Fire & Flower Archives - Green Market Report

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.


StaffJune 15, 2021
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Fire & Flower Holdings Corp. (OTCQX: FFLWF) announced its financial and operational results for the fiscal first quarter ending May 1, 2021 with revenue rising 90.7% to $44.1 million. However, Fire & Flower also delivered a net loss of $61.6 million versus last year’s $12.7 million for the same time period. The company blamed the net losses on a $54.1 million loss on the revaluation of derivative liabilities in the current quarter. 

“We started 2021 off strong by delivering our fourth consecutive quarter of positive Adjusted EBITDA while posting record quarterly revenues,” said Trevor Fencott, Chief Executive Officer of Fire & Flower. “Despite the challenges produced by the COVID-19 pandemic, our retail business continued to drive strong sales growth as we expanded our retail footprint by bringing Fire & Flower to British Columbia, opening two new stores in Vancouver, and bringing our total store count to 83 licensed cannabis stores. Our wholesale division continued to grow in Saskatchewan as more retailers look to our Open Fields Distribution business to supply their inventory. And last, driving our leadership position in Canada, and now emerging in the U.S., is the ongoing success of our proprietary Hifyre business, as it becomes increasingly recognized as one of the industry’s most advanced digital retail and data analytics platforms.”

The company said it was the fourth consecutive quarter of positive Adjusted EBITDA of $2.3 million as compared to an Adjusted EBITDA loss of $1.4 million for the first quarter of 2020. In addition, the company reported a gross profit percentage of 37.5% compared to 32.6% for the same period in 2020.

Balance Sheet Improvements

Fire & Flower completed a $15 million at-the-market equity offering and strengthened its balance sheet with a $53 million debt-to-equity conversion helping to further reduce interest costs. A wholly-owned indirect subsidiary of Circle K owner, Alimentation Couche-Tard Inc. converted approximately $24 million principal amount of debentures, which increased their equity stake in the Company to 19.9%. Total debt was reduced from $37.5 million on January 30, 2021, to $7.2 million. The company has a cash balance of $32.7 million as compared to $30.6 million on January 30, 2021.

Fencott added, “We are strategically leveraging the significant growth opportunities that exist within each of our business segments and continue working towards listing our shares on the Nasdaq. We expect this upcoming listing will help generate additional exposure for our common stock in the U.S. while providing additional liquidity to our shareholders. As we head into the second half of the year with strong momentum from the reopening of provinces and consumers coming back into the stores, we are confident we are positioned to deliver sustainable growth throughout 2021 and beyond.”

Derivative Revaluation

The company said in its filing that on May 1, 2021, the derivative liabilities related to the Investor Debentures conversion option, Series B Warrants and Series C Warrants were
revalued using the Monte-Carlo and trinomial tree model simulation valuation technique and the following inputs and assumptions: stock price of $1.10; risk-free interest rate range of 0.33% – 0.24%; and expected volatility of 78%-83% based on historical trading data of the Company and its peers (January 30, 2021: $0.80 stock price, 0.14% – 0.16% risk-free interest rate range, and 80% – 82% expected volatility range).

Also noted in the filing that during the thirteen weeks ending May 1, 2021, the company’s 8% secured convertible debentures with $29,407 in principal amount outstanding (the “April 2020 Debentures”) were early converted and settled at the conversion price of $0.50. Coupon interest of $1,139 was also settled in common shares at the conversion price of $0.50. A total of 61,091,318 common shares were issued for the principal conversions and interest settlement. The common shares issued had a value upon conversion of $64,955, which was comprised of the carrying values, as at the date of conversion, of the debenture liability ($16,754) and the corresponding conversion option derivative liability ($48,201). The conversion option derivative liability was valued by taking the difference between the intrinsic value and the fair value of the debt portion. The intrinsic value and discounted cash flow approach utilized for the valuation of the debt portion had the following key inputs and assumptions: stock price of $1.36, and discount rate 26%-32%.


