Ms. Stephane Trudel reports
FIRE & FLOWER AND ALIMENTATION COUCHE-TARD EXPAND STRATEGIC RELATIONSHIP THROUGH SIX ADDITIONAL CANNABIS RETAIL STORE LOCATIONS
Fire & Flower Holdings Corp. has furthered its relationship with Alimentation Couche-Tard Inc., owner of Circle K, through: licence agreements to use the Hifyre digital retail platform and Spark Perks member program, each proprietary to Fire & Flower's subsidiary, Hifyre Inc., at four additional cannabis stores co-located with Circle K; and the proposed acquisition of two cannabis retail stores in Kingston, Ont.
"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 Perks 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 Stephane Trudel, chief executive officer of Fire & Flower. "We continue to enhance a fast and convenient cannabis shopping experience with the Hifyre technology platform and recently began the delivery of other complimentary products, including snack foods through the Firebird Delivery 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 licence agreements
Hifyre has entered into 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, Ont. 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 Perks member program. With the execution of these licensing agreements, there will be seven 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, Ont.;
138 College Ave. W., Guelph, Ont.;
1311 Harmony Rd. N., Oshawa, Ont.;
648 King St. W., Hamilton, Ont.
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 to acquire two cannabis retail store locations in Kingston, Ont., from a wholly owned subsidiary of Couche-Tard.
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 Rd., Kingston, Ont.;
1100 Princess St., Kingston, Ont.
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 per cent 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 per cent 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, 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 Hifyre 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 (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.
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