You may not be able to purchase cannabis from your local gas station, but that hasn’t stopped the international convenience store chain Alimentation Couche-Tard (TSX: ATD.A ATD.B) from staking a claim in the industry. Today it was announced that the company would purchase a stake in Fire & Flower Holdings Corp. (TSXV: FAF) $25.9 million.
With over 16,000 stores in 25 countries, Fire & Flower hopes to leverage Couche-Tard’s retail footprint to help aid its own international expansion. This does not mean that company’s cannabis products will be found in a Couche-Tard convenience store anytime soon, but rather that Couche-Tard’s resources will help with growth initiatives like growing and expanding the company’s digital platform Hifyre.
“This strategic investment by Couche-Tard, one of the world’s largest retailers, is transformative for Fire & Flower,” said Fire & Flower CEO, Trevor Fencott. “The support of Couche-Tard’s world-class leadership team, coupled with their impressive international footprint which includes major markets such as the US, Mexico and Europe, provide us with outstanding opportunities for aggressive growth.”
The purchase will be made by an indirect wholly-owned subsidiary of Couche-Tard through a subscription agreement, upon which Fire & Flower will issue 24,289,706 common shares of the company at a price of $1.07 per common Share, representing a 9.9% ownership interest.
Concurrently, Couche-Tard will receive three series of common share purchase warrants. If exercised, Couche-Tard would increase its stake in the Fire & Flower to 50.1%. Couche-Tard will also be granted board nomination rights. Upon closing of the transaction, Fire & Flower will uplist to the TSX.
“Couche-Tard is excited to make this strategic investment in one of the fastest growing cannabis ‘pure-play’ retailers,” said Brian Hannasch, President and CEO of Couche-Tard. “This investment in Fire & Flower, with a path to a controlling stake, will enable us to leverage their leadership, network and advanced digital platform to accelerate our journey in this new and flourishing sector.”