Debra BorchardtApril 27, 2021
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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 BorchardtMarch 2, 2021
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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 BorchardtNovember 23, 2020
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The number of cases of COVID-19 has spiked in the province of Ontario causing new lockdown orders. It was reported that more than 1,400 new coronavirus cases had been recorded in Ontario on Friday. Toronto has been the hot zone for the latest outbreak as the city broke its record for new infections on Tuesday and has reported several hundred new cases each day this week.

On Friday, November 20, 2020, Attorney General Doug Downey approved an emergency order placing the Toronto and Peel regions under a new lockdown to combat COVID-19. On Sunday, Ontario Regulation 654/20 was made allowing cannabis retail stores located in the lockdown regions to operate through e-commerce, curbside pickup, and home delivery services causing cannabis stores to once again pivot to online orders.

High Tide

High Tide Inc.  (OTCQB: HITIF) announced that it is fully compliant with the order issued by the Province of Ontario to place Toronto and Peel under lockdown. The company noted that in Toronto, the affected locations have been adjusted to offer only curbside pickup with delivery services to follow shortly thereafter for the announced 28-day period. High Tide currently operates 60 other retail cannabis stores across Canada and it does not have any locations in the Peel Region.

“Throughout the pandemic, we have remained agile in our operations to prioritize the needs of our customers across the country in a safe and compliant manner. Our curbside pickup services available at CannaCabana.com and MetaCannabis.com will continue to provide our Toronto-based customers with access to our full catalog of cannabis products throughout the 28-day lockdown,” said Raj Grover, President and Chief Executive Officer of High Tide. “As a diversified cannabis company with 66 retail locations in four provinces, a robust e-commerce portfolio and extensive operations in the US and abroad, we expect the lockdown to minimally impact our business. We will continue to optimize our business and are taking appropriate action to manage our operating costs accordingly,” added Mr. Grover.

Fire & Flower

Fire & Flower Holdings Corp.  (OTC: FFLWF)has said that its stores will once again offer free home delivery and curbside pick-up to safely and responsibly service its customers during the newly-mandated Toronto and Peel region lockdown in the Province of Ontario. “We applaud Attorney General Doug Downey for the practical solution of allowing provincially-licensed cannabis retailers the same e-commerce abilities of delivery and curbside pick-up that all other retailers have during this period of lockdown,” said Trevor Fencott, Chief Executive Officer, Fire & Flower. “This act allows us to safely provide service to our customers and continue to combat the burgeoning illegal market during these challenging times.”

“As the legal industry steps up for the second time and invests in safe delivery for our customers, we hope the Provincial government will recognize that the Ontario Cannabis Store’s monopoly on delivery is an unnecessary burden on public health, taxpayers, customers and economic growth in the Province” continued Fencott. “Lockdowns will eventually end, but the road to economic recovery for private business will be difficult and the large illegal market will continue unchallenged unless the government makes these changes permanent. Our customers expect e-commerce and delivery options from every other kind of retailer in the Province, and deserve to receive equitable treatment for licensed cannabis retailers.”


Debra BorchardtNovember 2, 2020
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Fire & Flower Holdings Corp. (TSX: FAF) (OTCQX: FFLWF) is buying Friendly Stranger Holdings Corp. in a deal valued at over $17 million. The deal is expected to close in the fourth quarter of 2020. An additional $4.6 million (approximately) will be set aside subject to authorizations for additional stores.

Friendly Stranger owns and operates 11 licensed cannabis retail stores across the province of Ontario with 4 additional cannabis stores in the pipeline to be licensed and operational by the end of the fourth quarter of 2020. The stores are called the “Friendly Stranger”, “Hotbox” and “Happy Dayz” and will continue to operate under those brand names.

“The acquisition of Friendly Stranger is transformative for Fire & Flower and is a product of our financially disciplined approach to aggregation in the sector. It will immediately put us in a leading position in the major Ontario market, and it allows us to increase the potential of the acquired stores using the proprietary capabilities of our Hifyre™ digital retail and analytics platform” shared Trevor Fencott, Chief Executive Officer of Fire & Flower. “The acquisition will bring some of Ontario’s longest established Cannabis brands into the Fire & Flower portfolio, transforming us into a multi-banner operator that appeals to a larger cross-section of cannabis customers. We are also excited to add Friendly Stranger’s demonstrated expertise in the high-margin accessories business to our team. We look forward to continuing to welcome Friendly Stranger customers into these stores and to our Spark Perks customer engagement program that already counts more than 150,000 members across the country.”

