/NOT FOR DISSEMINATION IN THE UNITED
STATES OR FOR DISTRIBUTION TO UNITED
STATES WIRE SERVICES/
TORONTO, Nov. 6, 2020 /CNW/ - Fire & Flower
Holdings Corp. (TSX: FAF) (OTCQX: FFLWF) ("FFHC" or the
"Company") wishes to provide additional information in
respect of the events and circumstances that led to the withdrawal
of certain forward-looking information contained in the Company's
prior disclosure. Prior to the Company's filing of its management
discussion and analysis for the thirteen and twenty-six weeks ended
August 1, 2020 (the "Q2
MD&A"), the Company's public disclosure included
forward-looking information that the Company projected it would
have 78 operating stores by the end of its fiscal 2020 year and be
cash flow positive by the second half of its fiscal 2020 year (the
"FLI").
In the Q2 MD&A, the Company disclosed that its projected
store count would be less than the number previously included in
the FLI and that it does not intend to provide future
forward-looking information with respect to its anticipated number
of operating stores. In withdrawing the FLI, the Company considered
a number of events and circumstances, including the following:
- Construction on certain of the Company's anticipated
Ontario stores commenced in
February 2020 with expected
completion in April 2020. As a result
of COVID-19 related construction delays, construction of the first
stores were not completed until May and June
2020. Additionally, commencing in June 2020, the Company received revised licensing
timelines from the Alcohol and Gaming Commission of Ontario that indicated that the licensing of
certain stores would be delayed beyond the Company's original
forecast.
- In Saskatchewan, the Company's
previous projection of store counts was informed by the province's
announcement in October 2019 that it
would commence open licensing by September
2020. The Company assumed that municipalities in
Saskatchewan would develop a
regulatory framework for cannabis retailers that would allow
retailers (like the Company) to construct retail cannabis stores
and be ready for operations by the time the open licensing process
commenced. By July 2020, municipal
regulatory regimes in the province were still in development,
resulting in delays in the opening of cannabis retail stores in
certain municipalities where the Company had forecasted having
stores open prior to the end of its fiscal 2020 year.
- In Manitoba, the Company
expected that the timeline to obtain the necessary permits and
licences and to secure the requisite real estate to commence
operations would be similar to timelines in other provinces.
However, the Company experienced delays from the applicable
regulatory bodies with respect to the granting of certain licences
and permits. Additionally, the Company determined that the
commercial real estate market in Manitoba was different than what the Company
had experienced in other jurisdictions, particularly with respect
to the negotiation of leases which could be terminated by the
Company on a shorter notice period in the event of licensing
delays. Accordingly, the Company decided to delay the entering into
of certain leases until there was greater certainty with respect to
the licensing of stores in Manitoba.
- In British Columbia, the
Company experienced a longer than expected delay in receiving
permits to construct certain stores in Vancouver. Although the Company received
approval in principle for two Vancouver stores in July 2020, the Company experienced further delays
in obtaining building permits for such locations. As a result of
the experience with the applicable regulatory bodies in
British Columbia, the Company
determined that regulatory approval would take longer than
initially anticipated.
As the Company's cash flow is impacted by the number of
operating retail stores, the delays to the opening of additional
retail cannabis stores motivated the Company to withdraw the FLI
with respect to timing of when the Company anticipates being cash
flow positive.
Upon completion of the Company's previously announced proposed
acquisition of Friendly Stranger Holdings Corp., the Company is
expected to have 66 licensed cannabis retail stores operating
across Canada and an additional 9
stores formally admitted to the queue for licensing in Ontario. The Company is targeting further
growth of licensed cannabis stores through additional pending
applications for retail store licences in Manitoba, Saskatchewan, Alberta and British
Columbia.
This press release is being issued at the request of the Ontario
Securities Commission and in connection with a continuous
disclosure review of the Company.
About Fire & Flower
Fire & Flower is a leading purpose-built, independent
adult-use cannabis retailer poised to capture significant
Canadian market share. The Company guides consumers through the
complex world of cannabis through education-focused, best-in-class
retailing while the HifyreTM digital platform and
SparkTM program connect cannabis consumers with the
latest cannabis products and deliver cutting edge insights into
evolving consumer behaviours. The Company's leadership team
combines extensive experience in the cannabis industry with strong
capabilities in retail operations.
Fire & Flower Holdings Corp. owns all issued and outstanding
shares in Fire & Flower Inc., a licensed cannabis retailer that
owns cannabis retail store licences in the provinces of
Alberta, Saskatchewan, Manitoba and Ontario and the Yukon territory.
Through its strategic investment with Alimentation Couche-Tard
Inc., the Company has set its sights on the global expansion as new
cannabis markets emerge.
More information on Fire & Flower can be found at
www.fireandflower.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
This news release contains certain
forward-looking information within the meaning of applicable
Canadian securities laws ("forward-looking statements"). All
statements other than statements of present or historical fact are
forward-looking statements. Forward-looking statements are often,
but not always, identified by the use of words such as
"anticipate", "achieve", "could", "believe", "plan", "intend",
"objective", "continuous", "ongoing", "estimate", "outlook",
"expect", "project" and similar words, including negatives thereof,
suggesting future outcomes or that certain events or conditions
"may" or "will" occur. These statements are only
predictions. Forward-looking statements in this news
release include, but are not limited to, statements in respect of
the Company's proposed acquisition of Friendly Stranger Holdings
Corp. and the Company's anticipated number of operating
stores.
Forward-looking statements are based on the opinions and
estimates of management of Fire & Flower at the
date the statements are made based on information then available to
the Fire & Flower. Various factors and
assumptions are applied in drawing conclusions or making the
forecasts or projections set out in forward-looking statements,
including with respect to the closing of the Transaction on the
terms described herein or at all. Forward-looking statements
are subject to and involve a number of known and unknown,
variables, risks and uncertainties, many of which are beyond the
control of Fire & Flower, which may cause
Fire & Flower's actual performance and results to
differ materially from any projections of future performance or
results expressed or implied by such forward-looking statements.
Such factors, among other things, include: final
regulatory and other approvals or
consents; fluctuations in general macroeconomic
conditions; fluctuations in securities markets; the impact of the
COVID-19 pandemic; the ability of the
Company to successfully achieve its business objectives
and political and social uncertainties.
No assurance can be given that the expectations reflected in
forward-looking statements will prove to be correct. Although
the forward-looking statements contained in this news release are
based upon what management of the Company believes, or believed at
the time, to be reasonable assumptions, the Company cannot assure
shareholders that actual results will be consistent with such
forward-looking statements, as there may be other factors that
cause results not to be as anticipated, estimated or intended.
Readers should not place undue reliance on the forward-looking
statements and information contained in this news release.
Additional information regarding risks and uncertainties relating
to the Company's business are contained under the heading "Risk
Factors" in the Company's annual information form dated
April 29, 2020 and the heading "Risks
and Uncertainties" in the management discussion and analysis for
the thirteen and twenty-six weeks ended August 1, 2020 filed on its issuer profile on
SEDAR at www.sedar.com.
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein.
SOURCE Fire & Flower Holdings Corp.