Inside SNDL’s Hidden Scale: Global Reach & Supply Chain Powerhouse ft. Tyler Robson

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Tyler Robson: I don't think very many people know our US exposure. I don't know if they know we're the largest liquor retailer in Canada. I don't know if they know we're one of the largest cannabis retailers in the country. And then there's our international exposure. I think the way to really look at it is, yeah, we do have branded product, but we're making branded product for every single top-tier LP in Canada. There's not a single name you can mention that SNDL isn't manufacturing for. So you may see a brand you love — odds are, at some point, we touched the product going in that bag. Bryan Fields: What's up guys, welcome back to another episode of The Dime. I'm Bryan Fields. With me as always is Kellan Finney, and this week we've got a very special guest, Tyler Robson, President of Sundial. Tyler, thanks for taking the time. How are you doing today? Tyler Robson: Yeah, really well, thank you. How are you guys doing? Bryan Fields: Doing well. Excited to have you here. Kellan, how are you doing? Kellan Finney: Doing well, really grateful for the opportunity to talk to Tyler and dive into Sundial. How are you doing, Bryan? Bryan Fields: Yeah, I'm stoked. I'm excited to get the pieces of the puzzle pulled out a bit because it seems pretty complex — maybe intentional, maybe not — but I'm trying to understand what Tyler's day-to-day is like and what makes Sundial a little different under the surface. Before we get into all the fun stuff, Tyler, can you give a quick background on yourself and how you found your way to the cannabis space? Tyler Robson: Yeah, totally. If you guys figure out what my day looks like ahead of time, please let me know, because I'm still trying to figure out which way's up. But look, appreciate you having me. My background is basically in cannabis. I started in the early days of Colorado, which very few people know about. Long story short, I ended up being one of the largest cultivators in the state — 156,000 square feet of indoor grow, 96,000 square feet of cultivation, the largest retail footprint, and the largest medical infused products platform. I eventually divested of that, moved back to Canada to start the Valens Company. Quick tidbit on Valens — it actually became the world's largest cannabis manufacturing and derivatives company. Think edibles, vapes, pre-rolls, anything you could think of. Eventually, a decade later, we merged that into Sundial. So I'd say all things cannabis is kind of who I am. Bryan Fields: Let's start with the extraction piece. How did that get started, and what was the focus? Was there something specific that caught your attention that made you think there was an opportunity there? Tyler Robson: Totally. I'd say the thing I learned in Colorado is everything commoditized a lot quicker than anyone wanted to admit. When you look at the early stages of Colorado, going back to 2009, every cultivator had a heyday. Then once commoditization hit, you couldn't move product if your life depended on it, because brand started to matter. But eventually what we learned is that defensible platforms of manufacturing, where very few people had IP, really stood out. So I took my learnings from Colorado — a 5 million population state — back to Canada, where we have 40 million, and then put it on a global stage. Bryan Fields: Totally makes sense. And that's not as easy as you just articulated — the extraction process is super complex, people's expectations, margins, understanding the data inputs. Take us through how you put those pieces together, because I think there are learnings there in Sundial's transition. Tyler Robson: Yeah, totally. I think extraction — even manufacturing as a whole — nobody really understands, including myself. When I got into it, I had no idea what I was doing, and I probably made more mistakes early than anybody. That's how I learned. Depending on the type of product you want, there's a different extraction method to get there — you look at CO2, alcohol, hydrocarbon, terpene extraction. Depending on what you're trying to accomplish, putting the end consumer first is really how you understand what you're doing. We were the only platform in North America that offered five different types of manufacturing via extraction, so we could make basically any product, and do it better and cheaper than anybody else, because we bypassed a lot of the infrastructure some of our competitors were chasing. Bryan Fields: And one of those operational efficiencies was ultimately part of the interest behind the Sundial acquisition when that happened? Tyler Robson: Yeah, exactly. When you look at what Zach was doing — Zach George, the CEO of Sundial — he actually chased Valens and myself for over two years because of our positioning in the market. In the first couple of conversations, I said there's no chance I'm joining this platform, because we had a tiger by the tail, for lack of a better term. But eventually I saw what he was up to and the platform he was building, and we found a way to bring the two companies