The Board of Directors (the "Board") of Alcanna Inc. ("Alcanna") is excited to invite you to attend a special meeting (the "Meeting") of the holders (the "Alcanna Shareholders") of common shares (the "Alcanna Shares"). The Meeting will be held in person at the head office of Alcanna located at 101, 17220 Stony Plain Rd., Edmonton, Alberta T5S 1K6 at 10:00 a.m. (Mountain time) on December 14, 2021. This is an important Meeting, at which you will have the opportunity to vote on a transaction that we strongly support.

The Special Meeting of Alcanna Inc. Shareholders
At the Meeting, you will be asked to vote on a special resolution (the "Arrangement Resolution") to consider, and if deemed advisable, pass a proposed plan of arrangement (the "Arrangement") involving Alcanna, Sundial Growers Inc. ("Sundial") and the Alcanna Shareholders pursuant to an arrangement agreement (the "Arrangement Agreement") dated effective as of October 7, 2021 between Alcanna and Sundial. Pursuant to the Arrangement Agreement, Sundial has agreed to acquire all of the issued and outstanding Alcanna Shares in exchange for common shares of Sundial (the "Sundial Shares").

Terms of the Arrangement Agreement
Under the terms of the Arrangement, Alcanna Shareholders will receive will receive 10.69 Sundial Shares for each Alcanna Share held (the "Consideration"). The Consideration represents an acquisition price of approximately $9.12 per Alcanna Share, which represents a 39% premium to the 10-day volume weighted average trading price ("VWAP") of the Alcanna Shares on the TSX before September 1, 2021, being the date that Alcanna and Sundial entered in a non-binding letter of intent in respect of the Arrangement and a 23% premium to the 10-day VWAP of the Alcanna Shares on the TSX for the period preceding the September 15, 2021 press release regarding Alcanna's trading activity.

Benefits of the Proposed Arrangement for Alcanna Shareholders
The Board, after receiving legal and financial advice, and carefully considering the benefits and risks associated with the proposed Arrangement and all reasonable available alternatives has determined that the Arrangement is in the best interests of Alcanna for the following reasons, among others:

 

  • Value Creation: The value offered to Alcanna Shareholders under the Arrangement represents a 104% increase from the Alcanna closing price of $4.48 on October 6, 2020 (one year prior to the Arrangement Agreement), crystallizing the value of the Alcanna Shares more favourably than might have resulted from other strategic alternatives available to Alcanna.
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  • A Larger, More Diversified Company: As Alcanna Shareholders will receive Sundial Shares, the Arrangement offers Alcanna Shareholders the opportunity to participate in the future growth of Sundial, a leading cannabis business with significant growth opportunities associated with Sundial's significant unrestricted cash position. The Arrangement is expected to allow management of the consolidated entity to also focus more effort on its rapidly expanding investment arm through the joint venture with SunStream Bancorp Inc.
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  • Continued Growth: The Arrangement will represent immediate value creation for Alcanna Shareholders, who are expected to hold approximately 16% ownership in a large and rapidly growing diversified business, which includes significant retail, production, branding and investment businesses. Alcanna's business will be able to pursue future growth with access to Sundial's significant current unrestricted cash position of approximately $628.2 million as of October 7, 2021.
  • Significant Shareholder Support—All of the directors and executive officers of Alcanna who own Alcanna Shares, have entered into Voting Support Agreements, pursuant to which such Supporting Shareholders have agreed, on the terms and conditions specified therein, to vote their Alcanna Shares in favour of the Arrangement Resolution. As of October 7, 2021, the Supporting Shareholders beneficially owned, or exercised control or direction over, an aggregate of 4,178,356 Alcanna Shares, representing approximately 12% of the issued and outstanding Alcanna Shares as of the date thereof on a non-diluted basis.