operations provincial board revenue.

18.

Investment income


	Three months ended June 30				Six months ended June 30
	2026		2025		2026		2025
Interest income from investments at amortized cost		8		18		22		1,391
Interest income from cash		1,000		1,300		2,468		2,783
Gain on marketable securities		—		211		55		211
		1,008		1,529		2,545		4,385

19.

Other (expenses) INCOME, NET


	Three months ended June 30						Six months ended June 30
	2026			2025			2026			2025
Finance (costs) income
Accretion on lease liabilities		(2,135	)		(1,798	)		(4,308	)		(3,628	)
Financial guarantee liability recovery		8			14			20			28
Other finance costs		—			(18	)		(38	)		(59	)
Interest income		133			155			270			322
Total finance costs		(1,994	)		(1,647	)		(4,056	)		(3,337	)
Change in fair value of derivative warrants		—			13			—			25
Transaction costs		(282	)		(318	)		(623	)		(1,096	)
Foreign exchange loss		610			(166	)		719			(364	)
		(1,666	)		(2,118	)		(3,960	)		(4,772	)

20.

SUPPLEMENTAL CASH FLOW DISCLOSURES


	Three months ended June 30						Six months ended June 30
	2026			2025			2026			2025
Cash provided by (used in):
Accounts receivable		(4,085	)		374			6,717			(1,217	)
Biological assets		72			(372	)		269			(1,123	)
Inventory		159			(806	)		(9,215	)		(6,377	)
Prepaid expenses and deposits		(24	)		(4,131	)		297			1,848
Investments		—			(27	)		—			—
Right of use assets		1			(2,955	)		(3,858	)		(2,949	)
Property, plant and equipment		(274	)		(20	)		637			(29	)
Accounts payable and accrued liabilities		(5,201	)		(8,859	)		(9,057	)		(7,615	)
Lease liabilities		7			3,172			4,728			3,234
		(9,345	)		(13,624	)		(9,482	)		(14,228	)

Changes in non-cash working capital relating to:
Operating		(9,123	)		(13,763	)		(10,990	)		(14,476	)
Investing		(274	)		(47	)		637			(29	)
Financing		52			186			871			277
		(9,345	)		(13,624	)		(9,482	)		(14,228	)

21.

Earnings (Loss) per share


	Three months ended June 30					Six months ended June 30
	2026			2025		2026			2025
Weighted average shares outstanding (000s)
Basic (1)		256,723			257,310		258,998			258,213
Dilutive effect of RSUs		—			5,990		—			—
Basic and diluted (1)		256,723			263,300		258,998			258,213
Net loss attributable to owners of the Company		(7,822	)		2,885		(17,733	)		(11,822	)
Per share - basic and diluted	$	(0.03	)	$	0.01	$	(0.07	)	$	(0.05	)

(1)

For the six months ended June 30, 2026, there were 54.4 thousand equity classified warrants, 16.0 thousand simple warrants, 8.0 thousand performance warrants, 0.1 million stock options and 8.3 million RSUs that were excluded from the calculation as the impact was anti-dilutive (six months ended June 30, 2025 – 118.4 thousand equity classified warrants, 50.0 thousand derivative warrants, 21.4 thousand simple warrants, 24.8 thousand performance warrants, 0.6 million stock options and 13.2 million RSUs).

22.

Financial instruments

The financial instruments recognized on the consolidated statement of financial position are comprised of cash and cash equivalents, restricted cash, marketable securities, accounts receivable, investments at amortized cost, investments at FVOCI and accounts payable and accrued liabilities.

Fair value

The carrying value of cash and cash equivalents, restricted cash, accounts receivable and accounts payable and accrued liabilities approximate their fair value due to the short-term nature of the instruments. The carrying value of

investments at amortized cost approximate their fair value as the fixed interest rates approximate market rates for comparable transactions.

Fair value measurements of marketable securities, investments at FVOCI and derivative warrants are as follows:


			Fair value measurements using
June 30, 2026	Carrying amount		Level 1		Level 2		Level 3
Recurring measurements:
Financial assets
Marketable securities		139		139		—		—
Investments at FVOCI		14,185		14,185		—		—
			Fair value measurements using
December 31, 2025	Carrying amount		Level 1		Level 2		Level 3
Recurring measurements:
Financial assets
Marketable securities		84		84		—		—
Investments at FVOCI		11,236		11,236		—		—

There were no transfers between Levels 1, 2 and 3 inputs during the period.

23.

Commitments and contingencies

The following table summarizes contractual commitments at June 30, 2026:


	Less than one year		One to three years		Three to five years		Thereafter		Total
Accounts payable and accrued liabilities		46,193		—		—		—		46,193
Financial guarantee liability		—		127		—		—		127
Loyalty liability		—		620		—		—		620
Balance, end of year		46,193		747		—		—		46,940

Commitments

The Company has entered into certain supply agreements to provide dried cannabis and cannabis products to third parties. The contracts require the provision of various amounts of dried cannabis on or before certain dates. Should the Company not deliver the product in the agreed timeframe, financial penalties apply which may be paid either in product in-kind or cash.

Contingencies

From time to time, the Company and its subsidiaries are or may become involved in various legal claims and actions which arise in the ordinary course of their business and operations. While the outcome of any such claim or action is inherently uncertain, after consulting with counsel, the Company believes that the losses that may result, if any, will not be material to the consolidated financial statements.