Currently a business that is focused on growing cannabis for sale in Canada, Sundial is now in a position to go global — but not in the way that investors might expect.
Sunstream Bancorp, the joint venture Sundial announced in March with Canadian alternative investment management firm SAF Group, aims to make money by issuing loans and investing in cannabis companies and marketable securities.
How could such a move make sense for a company that’s primarily built around growing and selling cannabis? In fact, it’s not as crazy as it might seem because Sundial is already operating like a cannabis investment bank.
There are two reasons to believe that this unrestricted cash balance will be used aggressively for lending and the purchase of investments.
That exposes the company to additional risks, as fluctuations in the market prices of its holdings could prevent it from selling them to make money.
This may eventually change, but in the meantime, Sundial is ready to step in to address at least some of the gap between the financing cannabis businesses need and what they can actually secure.
It hasn’t even deployed the majority of its capital yet, and Sunstream Bancorp is just barely getting off the ground.
If it can continue to reliably turn its cash hoard into investment revenue and scale up its efforts, it will become a totally different — and better — company than the clunky cultivator that it has been.