Sundial Growers Inc. (NASDAQ:SNDL) Q1 2022 Earnings Conference Call May 17, 2022 10:30 AM ET
Company Participants
Zach George - Chief Executive Officer
Jim Keough - Chief Financial Officer
Andrew Stordeur - President and Chief Operating Officer
Conference Call Participants
Frederico Gomes - ATB Capital Markets
Matthew Baker - Cantor Fitzgerald
Operator
Good morning, and welcome to Sundial Growers First Quarter 2020 Financial Results Conference Call. Yesterday, Sundial issued a press release announcing their financial results for the first quarter ended on March 31, 2022. This press release is available on the company's website at sndlgroup.com and filed on EDGAR and SEDAR as well. The webcast replay of the conference call will also be available on the sndlgroup.com website.
Sundial has also posted a supplemental investor presentation found on the sndlgroup.com website. Presenting on this morning's call, we have Zach George, Chief Executive Officer; Jim Keough, Chief Financial Officer; and Andrew Stordeur, President and Chief Operating Officer.
Before we start, I would like to remind investors that certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's financial reports and other public filings that are made available on SEDAR and EDGAR. Additionally, all financial figures mentioned are in Canadian dollars unless otherwise indicated. We will now make prepared remarks, and then we'll move on to analyst questions.
I would now like to turn the call over to Zach George.
Zach George
Good morning, everyone, and thank you for joining us on our first quarter 2022 earnings call. The first quarter of 2022 was both transformational and transitional for Sundial. Through our acquisition of Alcanna, Sundial is now Canada's largest private sector distributor of both liquor and cannabis with an industry-leading balance sheet and access to capital.
In terms of results, our net revenue was $17.6 million, including 1 day of revenue from the acquisition of Alcanna on March 31, which represents an increase of over 78% over the first quarter of 2021. Had the acquisition of Alcanna occurred on January 1, 2022, and revenue would have increased by approximately $162 million, a single day of contribution from Alcanna and Nova in Q1 amounted to approximately $2 million in revenue.
One of the most powerful highlights of this quarter is the material improvement in gross margins in our cannabis operations. While we have a significant amount of work yet to do, we have reduced costs and created a more balanced and diverse product mix that focuses on higher margin, higher-quality cannabis. Our cultivation techniques and processes continue to be refined, and we achieved our all-time highest average THC potency results of approximately 24% in Q1.