Nova Cannabis Inc. Announces Changes to its Board of Directors & Management Team, Restructuring of Ontario Retail Operations
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.
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.
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.
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.
"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."
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.
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.
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.
Marcie Kiziak, Chief Executive Officer, Nova Cannabis Inc., [email protected]
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