Fika Cannabis won the bid for Toronto-based cannabis retailer Fire & Flower Holdings Corp., the company announced Thursday. It was not immediately clear how or if this change would affect convenience retailer Alimentation Couche-Tard’s investment in Fire & Flower.
The virtual auction was held on Aug. 15 by FTI Consulting Canada Inc., in its capacity as court-appointed monitor of Fire & Flower and its Canadian subsidiaries. Fika Cannabis, a Toronto-based cannabis shop with retail outlets across Ontario, was the successful bidder and a closing date of Sept. 8 is expected, according to Fire & Flower. This is subject to the approval from the Ontario Superior Court of Justice and other regulatory approvals. Fire & Flower intended to appear before the court as soon as possible to seek an order approving the proposed transaction, the company said.
Fire & Flower also said John Chou, its chief financial officer, has resigned, and John Rim has been appointed interim CFO.
CSP's emails to Fire & Flower Holdings Corp., Fika Cannabis and Alimentation Couche-Tard remained unanswered as of Tuesday morning. Fire & Flower’s website is no longer active.
- Alimentation Couche-Tard is No. 2 on CSP’s 2023 Top 202 ranking of convenience-store chains by store count.
In early June, Fire & Flower and its Canadian subsidiaries filed for and received protection from their creditors under the Companies’ Creditors Arrangement Act (CCAA) in Canada. The company had been pursuing additional financing to raise capital to fund its operations and meet its growth targets. On May 26, it engaged a financial advisor to assist with reviewing strategic options.
The CCAA is a federal law allowing insolvent corporations that owe creditors more than $5 million Canadian ($3.73 million U.S.) to restructure their business and financial affairs. The act allows companies to continue business while they seek to develop and obtain arrangements with creditors. Canadian courts have said the main purpose of the CCAA is to avoid the social and economic consequences of bankruptcy, according to Canada’s Office of the Superintendent of Bankruptcy.
Fire & Flower is a multi-banner cannabis retail operator that owns and operates the Fire & Flower, Friendly Stranger and Firebird Delivery brands. Fire & Flower also has strategic licensing agreements for its brand and Hifyre digital platform in Canada and certain U.S. states. It has more than 90 corporate-owned stores in its network, Fire & Flower said.
In 2019, Couche-Tard made a strategic investment in Fire & Flower Holdings, investing about $26 million for a 9.9% ownership interest. Through Laval, Quebec-based Couche-Tard’s investment, Fire & Flower said at the time, it was setting its sights on the global expansion as new cannabis markets emerge. Laval, Quebec-based Couche-Tard’s 24-country global c-store network includes more than 7,100 in the United States, primarily under the Circle K and Holiday Stationstores banners. Couche-Tard’s total worldwide network consists of approximately 14,300 mostly Circle K-branded c-stores.
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