Circle K Archives - Green Market Report

Debra BorchardtOctober 5, 2021
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4min9170

Alimentation Couche-Tard (ACT) (OTC: ANCUF), the parent company of Circle K stores is continuing to cement its relationship with cannabis company Fire & Flower Holdings Corp. (TSX: FAF) (OTCQX: FFLWF). The two companies are expanding on a pilot program to open new Fire & Flower cannabis retail stores next to existing Circle K in markets across Canada.

The original Circle K co-located store pilot program started in July 2020 with the first two stores, located in Calgary and Grand Prairie, Alberta. The company said that the expansion of the pilot program between the strategic partners will see new co-located retail stores open over the next several months in the Canadian provinces of AlbertaSaskatchewan, and Manitoba. The two companies said they expect to continue this strategy with sights set on Ontario and even the U.S.

“Alimentation Couche-Tard has been an invaluable partner to Fire & Flower as we built out Canada’s largest retail network of legal cannabis products and services over the past two years. Our success in Canada, and now as we enter into the U.S., is directly attributable to the powerful consumer data and analytics technology that we have successfully employed in each of our stores through our Hifyre™ technology platform,” said Trevor Fencott, Chief Executive Officer of Fire & Flower. “As we continue to build on our leadership position, we are leveraging our powerful consumer data, strategically working with our key partners to capture this data and, together, enhance our collective cannabis operations, allowing Fire & Flower to advance our ‘asset-light’ business model to further support our financial growth.”

The companies are also capitalizing on the technology that each has developed in order to plan the co-location sites. Fire & Flower said that it used ACT’s existing lease footprint and its own analytics platform called Hifyre to build a small-scale store that delivers strong economies of scale for both companies.

Fencott added, “As we continue to advance our relationship with Couche-Tard, we are driving a new level of service to our extensive operational footprint in Canada and beyond. We are able to leverage the power of Hifyre to allow these small co-located stores to run efficiently. The advanced analytics we provide allows stores to operate and manage inventory at maximum efficiency.”

StaffJune 23, 2021
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Circle K Owns 20% of Fire & Flower

Fire & Flower Holdings Corp.  (TSX: FAF) (OTCQX: FFLWF) announced that 2707031 Ontario Inc. the wholly-owned indirect subsidiary of Alimentation Couche-Tard Inc. (OTC: ANCUF),  the owners of Circle K, has delivered in escrow its exercise notice and gross proceeds of $9,770,374.47 to exercise warrants to acquire 10,505,779 common shares of Fire & Flower at an exercise price of $0.93 per common share pursuant to the terms of an Amended and Restated Warrant Certificate dated September 16, 2020.

ACT, together with 2707, currently owns 66,328,421 common shares of Fire & Flower representing approximately 19.9% of its issued and outstanding shares. Issuance of the Shares will increase ACT’s collective ownership of common shares of Fire & Flower by approximately 2.45%.

“Alimentation Couche-Tard has been a strategic partner of Fire & Flower for almost two years and has been key in supporting the expansion of our data-driven retail network and improving our financial position through their continued investment. The exercise of these warrants speaks to the continued growth of our partnership and 2707’s strong support of Fire and Flower’s technology-driven retail strategy to drive ongoing financial and operational growth. With our strengthened balance sheet, we are strategically positioned to expand across Canada and in the U.S. as we continue to build out our omni-channel retail portfolio,” said Trevor Fencott, Chief Executive Officer of Fire & Flower.

TGOD Pays Debts

The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (US-OTC: TGODF) reported that its wholly-owned Quebec subsidiary Medican Organic Inc. has completed the sale of the majority of its assets in Valleyfield, Quebec, including all industrial and agricultural land, main hybrid greenhouse, rooftop greenhouse, all support buildings and certain related equipment, to Cannara Biotech (OPS) Inc. for the $27 million purchase price. In addition, Medican received a $5.7 million deposit refund from Hydro-Quebec. TGOD repaid approximately $31.8 million to its senior lender to settle all of its outstanding obligations and terminated the loan agreement with the lender.


Debra BorchardtMarch 2, 2021
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4min21240

Alimentation Couche-Tard Inc. or ACT, the owners of Circle K have increased its equity stake in Canadian cannabis company Fire & Flower Holdings Corp.  (OTCQX: FFLWF). ACT announced that it plans to convert all of its approximately $28.5 million outstanding principal amount of 8.0% secured convertible debentures issued in April 2020 as well as the conversion of approximately $23.6 million principal amount of 8.0% unsecured convertible debentures issued to 2707031 Ontario Inc. Following the conversion, ACT will have converted a total of approximately $52 million principal amount of debt to equity and ACT will hold 19.9% of the issued and outstanding shares of Fire & Flower.