together. Bryan Fields: That integration process, though — how does that work? You've got a really skilled supply chain operation, now integrating inside. Is there an audit or analysis process? What are the expectations there when you say, "we're bringing this over"? How does that merger come together? Tyler Robson: Yeah, integration is tough. But when you look at the opportunity to reset the strategy, reset the people, and put the best players on the field, it was actually a ton of fun. We felt some pain — we laid off 2,000 people, closed numerous facilities, upset the apple cart strategy-wise — but two or three years later, you look at what we did, and it was really meaningful, and it put us on a trajectory that I don't think too many people understand. Bryan Fields: Those are the hard parts, right? Early on, bringing two companies together, one plus one shouldn't equal two — it should equal three or four. That's the internal expectation. But it means making hard decisions and resetting the deck to shed excess and position for long-term success. So let's talk about Sundial. Can you give us a quick sense of the size of the operations and where you guys operate? Tyler Robson: Yeah, totally. It's way bigger than anyone understands. When we brought Valens and Sundial together, everyone thought one plus one should equal three — it was more like starting at four or five, because before I even joined, they had bought the largest liquor retailer in Canada, they had US exposure, they'd raised over a billion dollars, and they had global operations in the UK. So Sundial in a nutshell: Canada's largest liquor retailer, Canada's third-largest cannabis retailer, Canada's largest cannabis manufacturing and derivatives business, and we have 400,000 square feet of indoor cultivation in Canada. We have global exposure in Europe — we're distributing in Poland, the UK, Israel, Germany, and Australia — and exposure to several US states. The two biggest opportunities to double down on would be one of the three licenses in Texas, and everyone's talking about what's going on with hemp in Texas today, and we're a top-five operator in Florida under the banner Parallel. Bryan Fields: So, President of Canada — how do you spend your time? Is it constant firefighting, or is there a strategy and roadmap you're working through, given how many countries you're covering at once? Tyler Robson: Trying to figure out what time zone I'm on is easier said than done. I'd say firefighting is probably the best way to describe it, but I'm having a ton of fun doing it. When I wake up every day, I try to solve three problems — you can't climb Everest — so I ask what the three biggest issues are for our collective global business and I try to solve those. I like to think I make very few decisions, but extremely impactful ones. It's anything from federal legislation changing in Canada, to pilot programs in Germany, to Canada being upside down. It's complicated, but I couldn't imagine doing anything else. Kellan Finney: How much does your approach change based on the geographic region where the fire is? Tyler Robson: Depending on the economic side of the problem, probably vastly. Germany versus the US today are very different markets, very different problems. So depending on the day, it could be a plethora of issues I'm diving into. To be frank, no one phones me with good news — that's one thing nobody understands. If it's going well, I don't hear about it. So when my phone rings, I feel a little panic. Bryan Fields: That's tough too, because when the phone rings from someone you haven't heard from in a while, you know there's a problem and they need you. So from an informational standpoint, with so much being pinged at you, how do you prioritize and distill everything since you were last updated to make quick decisions? Tyler Robson: Data — the way I look at it is men lie, women lie, numbers don't. If you have the right data set and you're unemotional about your decisions, it comes pretty straightforward. I'd like to think I'm pretty decisive, but also willing to pivot quickly. Decide quick, pivot quick if something's wrong, and don't be emotionally invested in anything — you're going to be wrong more than you're right, so it's about how quickly you can pivot. Bryan Fields: Have you built systems internally to aggregate the data into a single platform, or use various tools, built in-house? Tyler Robson: Depending on the country, very different data sets. We've invested in data and people, and surrounded ourselves with a ton of smart people, some significantly smarter than I am, and you really need to bet on those people and support them however possible. Bryan Fields: How granular are the details when people bring you a problem? Given your position across all these countries, have you set it up so decisions one through ten are handled by the team, and it only escalates to you at level eleven? Tyler Robson: Yeah, that's exactly right. We have a thing at SNDL called the Five Whys — why did this happen, what did you do, how did you go about it, why did this outcome occur. If you ask why five times, you get to the root of most problems. When you teach