The Globe and Mail reports in its Wednesday, June 7, edition that Fire & Flower Holdings has filed for creditor protection. The Globe's Irene Galea writes that Fire & Flower operates 91 stores across Canada and employs 774 people. It has applied for protection under the Companies' Creditors Arrangement Act, and obtained a $9.8-million debtor-in-possession loan from an existing stakeholder, a subsidiary of Alimentation Couche-Tard, to pay off current liabilities while it attempts to restructure.
Fire & Flower's CCAA filing is the latest in a series of major cannabis industry setbacks, including layoffs and bankruptcy claims, as companies fight to attract customers in an oversupplied market and struggle to raise capital to pay back debt.
Of all the bankruptcy claims through CCAA last year, 40 per cent were by companies in the cannabis industry, said lawyer Ranjeev Dhillon.
Cannabis Council of Canada president George Smitherman says, "After five years in a sector where there has been no return for investors, these kinds of events should come as no surprise." Fire & Flower chief executive officer Stephane Trudel says the company has been operating at a loss since 2018.
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