Completion of the Acquisition Solidifies Fire & Flower's
National Leadership Position, Creating the Largest Footprint for a
Canadian Cannabis Retailer
/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR
DISTRIBUTION TO UNITED STATES WIRE
SERVICES/
TORONTO, Dec. 2, 2020 /CNW/ - Fire & Flower Holdings
Corp. (TSX: FAF) (OTCQX: FFLWF) ("FFHC") and its
wholly-owned subsidiary Fire & Flower Inc. (collectively,
"Fire & Flower" or the "Company") is pleased to
announce the closing of the previously announced acquisition of all
of the issued and outstanding shares of Friendly Stranger Holdings
Corp. ("FSHC") by Fire & Flower (the "Acquisition").
FFHC now owns and operates, directly or indirectly, a total
of 69 stores under four distinct retail banners, including 21
licensed stores in Ontario and an
additional 9 stores in Ontario
admitted to the queue for licensing, giving the Company the largest
footprint in both Ontario and
Canada.
Closing of the Acquisition was completed following receipt of
all required third-party and regulatory approvals (including the
conditional approval of the Toronto Stock Exchange and the Alcohol
and Gaming Commission of Ontario
(the "AGCO")).
As consideration for the Acquisition, the Company issued to the
shareholders of Friendly Stranger an aggregate of 31,297,342
common shares of FFHC (the "Consideration Shares"), subject
to certain holdbacks set out in the share purchase agreement
between the Company, FSHC and certain security holders of FSHC.
"This deal rapidly expands our network in Canada's largest market and provides us with
increased scale that will help us achieve our goal of positive
operating EBITDA," said Trevor
Fencott, Chief Executive Officer of Fire & Flower. "It
brings the iconic Friendly Stranger, Happy Dayz and Hotbox banners
into the Fire & Flower portfolio and provides us with
additional tools for growth."
"There is remarkable depth to this combined company," shared
James Jesty, President of Friendly
Stranger. "This is an unparalleled opportunity to connect our
legacy consumer base with the strength of a national player under
Fire & Flower's technology-enhanced retail model."
FSHC holds, directly or indirectly, licences to operate 13
cannabis retail stores currently operating in the province of
Ontario under the "Friendly
Stranger", "Hotbox" and "Happy Dayz" brands, including four in the
key urban market of Toronto. The
stores will continue to operate under the Friendly Stranger, HotBox
and Happy Dayz brands.
Pursuant to the terms of the Acquisition, an aggregate of
4,854,369 Consideration Shares are being held in escrow and will,
subject to certain conditions, be released to the former
shareholders of Friendly Stranger.
Advisors
Stifel GMP is acting as financial advisor to
Fire & Flower and Dentons Canada LLP is acting as its legal
advisor. Broderick Capital is acting as financial advisor to
Friendly Stranger and Chitiz Pathak LLP is acting as legal
advisor.
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.
About Friendly Stranger
A long-standing retail
champion of cannabis culture and iconic brand, Friendly Stranger
Holdings Corp. is dedicated to ongoing long-term contribution
within the Canadian cannabis market through the launch of numerous
retail locations across the country. With strategic investments,
such as acquiring the other iconic cannabis culture brands Happy
Dayz and Hotbox, FSHC has built a portfolio of brands that resonate
with cannabis consumers.
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 issuance of licences to stores in the AGCO's queue.
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.