people that methodology, they're actually pretty good at solving the outcome — it's about getting them to go deep enough to find the source of the fire, because people tend to just firefight. Bypassing firefighting and going directly to the source is a skill that's understated in this industry. Bryan Fields: Can you give us a specific example? Tyler Robson: I could, but I probably shouldn't. [laughter] Bryan Fields: That's fair. But it seemed like you were describing a mindset where, once a problem is faced in extraction or cultivation, you don't want the team to face it again — so if that means investing in technology or automation, you carve out budget to solve it going forward. Tyler Robson: Totally. Take demand planning as an example. When you're doing a new product launch in any country — take the UK — you think X will happen, and then Y happens. Why did that occur? We demand-planned wrong. Why did we demand plan wrong? We were a little optimistic on the product launch. Why were we optimistic? Because the potency was off. Why was the potency off? Because we didn't buy the right lot. When you keep asking why something failed, you can correct it in future launches. Bryan Fields: 100%. In the different countries you operate in, can you give a high-level breakdown — is it vertical, is it cultivation? Just so people understand the different variables you're juggling. Tyler Robson: Every country is different, every opportunity is different. High level: in Germany, every product other than whole flower is banned. In Denmark, every product is allowed other than whole flower. In the UK, every product format is allowed — vapes, edibles, beverages, nothing's off. In the US, we're only a retailer in Michigan, but in Florida we're forced vertical integration — medical infused products, cultivation, retail, manufacturing, everything. So every operation we have is completely unique. Is it perfect? Absolutely not — we need federal legalization in the US, and some of these other countries need to work out bugs as pilot programs roll through. But in time it'll be a very concise strategy. For now, we roll with the punches. Bryan Fields: Are you guys able to manage one singular supply chain into Europe and distribute from a single source, or does the UK need its own supply chain, Germany its own, based on regulations? Tyler Robson: There are some nuances. The UK on flower acts similar to Germany, so you can land it in the UK and then sell into Germany. But each one has its own nuances — potency requirements, for example. In Israel, you can have between 24 and 28% THC, you can't move off those ranges. In the UK, unless it's 30% THC today, it's not really selling. Bryan Fields: So the facilities are different too — you grow in different places? Tyler Robson: Exactly — different facilities, different partnerships, different brands, different format sizes, different product offerings. Everything you can think of. Bryan Fields: So how do you unlock operational efficiencies to position Sundial as such an efficient company given all those moving variables? How do you take the learnings and put the puzzle pieces together to make a specific combination successful? Tyler Robson: Focus. Fewer, bigger, better. A lot of people don't realize we're the largest purchaser of biomass in the world — we actually procure a lot of what we sell. We didn't want to try to grow everything; we don't have mega greenhouses like some of our peers. In Canada we have a procurement strategy, whereas in Florida we're cultivating because it's forced vertical integration. Less is more — really focus on your core competencies and double down on those. Bryan Fields: Would you say extraction is a core competency? Tyler Robson: Totally. But cultivating is not. Bryan Fields: Sure. Tyler Robson: So extraction and manufacturing is where we're strongest, and I think we put better products in the market than most of our competitors. We will win vapes, edibles, pre-rolls. You'll never see SNDL win flower. You'll never see SNDL win beverage. Bryan Fields: Is the win in extraction based on technology, operations, data throughput — where specifically can others not compete? Tyler Robson: All of the above, and frankly, economies of scale. We have the largest extraction platform in the world. We can produce a kilo of extract cheaper than anybody else. Some people may go after a premium segment, but on the volume game, where 80% of the revenue is, no one can touch us. Bryan Fields: And that helps drive high-margin products throughout the process — you buy the input biomass, process it through the facility, recognize your costs, and push it downstream. Tyler Robson: Exactly. A good way to look at it is we can build a Ford F-150 on any derivative product better than anybody else. If you're asking us to be a Ferrari, we're going to fail. But no one can produce F-150s better than we can. Bryan Fields: What's the biggest challenge your team is still struggling to solve? A lot of entrepreneurs listen to this podcast — is there a product out there that would be really beneficial for you? Tyler Robson: Maybe not a product — I'd say strategy. Everybody still gets distracted