In September,  Fire & Flower delivered second-quarter revenue of $28.6 million including sales of $23.4 million in the retail channel, $4.3 million in the distribution channel, and sales of $0.9 million in the digital retail and analytics channel. At that time, the company said it was waiting for licensing at a number of locations in Ontario and intended to open these stores once final licensing was complete. During the onset of the COVID-19 public health crisis, Fire & Flower saw meaningful sales with basket sizes increasing as consumers purchased larger volumes of product. The company said it is now seeing consumer behavior return to normal seasonal levels and increased popularity in large format cannabis products, vapes, beverages, and edibles.

“Friendly Stranger is very pleased to be joining Fire & Flower, the leader in cannabis retail across the country,” shared James Jesty, President of Friendly Stranger. Friendly Stranger will benefit from the best practices set by the market leader including their technology-enabled approach and the scale brought from their operations. Through multiple brands in the Ontario market, Fire & Flower will benefit from the ability to serve diverse customer segments in the growing cannabis market.”

 

 


Debra BorchardtSeptember 15, 2020
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Fire & Flower Holdings Corp. (OTCQX: FFLWF) stock jumped over 6% on news of the company’s rising revenue in the second quarter. The company delivered revenue of $28.6 million including sales of $23.4 million in the retail channel, $4.3 million in the distribution channel, and sales of $0.9 million in the digital retail and analytics channel.

Still, the company reported a net comprehensive loss of $29.1 million, or net loss per share, and on a fully diluted basis of $0.18. the company attributed the loss on expenses of $12.5 million and other expenses of $26.5 million. Other expenses included losses on the revaluation of derivative liabilities of $18.3 million and finance costs of $8.2 million.

“Fire & Flower continues to drive towards delivering positive adjusted  EBITDA and during our second quarter of fiscal 2020, we have made meaningful progress towards this critical goal,” shared Trevor Fencott, Chief Executive Officer of Fire & Flower. “We believe the company is well-positioned to expand its footprint in the Ontario market and expects to have access to the necessary capital to support our growth plans. As the cannabis and retail industry continue to adapt to the COVID-19 public health crisis, we will remain on the leading edge of driving consumer engagement in this dynamic environment.”

Looking Ahead

Fire & Flower said that the development of retail stores in the province of Ontario has been affected by the slowdown in the issuance of licenses and store construction due to the COVID-19 public health crisis. The company is currently waiting for licensing at a number of locations in the province and intends to open these stores once final licensing is complete.

Following the end of the quarter, Fire & Flower acquired a flagship downtown Toronto store at 378 Yonge Street. This store is currently open and will be transitioned to the Fire & Flower brand in the coming weeks.

During the onset of the COVID-19 public health crisis, Fire & Flower saw meaningful sales with basket sizes increasing as consumers purchased larger volumes of product. The company said it is now seeing consumer behavior return to normal seasonal levels and increased popularity in large format cannabis products, vapes, beverages, and edibles.


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.

 

 

 


Debra BorchardtJune 16, 2020
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Fire & Flower Holdings Corp. (OTCQX: FFLWF) reported total revenue of $23.1 million for the first-quarter fiscal 2020 ending May 2, versus revenue of $9.5 million in the first quarter of fiscal 2019 – representing a 142% increase in revenue year-over-year. Unfortunately, the cost of those goods increased 166% for the quarter.

Fire & Flower delivered a net comprehensive loss of $(12.7) million, or net loss per share of $0.08. The company attributed the losses in part to expenses including $4.3 million of impairment charges. Other expenses were made up of finance costs of $6.7 million, partially offset by gains on derivative liabilities.

“Fire & Flower’s financial and operational results for the first quarter, fiscal 2020 demonstrates that the Company continues to show positive growth quarter over quarter and over its previous fiscal year. We will continue to work towards positive operating EBIDTA delivered through four-wall retail economics,” said Trevor Fencott, Chief Executive Officer of Fire & Flower. “The Ontario market presents a key growth opportunity for the Company and we will continue to focus on all major markets for private retail across Canada. Both the Open Fields Distribution Platform and Hifyre Digital Retail and Analytics platform provide additional independent revenue opportunities for the Company.”

