EDMONTON, AB, March 31,
2022 /CNW/ - Nova Cannabis Inc. (the "Company"
or "Nova") (TSX: NOVC) today announced changes to both its
Board of Directors (the "Board") and management team along
with the restructuring of its Ontario retail operations in connection with
the completion of the acquisition (the "Acquisition") of all
of the issued and outstanding common shares of Alcanna Inc.
("Alcanna") by Sundial Growers Inc. ("Sundial").
Pursuant to the Acquisition, Sundial indirectly acquired an
approximately 63% ownership interest in Nova, as Alcanna is the
registered holder of 35,750,000 Nova common shares.
James Burns (Board Chair),
Thomas Bitove, Ross Sinclair, Marvin
Singer and Darren Karasiuk
have all resigned from the Board while Ron
Hozjan will continue to serve as a director of the Company
and has been appointed the new Chair of the Audit Committee.
The Company also announced the resignation of Darren Karasiuk as President and Chief Executive
Officer and that current Chief Operating Officer, Marcie Kiziak, has been named Chief Executive
Officer of Nova and President, Cannabis Retail of Sundial,
effective immediately.
Composition of the Board
As a result of the foregoing, Nova is pleased to announce the
appointment of the following new Board members, each of whom brings
unique skills and experiences to the Company.
- Zach George, Chair
-
- Chief Executive Officer, Sundial
- Anne Fitzgerald, Lead
Independent Director
-
- Former Chief Legal Officer and Corporate Secretary, Cineplex
Inc.
- Marcie Kiziak
-
- Chief Executive Officer, Nova
- President, Cannabis Retail, Sundial
- Christopher Pelyk
-
- Vice President, Store Development Global, Arcteryx
- Jeffrey Dean
-
- Managing Partner, Maven Capital
- Shari Mogk-Edwards
-
- Founder, Shari's Picks Consulting
- Former Vice President, Product, Sales and Merchandising, Liquor
Control Board of Ontario
Following the foregoing appointments and reorganization of the
Board, a total of five (5) out of the seven (7) directors are
considered to be "independent" for the purposes of applicable
securities legislation.
New Senior Management
Team
Prior to being named Nova's CEO, Ms. Kiziak served as Chief
Operating Officer of Nova since completion of the reverse take-over
of YSS Inc. in March 2021 and was
President of Alcanna's cannabis division while Nova was a
wholly-owned Alcanna subsidiary.
"On behalf of the Nova shareholders, the Board would like to
thank Darren for his dedication and his commitment to establishing
Nova as a force in the cannabis retail industry," said Zach George, Chief Executive of Sundial and
newly appointed Chairman of Nova. "Marcie was our first choice to
assume the CEO position to fill the void resulting from Darren's
departure. Marcie was already an integral part of the Nova team
before this appointment and continues to be highly focused on
maximizing labour efficiency within our store footprint and
optimizing the Value Buds customer experience. We believe she is
the right leader for the Company and its employees going
forward."
Furthermore, Cameron Sebastian
has been named Nova's Chief Financial Officer, while David Gordey, the Company's current CFO, will be
continuing in a senior management role with Sundial. Prior to
joining Sundial in 2019 as Vice President, Finance, Mr. Sebastian
held senior executive positions in public energy companies for over
25 years. He holds a Chartered Professional Accountants of
Canada designation and is a
graduate of the University of
Calgary.
Sale of Ontario Retail
Operations
In order to comply with the regulatory restrictions that
prohibit Sundial, as a licensed producer of cannabis, from directly
or indirectly owning or controlling more than a 25% interest in any
licensed Ontario cannabis retailer
(other than a single "farmgate" store), including Nova, the Company
has entered into an agreement whereby it has sold its Ontario cannabis retail stores by way of an
asset purchase transaction and the establishment of a
brand-licensing and services arrangement and re-purchase option
with regards to those same stores.
