Fire & Flower Has Sights Set On NASDAQ

Fire & Flower Holdings Corp. (OTCQX: FFLWF) announced its financial and operational results for the fiscal year and quarter ending January 30, 2021. In the fourth fiscal quarter, Fire & Flower reported total revenue of $43.2 million versus revenue of $16.8 million for the fourth quarter of 2019. It was an increase in revenue of 30.5% and an increase of 42.8% in total gross profit dollars compared to the third quarter of 2020.

The company said that it was the second consecutive quarter of positive Adjusted EBITDA of $1.5 million as compared to $1.2 million of positive Adjusted EBITDA in the third quarter of 2020 and negative Adjusted EBITDA loss of $5.26 million for the fourth quarter of 2019. The net loss for the quarter was $11.4 million a decline of 49% from last year’s net loss of $22 million.

Full Fiscal Year 2020

For the fiscal year ended January 30, 2021, Fire & Flower delivered revenue of $128.1 million including sales of $101.5 million in the Retail Platform, $20.3 million in the Distribution Platform, and sales of $6.3 million in the Digital Retail and Analytics Platform. The company achieved a positive Adjusted EBITDA of $0.02 million for the fiscal year 2020. For the 2020 fiscal year, the company recorded a net comprehensive loss of $79.0 million, or net loss per share, and on a fully diluted basis of $0.45. The net comprehensive loss incurred during the year largely due to non-operating charges including debt extinguishment and finance costs, offset by a gain on revaluation of derivative liabilities, as well as operating losses as the Company continues to invest in the expansion of its business lines including the acquisition of Friendly Stranger Holdings Corp.

“While 2020 was a challenging year due to the pandemic, it was also a transformative year for Fire & Flower as our strong fiscal 2020 financial and operational results demonstrate our ability to successfully execute on our aggressive growth strategy,” said Trevor Fencott, Chief Executive Officer of Fire & Flower. “From an operating standpoint, we continued to make significant progress as we grew from 21 stores at the beginning of 2019 to 80 stores today, which includes the recent acquisition of Friendly Stranger. Building on top of our record growth is our recently signed strategic licensing partnership and acquisition option with American Acres, which provides us with an opportunity for considerably greater expansion as it serves as an entry point into the sizable U.S. cannabis market. Financially, fiscal 2020 was a banner year of growth for the company as we increased revenues over 150% year-over-year and ended with positive Adjusted EBITDA. We also strengthened our balance sheet through the reduction of debt which provides us with greater financial flexibility to execute on our overall strategy.”

Circle K Effect

Fencott continued, “Our investment in technology and innovation has led our proprietary Hifyre digital platform to become the market-leading analytics and data-driven system, assisting our multi-banner retail stores understand consumer habits and behaviours which further positions us for growth and the challenges of competition.  Our cutting-edge retail platform is now being recognized as a key tool for growth in the cannabis retail industry. Recently, leading U.S. analytics company, BDSA, partnered with our Company to build their operations with our proprietary platform. In addition, the owners of Circle K, Alimentation Couche-Tard continued to support our strategy by bringing their ownership stake in us to 19.9% and deepening our operational relationship with initiatives like our Circle K co-located store pilot program which utilizes their existing real estate footprint or selling Fire & Flower gift cards in hundreds of Circle K stores across the country.”

Nasdaq

“With the strong momentum we have entering 2021 and our path to US market entry, we felt that now is the right time to apply to list on the Nasdaq (NDAQ), which will give us increased exposure to the global investment community while we execute on our growth plan to cement our status as the leading data-driven international cannabis retailer,” concluded Fencott.

After The Quarter

The company noted that after the quarter ended, it entered into a strategic licensing partnership and acquisition option with American Acres, which intends to operate dispensaries in CaliforniaArizona, and Nevada with the first Fire & Flower branded store expected in Palm Springs, California this year. It has more than 80 retail stores under four banners across the provinces of AlbertaSaskatchewanManitoba and Ontario, and the Yukon territory. The company completed a $15 million, low-cost, at-the-market equity distribution offering which further strengthened the company’s balance sheet and positions Fire & Flower for future growth. Announced planned $53 million debt-to-equity conversion which significantly improved the company’s balance sheet and further reduced interest costs. Circle K owner, Alimentation Couche-Tard’s debenture conversion was $23.6 million, which will bring their equity stake to 19.9%. Hifyre entered into strategic agreement with leading U.S. analytics company BDSA.

Debra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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