Shares of Sundial Growers (SNDL -3.42%) were soaring 16.1% higher as of 11:18 a.m. ET on Monday. The Canadian cannabis producer didn't announce any news that would serve as a catalyst.
However, Sundial is scheduled to report its first-quarter results after the market close today. The big gain appears to reflect investors scrambling to jump aboard before those results are announced.
No outside investor should legally know what Sundial will report in its Q1 update. No insider who does know what the company will say can legally trade the marijuana stock. Barring any illegal activity, therefore, investors who are buying Sundial today are probably doing so based on their positive expectations related to the company's announcement.
There are some reasons for optimism. For example, Sundial Growers CEO Zach George stated in the company's Q4 update, "We are beginning to see positive momentum across all of our key operating segments and remain committed to our goal of becoming free cash flow positive within the 2022 calendar year." Also, Sundial acquired Alcanna on March 31, 2022.
Neither of these factors will impact Sundial's Q1 performance. However, they could mean the company's full-year outlook will be better than expected.
Delta 9 Cannabis' Q1 results announced before the market open today could provide a hint about what Sundial will report. Delta 9 CEO John Arbuthnot acknowledged "supply chain issues and overall weakness in the Canadian cannabis market" impacted his company during Q1. However, he said that management remains "bullish that the remainder of 2022 looks to be a promising year." Sundial invested $10 million in Delta 9 during the first quarter through a convertible debenture.
Investors will have to wait a few hours for Sundial to report its Q1 results. What the company says about expectations for the Canadian cannabis market through the rest of the year will be even more important than the numbers from the first quarter.