by shiny objects, and it's hard to stay focused. It's ugly, it's boring, everyone wants to launch a new brand or innovative product, but your bread and butter is really what wins. Going back to the strategy — less is more. We stay focused, and I wish some of our newer peers would do the same. It's easy to get distracted by France coming online, or Italy talking about legalizing — people think we need a new brand, or this product will do great in two years — but we don't want to be first, we want to be best, and staying focused on our core competencies is how we win. Bryan Fields: Is there a decision tree internally to vet those ideas, since a two-year process means combing through many ideas early to find the ones worth investing in? Tyler Robson: You hit it spot on — we say no more than we say yes. Deciding to swing at a pitch is like baseball — we won't swing at every pitch, but when we see one we like, we swing for the fences. Bryan Fields: What don't most people know about Sundial? Tyler Robson: I don't think people know anything, to be frank. I don't think very many people know our US exposure, or that we're the largest liquor retailer in Canada, or one of the largest cannabis retailers in the country — plus our international exposure. We do have branded product, but we're making branded product for every single top-tier LP in Canada — there's not a single name you can mention that SNDL isn't manufacturing for. So you may see a brand you love, and odds are at some point we touched the product going into that bag — beverages, chocolates, gummies, vapes. I can't tell you who we manufacture for, but there's definitely not a name in the top 10 we don't work with. Bryan Fields: I love it. Let's talk about the US — Texas, Florida, any other states, and why specifically those two? Tyler Robson: Florida's forced vertical integration, it's a massive market, and there's a bit of a defensive moat — not everyone can enter that market. I really like that. And Texas — when you look at the untapped US market, what big-population state hasn't gone recreational yet, Texas is it. We're patiently waiting for that to fold, which we all know is coming — it's a matter of when, not if. We're also in Massachusetts and Michigan, but we've decoupled our strategy by state. In Michigan we're strictly retail — we found a way to win there and we're doing exceptionally well, staying to our core competency. You'll see us enter different states, but we're really waiting for federal legalization, and your guess is as good as mine on when that happens. Bryan Fields: I won't put you on the record for the impossible question, but it seems like in Michigan you had a thesis, realized it wasn't working, and pivoted to retail where you knew you could win, while keeping exposure for Texas. Everyone's excited there and the numbers are going to be staggering — we can already see what the hemp industry is doing down there. How does that play into your strategic workflow? With all the moving variables plus the hemp news, is it more of an active push, or a defensive approach where you say, "here's how we think we'll play it over the next six to ten months"? Tyler Robson: You probably won't like my answer — it's a bit of both. We're trying to control what we can control in Texas legislation. Are we lobbying? Yes. Are we hopeful it'll go? Yes. Can we control the outcome? No. We've written papers, sat with regulators, done everything we could, but we're waiting to see how the legislation folds and we'll be ready to maneuver. We're hopeful, especially with manufactured products — we think vape will be a huge volume mover there, so we're positioning for that, but waiting and seeing. Bryan Fields: From a resource-planning perspective, do you have a number earmarked, and how do you balance rapid change with potentially having to deploy resources quickly? Tyler Robson: That's basically right. We're extremely flexible and nimble. You never want to overspend waiting on a "what if," because you never know when it'll happen. We've kept the lights on, done the bare minimum, with people focused on other markets — helping out in Florida, helping out in Massachusetts — but as soon as that switch flips, we'll go full blitz in Texas. Bryan Fields: Is there an internal thought process around leading with the processing/manufacturing side in Texas — setting up operations and supply chain around buying biomass, because that's where you dominate? Tyler Robson: Totally, and I could tell you my strategy, but I probably won't. You're right though — where we'll be strong is manufacturing and derivatives. You won't see us be a massive cultivator; other players will do significantly better than us there. It comes back to our core competencies. Bryan Fields: You don't have to tell us the plan, but it's clear — this is what you do well, so you'll stick with it. A massive switch to cultivation would be very surprising. Tyler Robson: Totally. I'm pretty boring — I don't think you'll see anything exciting from us other than the ability to execute. Bryan Fields: Are there consistent internal pushes to keep improving manufacturing — where can we invest more, where can we