TORONTO — Fire & Flower Holdings Corp. is amending certain agreements with Fire & Flower US Holdings Inc. that give it the option of acquiring Fire & Flower US and, subsequently, corporate-owned cannabis retail stores in major markets in the United States.
The agreements also deploy the Hifyre technology platform in the United States. The Hifyre digital retail and analytics platform includes the Spark Perks member program, Hifyre ONE retail software platform, Hifyre IQ cannabis data and analytics platform, and Hifyre Reach digital advertising network, Fire & Flower said.
Fire & Flower is expected to acquire Fire & Flower US upon federal legalization of adult-use cannabis in the United States or when otherwise permitted by the policies of the Toronto Stock Exchange or any other stock exchange on which the company’s securities are listed for trading, the company said.
“The amendments to our strategic agreements with Fire & Flower US expand the ability for the Fire & Flower and Hifyre brands to open in key markets ahead of federal permissibility of adult-use cannabis in the US,” said Trevor Fencott, Fire & Flower CEO. “In addition, the technology, software and support fees create an additional high-margin revenue channel in our digital business segment.”
The amended strategic agreements, along with Fire & Flower’s relationship with the owner of Circle K, Alimentation Couche-Tard Inc., will help position Fire & Flower to one day be a key player in the U.S. cannabis industry, where there is a demand for incorporating technologically advanced systems, Fencott added.
“We believe the amendments to the strategic agreement provide a meaningful near and long-term benefit to Fire & Flower shareholders in our option to acquire Fire & Flower US,” he said.
Highlights of the amendments to the strategic agreement:
- Fire & Flower continues to have the option to acquire Fire & Flower US.
- Hifyre will now receive a one-time implementation fee and ongoing software and support fees for each Fire & Flower branded store operated by Fire & Flower US.
- Subject to certain conditions, Toronto-based Fire & Flower shall pay shareholders of the licensee an aggregate amount of $5 million and will have the option to pay additional cash amounts.
- Upon payment of additional cash amounts, Fire & Flower may extend its option to acquire Fire & Flower US to February 2028 or such later date upon the federal legalization of adult-use cannabis in the United States or when such acquisition would otherwise be permitted by the policies of the Toronto Stock Exchange or any other stock exchange on which Fire & Flower’s securities are listed for trading. Fire & Flower also may expand the number of cannabis retail stores that Fire & Flower US might operate using the licensed trademarks or intellectual property and expand the territory in which Fire & Flower US may operate cannabis retailer stores using the licensed trademarks or intellectual property.
Fire & Flower owns and operates the Fire & Flower, Friendly Stranger, Happy Dayz and Hotbox brands. In 2019, Couche-Tard made a strategic investment in Fire & Flower Holdings Corp., investing about $26 million for a 9.9% ownership interest. Through Laval, Quebec-based Couch-Tard’s investment, Fire & Flower said at the time, it was setting its sights on the global expansion as new cannabis markets emerge.
Fire & Flower has more than 100 corporate-owned stores in its network.
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