June 13, 2019
Torsten Kuenzlen
Chief Executive Officer
Sundial Growers Inc.
#200, 919 11 Avenue SW
Calgary, AB
Canada T2R 1P3
Re: Sundial Growers Inc.
Amendment No. 1 to Draft Registration Statement on Form F-1
Submitted June 7, 2019
CIK No. 0001766600
Dear Mr. Kuenzlen:
We have reviewed your amended draft registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments. Unless we note otherwise, our references to prior comments are to
comments in our
May 23, 2019 letter.
Amendment No. 1 to Draft Registration Statement on Form F-1
Prospectus Summary
Our Approach
Heal, page 4
1. We note your response to comment 6 and your revised disclosure on page 5
that Pathway
Rx submitted "provisional patent applications" for 18 cannabis strains
and for a process to
analyze molecular profiles of a particular disease or patient. Please
provide a brief
description of how a "provisional" patent application differs from a
patent application here
or in your Regulation section, and disclose where you have submitted
these provisional
Torsten Kuenzlen
FirstName LastNameTorsten Kuenzlen
Sundial Growers Inc.
Comapany NameSundial Growers Inc.
June 13, 2019
June 13, 2019 Page 2
Page 2
FirstName LastName
patent applications. In addition, we note your disclosure that Pathway
Rx has developed
cannabis strains "targeted towards symptoms associated with cancer,
skin disorders, skin
protection and rejuvenation, and inflammatory processes." Please
disclose whether you or
Pathway Rx have conducted preclinical studies of these strains, and,
if material to your
business, please revise your business section to describe these
studies as well as
the timeline of when you or Pathway Rx plan to submit any potential
drug candidates to
any regulatory body for approval. In this regard, we note your revised
disclosure on page
2 that you intend to become a global leader in medical cannabis.
Acquisition of Interest in Pathway Rx, page 9
2. We note your response to comment 9. Please provide quantitative
information regarding
the "percentage of net revenues received by the Company from the sale
of certain of the
licensed products or the use of certain of the licensed intellectual
property" that you
discuss in part (iii) of the second paragraph in the "Acquisition of
Interest in Pathway Rx"
section of your prospectus summary.
Business
Our Approach
Help, page 101
3. We note your revised disclosure on page 102 that you intend to
transition the Homestead
Facility to hemp cultivation by the end of the third quarter of 2019
and that you plan to
apply for licenses for the other facilities following the acquisition.
However, on pages
110 to 111, you state that you are still evaluating the timing for
transitioning the Clay
Lake Facility and the Horseshoe Facility for the cultivation of hemp.
Please revise your
disclosure on pages 4 and 102 of your prospectus summary to clarify
that you do not yet
have a timetable for transitioning the Clay Lake Facility and the
Horseshoe Facility for the
cultivation of hemp.
Our Growth Strategies, page 104
4. We note your response to comment 16. Please disclose an estimate of
when you will have
the capacity to export medical cannabis from Canada as well as the
markets you intend to
supply with medical cannabis. In addition, please disclose when you
intend to apply for a
license in the United Kingdom to produce medical cannabis and when you
intend to begin
to produce medical cannabis in the United Kingdom.
Our Brands and Products
Our Play Brands and Products, page 107
5. We note your revised disclosure on page 108 in response to comment 17.
Please disclose
the types of cannabis plants you intend to use for your Help products,
including the
cannabinoid profile of these plants. In addition, please disclose the
legal significance of
the THC and CBD levels of these plants.
Torsten Kuenzlen
FirstName LastNameTorsten Kuenzlen
Sundial Growers Inc.
Comapany NameSundial Growers Inc.
June 13, 2019
Page 3
June 13, 2019 Page 3
FirstName LastName
Regulation
Regulatory Framework in Canada
Drug Approval Process, page 117
6. Please describe the steps necessary to obtain approval for a drug
candidate. For example,
describe the preclinical and clinical stages necessary for a company
to complete before the
drug may be marketed in Canada or in any other jurisdiction you plan
on selling medical
cannabis.
Certain Relationships and Related Party Transactions
Interests of Management and Others in Material Transactions, page 148
7. We note your disclosure on page 149 that you are in the process of
negotiating a new
professional services agreement with AppColony Inc. Please tell us
whether you plan to
enter into this agreement prior to the effectiveness of your
registration statement, and, if
you do, please describe the material terms of the agreement and file
it as an exhibit to your
registration statement.
Sundial Growers, Inc.
Notes to the Interim Consolidated Financial Statements
15. Share-based compensation, page F-20
8. You state on page F-20 that during the three months ended March 31,
2019 you granted
330,000 performance warrants whereas your disclosure on page II-3
states that you
granted 25,000 performance warrants. Please reconcile the
inconsistency within the
filing.
Sundial Growers, Inc.
Consolidated Statements of Financial Position, page F-31
9. Please refer to your response to our previous comment 22. Please tell
us why you did not
identify February 28, 2018 as restated.
Consolidated Statements of Cash Flows, page F-71
10. Please revise the disclosure on page F-71 to separately disclose the
change in fair value of
biological assets and inventory as previously requested in prior
comment number 24.
Torsten Kuenzlen
Sundial Growers Inc.
June 13, 2019
Page 4
You may contact Keira Nakada at 202-551-3659 or Mary Mast at
202-551-3613 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Sonia Bednarowski at 202-551-3666 or Dietrich King at 202-551-8071 with
any other
questions.
FirstName LastNameTorsten Kuenzlen Sincerely,
Comapany NameSundial Growers Inc.
Division of Corporation
Finance
June 13, 2019 Page 4 Office of Healthcare &
Insurance
FirstName LastName