Pursuant to the agreement, the Company has sold 21 Ontario
retail stores (either already opened or planned to be opened in the
coming months) to Spirit Leaf Ontario Inc. (the
"Purchaser"), an experienced arm's length operator of
cannabis retail stores in the province, for a purchase price of
$11 million and has concurrently
entered into a brand-licensing and services arrangement pursuant to
which the Purchaser will continue to operate the Ontario retail stores under Nova's existing
"Value Buds" banner and the Company will continue to provide the
services of its management and retail operating personnel in
compliance with applicable law.
Nova will continue to provide funding for capital investment and
operations of these stores and will be entitled to the economic
upside of these stores, less a fee payable to the Purchaser.
The Purchaser has also granted the Company an option (the
"Buyback Option") to repurchase the Ontario retail stores for a purchase price
(subject to adjustments) equal to $11
million (plus the value of all cash and retained earnings),
which Buyback Option will be exercisable once the regulatory
prohibition is no longer an issue and ownership is permitted under
applicable law. The Purchaser and the Company both intend for the
Purchaser to continue operating the Ontario retail stores in a manner consistent
with the "Value Buds" standard for high value and quality customer
service.
Nova Going
Forward – Multiple Banners & Leveraging the Sundial
Platform
"Sundial, under the purview of the Nova Board of Directors,
intends to provide both capital support and management services to
Nova, subject to compliance with applicable laws, with the goal of
building a dominant, publicly listed Canadian cannabis retail
platform," added Mr. George. "Nova represents a unique opportunity
to consolidate Sundial's existing retail exposure and potentially
acquire additional third-party banners with the support of
Sundial's currency. To support Nova's ability to participate
and grow in the Ontario retail
market, Sundial intends to decrease its ownership interest in Nova
over time as the business model evolves. Sundial's Board of
Directors intends to evaluate all options regarding its ownership
in Nova, including the potential to dividend a portion of its Nova
shares to Sundial shareholders while maintaining regulatory
compliance."
"Nova plans to own and operate multiple banners and lead the
industry in the rationalization of the retail footprint already
underway across Canada over the
next few years," added Ms. Kiziak. "We remain more committed
than ever to delivering high-quality cannabis products to Canadian
consumers."
Director Biographies
Zach George,
Chair
Zach George
serves as the Chief Executive Officer of Sundial Growers Inc. He
co-founded the alternative investment platform FrontFour Capital
Group LLC. Mr. George previously served as chairman of the boards
of FAM Real Estate Investment Trust and Huntingdon Capital Corp.,
as the lead independent director of both Cornell Companies Inc. and
PW Eagle Inc., and on the board of Cominar REIT, Trez Capital
Junior Mortgage Investment Company, Allied Defense Group Inc. and
IAT Air Cargo Facilities Income Fund. He has worked in a management
capacity and with numerous corporate boards to turnaround
operations, effect corporate action, and implement governance
policies aimed at maximizing shareholder value. He holds a Bachelor
of Arts degree from Simon Fraser
University and a Juris Doctor degree from Brooklyn Law
School.
Anne Fitzgerald, Lead
Independent Director
Anne
Fitzgerald oversees all legal, corporate affairs, and
insurance matters relating to Cineplex and its subsidiaries; she
also serves as Corporate Secretary. She has practiced law in both
Canada and the United States, primarily in litigation
roles in areas of corporate-commercial, securities, criminal, tax,
and entertainment. Ms. Fitzgerald is currently a member of the
Board of Directors for each of the National Association of Theater
Owners, the Movie Theatre Association of Canada (Vice Chair) and the Global Cinema
Federation (Executive Committee) and previously served for 10 years
on the board of the Academy of Canadian Cinema and Television
(Governance and Audit Committees). Ms. Fitzgerald volunteers her
time and expertise as the Chair of the Board of Directors of
Outward-Bound Canada and serves on the Duke
University Divinity School Board of Visitors. She was
inducted as a Fellow of the Royal Canadian Geographic Society in
2012 and was honoured in 2014 as a National Post/ZSA General
Counsel of the Year. In 2019, Ms. Fitzgerald was named by WXN as
one of Canada's 100 Most Powerful
Women. She holds a BA in Public Policy as well as a Juris Doctor,
both from Duke University.