push margins — or do you feel like you've nailed it? Tyler Robson: Definitely not, we're never satisfied and we continue to push the bar. New technologies and processes come out every year. I'd call it the 80/20 rule — 80% of what we do is proven, 20% we're trying different things to push the industry forward. We've had some success and some failures, but you can't hit a home run on every pitch. Bryan Fields: Are you looking outside the industry — oil and gas, chemical manufacturing — for inspiration, since cannabis manufacturing shares nuances with other industries? Tyler Robson: Yeah, we've looked at manufacturing equipment, IP, and different processes from other industries. Some we've been able to maneuver into cannabis, some we've had to go net new. We're bringing on a new extraction line — we looked at every ancillary business in the world and couldn't find anything that does exactly what we're trying to do. So some of it's net new, and our engineers probably hate us for pushing the envelope, but some people get excited about doing something different. Bryan Fields: At the end of the day, if you've got a bottleneck to unlock, you either look outside or push innovation internally, and those engineers are probably excited to fight the problem. Any more details you can share? Tyler Robson: It'll be the largest throughput in global cannabis — I'll leave it as a tease. Bryan Fields: What about the liquor sales — explain the benefits and how that fits into the overall portfolio. Tyler Robson: There's a ton of synergy between the two, especially in the Canadian market. We both sell into the same provincial boards — same buying group, same regulatory body, whether it's liquor or cannabis. Liquor is declining globally, but it's still a massive business — alcohol is so ingrained in our communities, it's not going anywhere. The liquor team, which I don't touch, is doing a phenomenal job keeping that business afloat and moving the needle forward while a lot of others are retracing. Bryan Fields: Is it also a diversification play with synergistic benefits? Tyler Robson: Totally — it's insulated too. Cannabis has been so volatile over the last decade; having a steady-Eddie business like liquor provides stability, helps recruit talent, since cannabis is still an unknown that some love and some hate. A multi-business segment adds a ton of stability. Bryan Fields: Definitely, and we've seen other operators try similar concepts, but this feels closer in appeal to what's actually happening — regulatory, product, shipping, logistics all tied to liquor in Canada, so it made sense for them to move that way. Is there any possibility of co-mingling liquor and cannabis in the future? Tyler Robson: We're pushing for it, and I think one day it'll happen. Consumption in Canada will eventually be in convenience stores, eventually in grocery stores, on-premise where you can go to the Keg, Earl's, or Joey's and consume there. We're a bit slower in Canada with regulatory reform — I was at a panel recently where a member of parliament said, "it's only been seven years since we rolled this out, we need more time." I said, well, it's one way to look at it — it's only been seven years, or it's already been seven years — we need meaningful change to really push the industry. But I think the two will eventually coexist. Bryan Fields: Just laying it out, it seems logical — though in this industry things don't always operate that way. But it at least seems worth considering. Tyler Robson: Totally, especially given tariffs between Canada and the US. If Canada really wanted to move the needle and drive the industry forward, it's an easy layup that costs them nothing and would meaningfully help revenue and economic growth. I think you'll see it. Bryan Fields: When you say things like that, it seems so practical — people should sit down and consider it — and yet it never seems to materialize. That must be frustrating. Tyler Robson: It's frustrating, but I try not to get frustrated over things I can't control. There are wins to be had on both sides of the border, but this industry isn't for everybody, and in ten years it's going to look very different. I try not to get caught up in the minute details. Bryan Fields: Are there any countries internationally that you think people are sleeping on? Tyler Robson: A ton, honestly. Even Germany — the size of that market and how quickly it's grown — people are sleeping on it; it's going to be a massive international player. Thailand is turning out a lot of cannabis today. South America will eventually come online too — you look at bananas or avocados or any agricultural crop, and no offense to Canada, but ten years from now we're probably still not cultivating much. I don't see avocados popping up here anytime soon. So there are a few markets that will emerge as global leaders in time. Bryan Fields: Is part of your role keeping your ear to the ground on those markets, so that if things move, your team's already got a roadmap — like, by 2027 we want to be ready for X? Tyler Robson: Without a doubt, that's part of our strategy. What is Canada known for cultivating? Really, nothing. That's why we've