convenience stores Archives - Green Market Report

Debra BorchardtDebra BorchardtJuly 6, 2020
CircleK.jpeg

5min16580

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.

 

 

 


Debra BorchardtDebra BorchardtOctober 1, 2019
FireFlower.jpg

3min8350

Fire & Flower Holdings Corp. (TSX: FAF) its financial results for the second fiscal quarter ending August 3, 2019, with total revenue of $11.1 million versus $9.5 million for the same time period in 2018. The net loss for the quarter was $6.4 million versus last year’s net loss of $4.2 million for the same quarter. The net loss per share remained flat at ($0.06). 

Fire & Flower‘s financial and operational results for the quarter demonstrate that the company is continuing to build the infrastructure required to support the rapid growth of our retail network and deliver on our objectives,” shared Trevor Fencott, Fire & Flower’s, Chief Executive Officer. “Our strategic partnership with Alimentation Couche-Tard is transformative for the Company and the Hifyre digital retail platform continues to showcase Fire & Flower as a leading data-driven, ‘retail 2.0’ company.”

Breaking Down The Revenue

$9.7 million of $11.1 million in revenue was cannabis-related accessory sales with wholesale sales accounting for $0.9 million and digital development revenue of $0.5 million. During the first quarter, cannabis-related accessory sales were $7.7 million, wholesale sales of $1.3 million and digital development revenue of $0.5 million. The company said that revenues were expected to continue to increase as it acquires new licenses, opens additional retail cannabis stores, and continues to commercialize the HifyreT digital retail and analytics platform.

Here Come The Convenience Stores

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

The Hifyre platform provides real-time reporting and analysis to the Company’s marketing, retail experience, and merchandising teams and is supplied to Licensed Producers to assist in demand forecasting, product development and sales reporting. This platform is integral to Fire & Flower operating as a data-driven “retail 2.0” company.

 



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