Fire & Flower and Alimentation Couche-Tard Expand Strategic Relationship Through Six Additional Cannabis Retail Store Locations
Fire & Flower Holdings Corp. (“Fire & Flower” or the “Company”) (TSX: FAF) (OTCQX: FFLWF), a leading cannabis consumer retail and technology platform today announced significant advancements in its strategic relationship with Alimentation Couche-Tard Inc. (“Couche-Tard”), owner of Circle K, through license agreements to use the HifyreTM digital retail platform and Spark PerksTM member program, each proprietary to Fire & Flower’s subsidiary, Hifyre Inc. (“Hifyre”), at four additional cannabis stores co-located with Circle K and the proposed acquisition of two cannabis retail stores in Kingston, Ontario.
“We continue to demonstrate major progress on the expansion of our strategic relationship with Couche-Tard through the licensing of Hifyre’s proprietary platform and Spark PerksTM member program at four additional co-located cannabis stores and the proposed acquisition of two cannabis stores. Additionally, Couche-Tard has recently committed its financial support through the previously announced $11 million loan and $5 million private placement, subject to the receipt of shareholder approval. Having access to Circle K’s valued real estate through these co-located stores demonstrates the differentiating value of the strategic relationship with our partner, Alimentation Couche-Tard” shared Stéphane Trudel, Chief Executive Officer of Fire & Flower. “We continue to enhance a fast and convenient cannabis shopping experience with the HifyreTM technology platform and recently began the delivery of other complimentary products, including snack foods through the Firebird DeliveryTM platform.”
“Couche-Tard continues to see promise in the cannabis market and is committed to learning more about the space as it evolves both in Canada and beyond,” shared Alex Miller, Executive Vice President of Operations, North America of Alimentation Couche-Tard Inc. ” With now five co-located cannabis stores next to high-traffic Circle K stores in the Greater Toronto area, we see it as a natural extension of our expertise to pair our convenient shopping experience and differentiating store footprint with the growing customer demand for cannabis products.”
Circle K Co-Located Store License Agreements
Hifyre has entered into licensing agreements (the “Licensing Agreements”) with a wholly owned subsidiary of Couche-Tard in respect of four additional co-located stores in the cities of Guelph, Hamilton, Brampton and Oshawa, Ontario. These license agreements will expand upon the success of existing Circle K co-located cannabis stores through use of the Hifyre™ cannabis technology platform and the Spark PerksTM member program. With the execution of these Licensing Agreements, there will be 7 Circle K co-located cannabis stores operating either under Fire & Flower corporate or technology licensing business models in the Provinces of Alberta and Ontario.
The new co-located stores subject to the Licensing Agreements are located at the following locations and are anticipated to open within the coming weeks.
10010 McLaughlin Rd., Brampton, Ontario
138 College Ave. W., Guelph, Ontario
1311 Harmony Rd. N., Oshawa, Ontario
648 King St. W., Hamilton, Ontario
Fire & Flower continues to pursue additional opportunities to expand its Circle K co-located store program.
Purchase Agreement of Two Cannabis Stores
Additionally, the Company announced that it has entered into an Asset Purchase Agreement (the “Purchase Agreement”) to acquire two cannabis retail store locations in Kingston, Ontario from a wholly-owned subsidiary of Couche-Tard. (the “Kingston Acquisition”)
The stores are anticipated to open as Fire & Flower owned, operated and branded stores in the fourth quarter of this year and are located at:
500 Gardiners Road, Kingston, Ontario
1100 Princess Street, Kingston, Ontario
Pursuant to the terms of the Purchase Agreement, Fire & Flower will issue to an affiliate of Couche-Tard 804,548 common shares and up to an additional 804,548 common shares upon achievement of certain performance metrics. Closing of the Kingston Acquisition is subject to the closing conditions set forth in the Purchase Agreement, including but not limited to, the receipt of regulatory approval from the Alcohol and Gaming Commission of Ontario. The Toronto Stock Exchange has conditionally approved the Kingston Acquisition.
Related Party Transaction
Couche-Tard holds greater than 10% of the outstanding voting securities of the Company. As such, the Kingston Acquisition constitutes a related-party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company has relied on the exemption from the formal valuation requirement of MI 61-101 contained in section 5.5(a) of MI 61-101 and on the exemption from the minority shareholder approval requirements of MI 61-101 contained in section 5.7(1)(a) of MI 61-101 as the fair market value of the subject matter of the Kingston Acquisition does not exceed 25% of the Company’s market capitalization.
About Fire & Flower
Fire & Flower is a cannabis consumer retail and technology platform with more than 90 corporate-owned stores in its network. The Company leverages its wholly-owned technology development subsidiary, Hifyre Inc., to continually advance its proprietary retail operations model while also providing additional independent high-margin revenue streams. Fire & Flower guides consumers through the complex world of cannabis through best-in-class retailing while the HifyreTM digital and analytics platform empowers retailers to optimize their connections with consumers. The Company’s leadership team combines extensive experience in the technology, cannabis and retail industries.
Through the strategic investment of Alimentation Couche-Tard Inc. (owner of Circle K convenience stores), the Company has set its sights on global expansion as new cannabis markets emerge and is poised to expand into the United States when permitted through its strategic licensing agreement with Fire & Flower U.S. Holdings upon the occurrence of certain changes to the cannabis regulatory regime.
To learn more about Fire & Flower, visit www.fireandflower.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws (“forward-looking statements”). All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “outlook”, “expect”, “project” and similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions “may” or “will” occur. These statements are only predictions.
Forward-looking statements are based on the opinions and estimates of management of Fire & Flower at the date the statements are made based on information then available to Fire & Flower. Various factors and assumptions are applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Forward-looking statements are subject to and involve a number of known and unknown, variables, risks and uncertainties, many of which are beyond the control of Fire & Flower, which may cause Fire & Flower’s actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors, among other things, include: final regulatory and other approvals or consents; fluctuations in general macroeconomic conditions; fluctuations in securities markets; the impact of the COVID-19 pandemic; the ability of the Company to successfully achieve its business objectives, political and social uncertainties, demand for the Company’s common shares, and market conditions.
No assurance can be given that the expectations reflected in forward-looking statements will prove to be correct. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. Additional information regarding risks and uncertainties relating to the Company’s business are contained under the headings “Risk Factors” in the Company’s Annual Information Form dated April 26, 2022 and “Risks and Uncertainties” in the management discussion and analysis for the thirteen weeks ended July 30, 2022 filed on its issuer profile on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
SOURCE Fire & Flower Holdings Corp.
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