gone asset-light on cultivation here and doubled down on manufacturing and derivatives, because in time we'll buy feedstock from different countries, without a doubt. Bryan Fields: How much time do you guys spend on formulation versus technology innovation in R&D? Tyler Robson: Too much — significantly too much. I think formulation and R&D is probably the one thing that could really move the needle. People should spend more time on formulation. When you look at vapes, for example, what's the mouth appeal in a vape today? I don't think anyone's hit that head-on. Look at what Juul did in the US — they perfected it. No one in cannabis has done that yet. There's a ton of innovation in formulation still to come. Bryan Fields: Why do you think people don't do that now? Tyler Robson: Because it's still not federally legal in the US, there aren't big marketing dollars behind it, and in these fragmented state markets, no single state is big enough to warrant hundreds of millions of dollars of investment. But when it folds federally, you'll see it come. Bryan Fields: Are there outside conversations with big alcohol or tobacco companies about future partnerships? Tyler Robson: Cannabis is a growth opportunity, and some of these other businesses — tobacco, alcohol — are fairly stagnant, not showing much growth. Given the big infrastructure they've built, everyone will be looking at cannabis, I'd say. Bryan Fields: The reason I bring that up is thinking through the business plan — this is what we do well, this is what we don't, so we focus operations here, plus geographically there are opportunities that are advantageous for a larger player looking for a partnership. I know you can't detail those conversations, but it's a real dynamic. What question do you wish more people asked you? Tyler Robson: Honestly, I'm not sure — I get asked everything under the sun, even things like, why am I still here? I'm the longest-standing cannabis executive in Canada, and people ask why. Honestly, it's the opportunity — the opportunity to be a global player. In Canada we've had very few opportunities to lead a global movement, and that's what keeps me motivated. Look at our cash position and the opportunity — that's all you can ask for, the opportunity to try. We're a top-three global operator by consolidated revenue. I don't know what's more exciting than that. Bryan Fields: Is it hard to digest how long you've been in the industry, thinking through all the iterative changes over your career? Tyler Robson: Day by day it feels like nothing's changed, but looking back a year, five years, ten years, it's like, what the hell's gone on — it feels like a dream at some point. It's been a ton of fun, and I can't imagine another industry that changes as rapidly as this one. It's been a wild ride over the last twelve, fifteen years. Bryan Fields: What's one blind spot the industry is ignoring? Tyler Robson: The size of the opportunity. I don't think people realize how big this will be. German revenue today, even though it's still strictly medical, has surpassed every expectation — they've now imported 200 metric tons of cannabis and are still trying to find more. I don't think people understand how big the global cannabis industry is really going to be. Bryan Fields: How much time do you guys spend researching waste streams and the potential commodity chemicals derived from the extraction process in general? Tyler Robson: A lot. That's what makes petroleum so powerful — it's paints, roads, everything derived from petroleum. Cannabis potentially has a similar opportunity, where all these different chemicals in the plant could feed commodity streams. Bryan Fields: Totally. Tyler Robson: A ton of focus is going there. Unfortunately, federal legality stops it from growing into different industries — even the hemp industry is limited today — but without a doubt, it's headed there. Bryan Fields: Are there any US strategic partnerships you're looking for — someone listening who thinks there might be synergy, whether brands or extraction operations? Is there anything specific you're looking for where alignment could be beneficial? Tyler Robson: We're already working with some US parties I can't disclose due to NDAs. We're always open for business and looking for new partnerships. The biggest thing we're probably open to right now is global distribution. Some of these big companies have been doing it for a hundred years and have very sound supply chains — that's something we need to double down on and really learn, because as you add multi-country distribution platforms, you really need to button down your systems. Bryan Fields: Last question — what's the most impactful book you've ever read? Tyler Robson: Good to Great, without a doubt. Bryan Fields: Perfect. Tyler, for our listeners who want to get in touch and learn more, where can they find you? Tyler Robson: You can find me on LinkedIn, on our website, and I'm a pretty easy guy to find, considering you guys found me up in Canada. But yeah, I'm around. Bryan Fields: Thanks for taking the time — this was a lot of fun. Appreciate it. Tyler Robson: Yeah, I really appreciate it. Thanks so much.