Marcie
Kiziak
Marcie
Kiziak previously served as Chief Operating Officer of Nova
since the Company began trading on the Toronto Stock Exchange in
March 2021, and was President of
Alcanna's cannabis division while Nova was a wholly-owned Alcanna
subsidiary. Prior to joining Alcanna, Ms. Kiziak was the Vice
President of Human Resources and Safety for Corrosion and Abrasion
Solutions Ltd. from 2013 until 2017 which included a secondment
into operations to lead a business transformation. Ms. Kiziak also
spent 15 years in the oil & gas and construction sectors
focused on senior HR leadership, M&A and integration. Ms.
Kiziak holds a Bachelor of Management Degree and is a Chartered
Professional in Human Resources.
Christopher
Pelyk
An experienced professional with more than
20 years of experience in retail store expansion, operations, and
development, Christopher Pelyk uses
his real estate and development skills and experience to help
companies expand and operate around the world. Most recently, Mr.
Pelyk served as Senior Director of Store Development in
Asia at lululemon overseeing the
development, design, and strategic planning of retail concepts
throughout the region. Previously, he established and implemented a
strategic real estate plan opening retail concepts for Fossil,
adidas, and Apple throughout Asia.
He holds a BA in Applied Geo Statistics from Ryerson University and an EMBA from the Richard
Ivey School of Business at The University of
Western Ontario.
Jeffrey
Dean
Jeffrey Dean
is a Managing Partner at Maven Capital, an advisory and private
equity firm based in Toronto. Prior to co-founding Maven
Capital, Mr. Dean held various senior positions at RBC Capital
Markets in RBC's Real Estate Group. Mr. Dean has
significant experience in real estate, mergers and
acquisitions, valuations, corporate governance, equity and debt
financing for both public and private companies and property
portfolio advisory. Over the last 20 years, Mr. Dean has
advised on over $13 billion of public
M&A transactions, $15 billion of
debt and equity financings and more recently has been focused on
corporate and shareholder governance. He is also a trusted
advisor to a number of senior management teams and public/private
boards of directors in the real estate space. Mr. Dean
has a Bachelor of Commerce (High Distinction) from the
University of Toronto.
Ron
Hozjan
Ron Hozjan
has served as a director of the Company (and its predecessor, YSS
Corp.) since June 2018 and is
currently a member of the Company's audit committee of the Board.
Mr. Hozjan became a director of Carbeeza Inc. in June 2020 and became a director of Target Capital
Inc. in September 2020. Since
January 2020, Mr. Hozjan has held the
role of Vice President, Finance, and Chief Financial Officer of
Aureus Energy Services Inc. Prior to it, he served as Vice
President, Finance, and Chief Financial Officer of Tamarack Valley
Energy Ltd. (TSX: TVE) from June 2010
until January 2020. Mr. Hozjan has
also served as a director of Aloha Brands Inc. since April 2019. Mr. Hozjan holds a Chartered
Professional Accountants of Canada
designation.
Shari
Mogk-Edwards
Shari
Mogk-Edwards is an accomplished, high-energy sales and
merchandising executive with 40 years of experience in the beverage
alcohol industry. As Vice-President, Products, Sales, and
Merchandising at the LCBO, Shari consistently exceeded business
targets in highly competitive market conditions. Shari Mogk-Edwards is the founder of Shari's
Picks Consulting, providing her clients with strategies for
effective product marketing and development, including the
packaging of beverage alcohol for the Ontario market. She also developed and
trademarked Shari's Picks specifically to demystify wine for the
mainstream consumer. She has completed the Ivey Executive Program
from the Richard Ivey School of Business at The University of Western Ontario, as well as the
Not-For-Profit Board Governance Essentials Program at the Rotman
School of Business.
ABOUT NOVA CANNABIS INC.
