Adam JacksonAugust 18, 2023
John Chou also stepped down from his chief financial officer position.
Fire & Flower Archives - Green Market Report
Adam JacksonAugust 18, 2023
StaffJune 22, 2023
The Daily Hit is a recap of the top financial news stories for June 22, 2023.
On the Site
Canopy Growth Sees More Than $3 Billion in Losses
Canada-based cannabis industry leader Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) has reported steep rising losses worth more than C$3 billion. Canopy posted revenue of C$87.54 million for the fourth quarter ending March 31, 2023 versus last year’s $101 million – a decline of 14%. Still, the revenue figure beat Yahoo Finance’s analyst average of $73.1 million for the year. Read more here.
SEC Fines Marcum $10 Million for Improper SPAC Audits
The Securities and Exchange Commission censured accounting firm Marcum LLP for engaging in unethical and improper professional conduct related to Special Purpose Acquisition Corporations (SPAC). The SEC also noted that Marcum offered $10 million to settle the case, which the commission said it will accept it. Marcum is major accounting partner in the cannabis industry. Read more here.
Colorado Cannabis Market Shows First Price Rise Since 2021, Ducking Deflation
After nearly a two-year stretch of deflation, marijuana prices in Colorado are showing the first signs of life since October 2021, according to the Colorado Department of Revenue. The retail price for a pound, which had plummeted from a peak of $1,731 in January 2021 to a historic low of $649 by April 2023, has risen to $703 in June 2023. The price hike is a break from the two-year trend of slumping cannabis prices, which hovered around half of the rates seen before 2022. Read more here.
iAnthus Gets Hit With a RICO
A Maryland-based cannabis dispensary, LMS Wellness Benefit LLC, has accused iAnthus Capital Holdings Inc. (CSE: IAN) (OTCPK: ITHUF) of a scheme to divert at least $4.5 million from its funds into iAnthus’ other business interests, according to a lawsuit filed in federal court this week. In the civil RICO suit, LMS claims that a management firm it had hired, S8 Management LLC, which shares several executives and directors with iAnthus, made unauthorized money transfers from LMS’s account to the failing subsidiaries of iAnthus, Law360 reported. Read more here.
Anti-Cannabis Group Sues New York Over Legalization
A group of anti-cannabis parties has banded together to sue the State of New York including Governor Kathy Hochul, the Cannabis Control Board and the Office of Cannabis Management. The case was filed on June 20, 2023. New York passed the Marijuana Regulations and Taxation Act (MRTA) on March 31, 2021 which legalized adult-use cannabis. Read more here.
Unlicensed Dispensary Landlords Face New Penalties Under Council Bill
In Other News
Fire & Flower On Sale
Fire & Flower Holdings Corp.(TSX: FAF) (OTCQX: FFLWF) has received approval from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act for the implementation of a sale and investment solicitation process to be conducted by FTI Consulting Canada Inc., and a stalking-horse agreement between the company and 2707031 Ontario Inc., an affiliate of Alimentation Couche-Tard Inc. Read more here.
Hexo, Tilray Deal Closes
HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) announced today the closing of the second of two tranches of the non-brokered private placement of Series 1 Preferred Shares previously announced on June 1, 2023 and the subsequent completion of the transactions contemplated by the previously announced statutory plan of arrangement under section 182 of the Business Corporations Act (Ontario) involving the Company and Tilray Brands, Inc. (NASDAQ: TLRY) Read more here.
Adam JacksonJune 16, 2023
The court has now revised the initial order with some new caveats.
Adam JacksonJune 6, 2023
The company's decision to file for bankruptcy underscores the ongoing challenges in the sector.
Debra BorchardtMay 15, 2023
Company is finding itself in a cash crunch situation.
Adam JacksonApril 17, 2023The deal gives Fire & Flower first rights to Circle K locations outside of Canada.
Adam JacksonMarch 28, 2023Same-store sales jumped on the customer loyalty programs.
Debra BorchardtDecember 13, 2022
Company makes progress over the second quarter.
Adam JacksonNovember 7, 2022
The company said that four stores will open in the coming weeks.
Adam JacksonOctober 18, 2022Fire & Flower Holdings Corp. (TSX: FAF) (OTCQX: FFLWF) has fashioned a financing deal with Alimentation Couche-Tard Inc. — owner of Circle K convenience stores — in which ACT would supply the company with a $11 million principal amount loan.
The two have also revised a stock purchasing agreement, in which ACT will snap up $5 million worth of common shares of Fire & Flower. ACT is currently the holder of 17,796,284 Series C Warrants.
“These financings with our strategic partner, Alimentation Couche-Tard, provide Fire & Flower with access to capital on favorable terms and demonstrate continued strategic alignment between the two companies as we continue to execute our technology-enabled retail strategy,” said Stéphane Trudel, Chief Executive Officer of Fire & Flower.
“The company will prudently use this capital to continue to grow the business and build upon the recent success we have seen through improvements in our retail, wholesale and logistics, and digital business segments.”
ACT will loan $11 million to the company with an interest rate of 11.0%. The loan matures on December 31, 2023, and ACT will have first-priority security on all of the assets of the company and its subsidiaries, including all intellectual property subject only to permitted liens. Fire & Flower noted in its last earnings report that it had current liabilities of C$31 million and total liabilities of C$79 million.
Fire & Flower may prepay all or any portion of the loan without a bonus or penalty. Funding under the loan agreement is subject to approval from the Toronto Stock Exchange, with funding of the loan expected to occur shortly thereafter.
For the stock purchase, ACT will subscribe for 3,034,017 shares at a price of $1.64798 per share for proceeds of approximately $5 million. Fire & Flower is entitled to terminate the deal and enter into an agreement with respect to an unsolicited superior proposal, in which case the loan shall become immediately due and payable.
“In addition to our co-located store program with Fire & Flower, Alimentation Couche-Tard has committed to advance these financings to enable Fire & Flower to execute upon its growth-oriented strategy,” said Alex Miller, Executive Vice-President, Operations, North America, and Global Commercial Optimization of Alimentation Couche-Tard.
Miller added, “Fire & Flower continues to be our strategic partner in the growing cannabis retail market, and we look forward to continuing to work with Fire & Flower on other initiatives.”
Get the latest cannabis news delivered right to your inbox
Unpack the industry with the daily cannabis newsletter for business leaders.