Couche-Tard Exits Canadian Cannabis Partnership

Circle K owner no longer has stake in Fire & Flower
Fire & Flower store
Photograph courtesy of Fire & Flower

Convenience-store retailer Alimentation Couche-Tard no longer has a stake in Canadian cannabis company Fire & Flower Holdings Corp., the company shared on its latest earnings call.

“During the second quarter and first half-year of fiscal 2024, losses of $2 million and $3.5 million, respectively, were recorded, bringing the carrying amount of our ownership interest in Fire & Flower to nil,” the company said in a news release on its second quarter of fiscal year 2024 earnings.

In 2019, Circle K c-store owner Couche-Tard made a strategic investment in Fire & Flower Holdings Corp., investing about $26 million for a 9.9% ownership interest.

Fire & Flower opened some cannabis stores adjacent to Circle K stores in Canada, and it planned to expand to more locations. Through Couche-Tard’s investment, Fire & Flower previously said it was eyeing a global expansion as new cannabis markets emerge and was poised to expand into the United States when regulations changed.

Then in June, Fire & Flower began a formal restructuring and filed for bankruptcy, and the Ontario Superior Court of Justice approved a sale and investment solicitation process in which one of Couche-Tard’s subsidiaries acted as a stalking horse bidder, the earnings report stated.

Couche-Tard was unsuccessful in its bid, and Fire & Flower was acquired by Toronto-based Fika Cannabis on Sept. 15. As a result, the principal and accrued interest related to Fire & Flower’s loans, which included a more than $7 million debtor-in-possession loan from Couche-Tard, were repaid and Couche-Tard’s ownership in the company was canceled, the earnings report said.

The ending of the Fire & Flower partnership doesn’t necessarily mean Circle K is done with cannabis, however. Alimentation Couche-Tard Inc. and Green Thumb Industries Inc., a Chicago-based cannabis consumer packaged goods company and owner of Rise Dispensaries, said they will roll out approximately 10 Rise Express-branded medical cannabis dispensaries adjacent to Circle K convenience stores in several Florida locations. Couche-Tard did not immediately respond to CSP’s request for comment on the status of this project.

  • Alimentation Couche-Tard is No. 2 on CSP’s 2023 Top 202 list of convenience-store chains by store count.

Fire & Flower is a cannabis and consumer retail and technology platform with more than 90 corporate-owned stores in its network. The company leverages its wholly owned technology development subsidiary, Hifyre Inc., to advance its proprietary retail operations model.

Circle K is a retail brand of Alimentation Couche-Tard, Laval, Quebec. Couche-Tard operates in 25 countries and territories, with more than 14,400 c-stores, including more than 7,000 in the United States.

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