Convenience store operator Couche-Tard plans to make a significant investment in Edmonton-based cannabis company Fire & Flower.
Couche-Tard’s initial investment is for 9.9 per cent equity in Fire & Flower for close to $26 million, with potential to increase that stake in the near future to 50.1 per cent for more than $380 million.
“Fire & Flower has demonstrated that it is capable of rapidly scaling its retail platform through a best-of-class store concept, a leading digital platform and a focus on the safe, responsible and lawful sale of cannabis. This investment will provide Fire & Flower with additional funds to support the further development of its proprietary Hifyre digital retail platform and expansion of its retail store network across Canada and internationally where legally permitted,” it said in a news release.
The Edmonton-based company said this investment leverages Couche-Tard’s vast international infrastructure and experience for global expansion opportunities. With 16,000 stores in 25 countries around the world, it’s expected that the strategic investment and relationship with Couche-Tard will positively impact Fire & Flower’s international growth capabilities, it added.
“This strategic investment by Couche-Tard, one of the world’s largest retailers, is transformative for Fire & Flower. The retail cannabis platform we developed marries a best-in-class in-store experience with our proprietary Hifyre digital infrastructure and this is a huge vote of confidence in the platform,” said Trevor Fencott, Fire & Flower’s chief executive officer.
“The support of Couche-Tard’s world-class leadership team, coupled with their impressive international footprint, which includes major markets such as the U.S., Mexico and Europe, provide us with outstanding opportunities for aggressive growth.”
The cannabis company said the investment accelerates Fire & Flower’s pace of growth and expansion both in the number of stores it is able to open as well as the number of markets it is potentially able to access.
“Couche-Tard is excited to make this strategic investment in one of the fastest growing cannabis ‘pure-play’ retailers,” said Brian Hannasch, president and CEO of Couche-Tard. “This investment in Fire & Flower, with a path to a controlling stake, will enable us to leverage their leadership, network and advanced digital platform to accelerate our journey in this new and flourishing sector.”
Fire & Flower has 24 licensed stores across Canada in Alberta, Saskatchewan, Manitoba, Ontario and the Yukon.
“Our current plan is 45 stores by the end of fiscal 2019. However, with this large capital infusion, growth capital, we plan to roll out more aggressively,” said Fencott.
As of April 28, Couche-Tard’s network comprised 9,866 convenience stores throughout North America, including 8,629 with vehicle fuel dispensing. Its North American network consists of 19 business units, including 15 in the United States covering 48 states and four in Canada covering all 10 provinces. Approximately 109,000 people are employed throughout its network and at its service offices in North America.
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