The company reported an 83% increase in wholesale revenue through Open Fields Distribution in Saskatchewan from $2.1 million in Q4-2019 to $3.9 million in Q1-2020.

The company instituted a restructuring plan in the retail platform during the fourth quarter of 2019 and said that it was beginning to see results. Fire & Flower said it expects to keep building out its retail network, focusing on markets in Ontario with a significant number of cannabis consumers. However, the development of retail stores in the province of Ontario was affected by the slowdown in construction due to the COVID-19 public health crisis.  The company said it intends to prioritize expansion in the Ontario market for the current fiscal year, and also expects to enter the British Columbia market once final licensing is complete, and other Canadian markets as regulations permit.

COVID Update

Fire & Flower said it continued to see meaningful sales with basket sizes increasing with the increased popularity of large format cannabis products and the decrease of preroll cannabis products. “There continues to be meaningful demand for “cannabis 2.0″ new product formats such as edibles, vapes and beverages.”

As consumer interactions with cannabis retail took a digital focus during the COVID-19 public health crisis, Hifyre rapidly responded by deploying technologies such as “click-and-collect”, curbside pick-up and home delivery using proven models already in use in the province of Saskatchewan. With the focus of Hifyre resources shifted to these technologies during the quarter, the company saw a decrease in its digital revenue.

Fire & Flower stock has been slowly recovering from the lows it hit in March when the shares dipped into the twenty cent range. The stock was lately trading at roughly $0.55.


Debra BorchardtApril 30, 2020
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Fire & Flower Holdings Corp.  (NASDAQ:FFLWF) reported its fourth-quarter and 2019 financial results. The full-year revenue increased 294% to $51 million versus 2018’s full-year revenue of $12 million. The net loss for the year fell by 14% to $32 million from 2018’s net loss of $37 million.

The fourth quarter’s revenue increased by 61% to $16 million from 2018’s fourth-quarter$22  revenue of $10 million. The fourth-quarter net loss increased by 160% to $22 million from 2018’s fourth-quarter net loss of $8 million.

“The financial and operational results for our fiscal 2019 year and the fourth quarter demonstrate Fire & Flower’s continued track record of meeting our organizational goals. This includes delivering on our store target of 45 open and operating retail locations by the end of the fiscal year and dramatically growing our sales,” shared Trevor Fencott, Chief Executive Officer of Fire & Flower. “Looking forward to fiscal 2020, our focus will be on optimizing and growing our retail network where the Hifyre Digital Retail and Analytics platform continues to be our competitive advantage. We will focus on addressable markets and participating in those markets in a meaningful and accretive fashion to our business.”

Financial Status

The company said it closed the strategic investment with Alimentation Couche-Tard Inc. with an initial investment of $25.9 million (through 2707031 Ontario Inc., an indirect wholly-owned subsidiary). The strategic investment would result in Couche-Tard obtaining a controlling interest in Fire & Flower if all securities issued in connection with the strategic investment are converted/exercised in full.

Fire & Flower also stated that it closed two private placements for aggregate gross proceeds of $28 million with Green Acre Capital LP and AltaCorp Capital Inc. acting as the exclusive financial advisor to Fire & Flower in connection with the offerings. Plus, the company entered into a commitment letter with ATB Financial for senior secured credit facilities of up to $10 million with an option to secure an additional $5 million, subject to ATB Financial’s consent and other customary conditions.

In addition to those moves, the company forced the conversion of all remaining licensed producer debentures through the issuance of 12,223,638 common shares.

Retail Focus

Fire & Flower is taking a hard look at its retail empire. The company said it will prioritize expansion in the Ontario market for the current fiscal year, and also intends to enter the British Columbia market once final licensing is complete, and other Canadian markets as regulations permit. In March of 2020, the company acquired the Ottawa and Kingston, Ontario stores that were initially operated under license agreements by two Ontario cannabis retail store license holders. The company said it will close three locations in Alberta so it can focus on locations with higher profit potential.

 


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