Nova Cannabis Inc. (TSX: NOVC) is one of Canada's largest and fastest-growing cannabis
retailers with a goal of disrupting the cannabis retail market by
offering a wide range of high-quality cannabis products at
every-day best value prices. The Company currently owns or operates
seventy-eight (78) locations across Alberta, Ontario, and Saskatchewan, primarily under its "Value Buds"
banner.
Additional information about Nova Cannabis Inc. is available at
www.sedar.com and the Company's website at
www.novacannabis.ca.
FORWARD-LOOKING
STATEMENTS
This news release contains information that, to the extent that
they are not historical fact, may constitute "forward-looking
information" or "forward-looking statements" within the meaning of
applicable securities legislation (collectively "forward-looking
statements"). Forward-looking statements are typically,
but not always, identified by the use of words such as "continue",
"anticipate", "will", "expect", "project", "to be", "objective",
"should", "plan", "intention", and similar words, including
negatives thereof, or other similar expressions concerning matters
that are not historical facts. All statements and information other
than statements of historical fact contained in this news release
are forward-looking statements.
With respect to forward-looking statements contained in this
news release, the Company has made assumptions regarding, among
other things: the success and manner of the operation of the
purchased Ontario cannabis retail
stores by the Purchaser and the Company, including its consistency
with the "Value Buds" brand; if and/or when the Company anticipates
exercising the Buyback Option; if and/or when Sundial anticipates
reduce its ownership interest in Nova and the manner in which it
intends to do so; the Company's ability to identify locations for,
construct and open, new stores and the costs related thereto; the
availability of hardware and equipment for those stores; government
regulations and applicable laws will not change in a manner adverse
to the Company; receipt of necessary regulatory approvals to open
new stores and/or to reacquire the Ontario retail stores pursuant to the Buyback
Option; the Company's ability to obtain leases for new sites and
attract the necessary personnel to operate new stores; demand for
the products the Company sells; other factors that will drive sales
growth in the "Value Buds" banner; availability of acquisition
opportunities; sustainability of competitors' businesses and
competition in the retail cannabis industry, including from the
illicit cannabis market; consumer demands; and factors that
influence consumer behaviour.
Although the Company believes the expectations reflected in the
forward-looking-statements, and the assumption on which such
forward-looking statement are made, are reasonable, especially
given the unprecedented uncertainty of the full extent and impact
of COVID-19, there can be no assurance that such expectations and
assumptions will prove to be correct. Readers should not place
undue reliance on forward-looking-statements included in this news
release. Forward-looking statements are not guarantees of future
performance and involve a number of risks and uncertainties that
may cause actual performance and financial results to differ
materially from any estimates, forecasts or projections. These
risks and uncertainties include, among other things, the duration
and severity of the COVID-19 pandemic on the business, operations
and financial condition of the Company; the risk that Nova will be
unable to execute its strategic plan and growth strategy as planned
without significant adverse impacts from various factors beyond its
control; dependence on suppliers; potential delays or changes in
plans with respect to capital expenditures and the availability of
capital on acceptable terms; risks inherent in the retail cannabis
industry; competition for, among other things, customers, supply,
capital and skilled personnel; changes in labour costs and markets;
incorrect assessments of the value of acquisitions; general
economic and political conditions in Canada (including Alberta, Saskatchewan and Ontario), and globally; industry conditions,
including changes in government regulations; fluctuations in
foreign exchange or interest rates; unanticipated operating events;
failure to obtain regulatory and third-party consents and approval
when required; changes in tax and other laws that affect us and our
shareholders; the potential failure of counterparties to honour
their contractual obligations; stock market volatility; and the
other factors described in the Company's public filings available
at www.sedar.com. Readers are cautioned that this list of risk
factors should not be construed as exhaustive.
The forward-looking statements contained in this news release
are made as of the date hereof. Except as expressly required by
applicable securities legislation, Nova does not undertake any
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. The forward-looking statements contained in this news
release are expressly qualified by this cautionary statement.
SOURCE Nova Cannabis Inc.