Shawn Dym, Director and Founder of Green Acre Capital LP, commented, “We, along with other holders of the April 2020 Debentures, voluntarily agreed to amend the debentures to allow for the conversion well in advance of their maturity as we felt it was consistent with our support of the Company as shareholders rather than creditors. As management continues to execute on its growth plans and build shareholder value, we are supportive of de-levering the balance sheet to aid the Company’s expansion into new high-growth markets. The Company has sufficient resources to grow its store count in Canada and expand its leading position in Canadian cannabis retail. Furthermore, we believe it is important to show the strength in its financial position as it pursues a listing on the Nasdaq and sets out for US brand expansion through its recently announced licensing deal with American Acres.”

“These conversions will significantly improve our balance sheet, reduce interest costs and support enhanced access to non-dilutive financing with our banking partner, ATB Financial,” remarked Trevor Fencott, Chief Executive Officer of Fire & Flower. “We are very pleased with the support of our partners and welcome ACTs increased 19.9% ownership stake. We look forward to continuing to aggressively pursue our growth strategy in both Canada and the United States.

Convenience Store Strategy

Many believe that once cannabis is decheduled, it could be treated much the same as tobacco or alcohol. This would mean that cannabis products like pre-rolls could be sold from behind the counter of convenience stores like Circle K. Cigarettes are sold this way and the stores are trained to check IDs for age in order to buy the products. It isn’t a stretch to  believe that the cannabis companies that are able to sell through convenience stores would do massive volumes in sales. A model that is similar to basic beers like Budweiser or Miller beer.

Fire & Flower is a multi-banner cannabis retail operator that owns and operates the Fire & Flower, Friendly Stranger, Happy Dayz, and Hotbox brands. Fire & Flower Holdings Corp. owns all issued and outstanding shares in Fire & Flower Inc. and Friendly Stranger Holdings Corp., licensed cannabis retailers that own and operate cannabis retail stores in the provinces of AlbertaSaskatchewanManitoba and Ontario, and the Yukon territory.

 


Debra BorchardtJuly 6, 2020
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The relationship between Fire & Flower Inc.  (OTCQX: FFLWF) and its strategic investor Alimentation Couche-Tard Inc. (OTC: ANCUF) had signaled that someday the convenience store chain Circle K would get involved with cannabis. It seems the day is getting closer as Fire & Flower announced the openings of its first two cannabis retail stores adjacent to Circle K locations in the province of Alberta.

Fire & Flower’s plan is that it will gain from the high traffic at these Circle K locations that will be convenient for cannabis customers. The company said it believes it will maximize the benefit of the Spark Perks program and Spark Fastlane online ordering services at conveniently located stores.

“As we continue to build our relationship with Alimentation Couche-Tard, Fire & Flower is very pleased to be embarking on this initiative together,” shared Trevor Fencott, Chief Executive Officer of Fire & Flower. “We believe that combining convenient pickup locations with digital engagement offered by the Hifyre platform and Spark Perks program presents our customers with a differentiated value proposition in an increasingly competitive cannabis retail market. This approach to innovation in omnichannel and convenience-oriented cannabis retail differentiates Fire & Flower and positions us well to capitalize on both domestic and international opportunities.”

The company said the two stores in Calgary and Grande Prairie are expected to be the first of additional opportunities to co-locate cannabis retail stores in the future. The statement said that the co-located stores will be owned and operated by Fire & Flower and are separate from the adjacent Circle K in accordance with all applicable regulations. Alimentation Couche-Tarde said it has set its sights on the global expansion as new cannabis markets emerge.

In August 2019, Fire & Flower closed a strategic investment by Alimentation Couche-Tard. The company noted in its filing statement that this transaction allowed for Couche-Tard to obtain a controlling interest and provides more than $380 million of growth capital for global expansion. It provided significant, new possible commercialization and leadership opportunities for Fire & Flower’s proprietary Hifyre digital platform and access to Couche-Tard’s leadership team.

Convenience Stores

It has been argued that if cannabis is rescheduled and treated like alcohol or tobacco, cannabis products could end up in convenience stores. Products for adults over 21 like alcohol and tobacco are already sold in the convenience store model, so adding cannabis to the mix isn’t a stretch as long as the product is fully legal. A few cannabis companies had already begun to establish such relationships, if mostly behind closed doors.

The cannabis industry doesn’t want to discuss such an outcome as it would destroy the need for dispensaries. Plus, convenience stores typically only carry products from a small group of very connected consumer package goods companies. A look at the beer offerings demonstrates that only a handful of choices are offered. These beers, not necessarily considered the best the industry has to offer, are sold at high volumes.

This is the fear for many in the cannabis industry. The convenience stores may only carry a few big-name brands, that may not be the best cannabis, but is scalable cannabis. The winners of all this volume business will only be the ones picked by the convenience store chain. Cannabis brands will have to decide if they want to be a craft business or a volume business like Budweisers.

 

 

 


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