/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR
DISTRIBUTION TO UNITED STATES WIRE
SERVICES/
Transformational acquisition will complete Fire &
Flower's proprietary technology stack and enable a true consumer
platform experience from customer acquisition through to
fulfillment via same-day delivery to customers
TORONTO, Dec. 9, 2021 /CNW/ - Fire & Flower Holdings
Corp. ("Fire & Flower" or the "Company")
(TSX: FAF) (OTCQX: FFLWF) and its wholly-owned subsidiary Hifyre™
Inc. ("Hifyre"), today announced entering into a definitive
agreement to acquire Pineapple Express Delivery Inc. ("Pineapple
Express"), Canada's largest
delivery and logistics company serving the cannabis sector (the
"Acquisition"). Upon completion of the Acquisition, Fire
& Flower will have all the necessary components in its business
to deliver a full consumer technology platform experience,
supported by a network of more than 100 retail stores and full
same-day delivery to cannabis consumers.
The addition of Pineapple Express to the family of Fire &
Flower properties will provide a clear value proposition to
Canadian cannabis consumers through unrivaled convenience and speed
of delivery at compelling prices due to efficiencies realized
through a distributed asset-light retail network.
Founded by seasoned delivery pioneer, Randy Rolph, Pineapple Express has quickly grown
to prominence as the largest player in the cannabis delivery space
– completing more than 40,000 deliveries per month to
recreational and medical cannabis customers across Canada. The addition of best-in-class
logistics and delivery management expertise will enable Fire &
Flower and Hifyre to provide delivery software and fulfillment
technology to its existing network and in the U.S. and European
markets.
"The Acquisition of Pineapple Express will complete our
proprietary technology stack and allow us to deliver a seamless
customer experience from online customer acquisition and discovery
at our top-of-funnel sites such as PotGuide.com and Wikileaf.com,
through a personalized online or in-store shopping experience
powered by Hifyre and our Spark Perks™ program and now culminating
in best-in-class fulfillment service right to our customers' doors
through Pineapple Express. To our knowledge, this complete cannabis
consumer technology platform is the first of its kind in the legal
cannabis industry and will power our asset-light retail strategy,
not just in Canada but across
North America. We see this as an
example of the advantages of building, testing and hardening
technology and systems in the federally legal Canadian market
before deploying them to the U.S. and other emerging markets," said
Trevor Fencott, Chief Executive
Officer of Fire & Flower.
Fencott continued, "Cannabis customers shopping in the illegal
market are accustomed to purchasing products online which are
delivered directly to their door, often in the same day. The
Acquisition of Pineapple Express will provide a clear value
proposition to cannabis customers who are shopping in the legal
market and offer a better solution and experience for those still
purchasing from the illegal market. With our cannabis consumer
technology platform in place and our strategic partnership with
Alimentation Couche-Tard theat includes existing in future licensed
co-located stores, we are well positioned to successfully execute
on our asset-light strategy in new markets we enter, further
driving shareholder value."
"Pineapple Express is thrilled to be joining Fire & Flower
and Hifyre and we look forward to working with the team to continue
to scale our delivery capabilities across Canada and the U.S.," said Randy Rolph, Founder and Chief Executive Officer
of Pineapple Express. "In looking at what was going to allow our
company to grow in a way that fulfills our ultimate vision, it was
clear that Fire & Flower, with its strategic partnership with
Alimentation Couche-Tard, and its focus on building a global,
future-focused, cannabis consumer technology platform was the right
partner for us in our next evolution."
A summary of the anticipated benefits of the Acquisition
include:
Customer Acquisition Channels
- Fire & Flower's newly acquired online cannabis platforms,
PotGuide.com and Wikileaf.com, along with retail brands and partner
branded online dispensaries, significantly expand the Company's
e-commerce platform and collectively drive cannabis customers into
its data-driven retail network, culminating in an expanded
opportunity to collect cannabis consumer behaviors and deliver an
enhanced retail experience.
Retail Fulfillment Network & Distribution Centres
- Cannabis products will be fulfilled through the Company's
retail network of more than 100 stores that will serve as
distribution nodes, effectively transforming them from traditional
brick-and-mortar shops into last-mile fulfillment outposts in
communities across North America.
The Company anticipates adding cannabis retail licenses to select,
existing Pineapple Express distribution centres to fulfill delivery
direct to consumers in major urban centres. In addition, licensed
locations that are being built adjacent to Circle K stores will
provide another layer to the Company's distributed fulfillment
network, further supporting the Company's strategy to operate
high-margin revenue channels on an asset-light basis.
Delivery & Logistics
- Pineapple Express will enable same-day delivery in key markets
across Canada, leveraging their
existing fleet of vehicles, drivers and dispatch personnel.
Pineapple Express is powered by proprietary technology, including
the CannDeliv platform, which will be added to the Hifyre
technology stack.
Total consideration for the acquisition of Pineapple Express is
payable by the Company by way of assumption and repayment of
approximately $5.3 million in cash
debt owed by Pineapple Express and the issuance of up to
approximately 1,126,761 common shares of Fire & Flower,
(subject to adjustment in accordance with the terms of the
Acquisition, subject to Pineapple Express achieving certain
performance-based milestones in the fiscal 2022 year). Pineapple
Express revenue for the trailing 12-month period ended October 31, 2021 was approximately $10 million.(1)
The Acquisition will be completed by way of three-cornered
amalgamation with a newly incorporated subsidiary of Hifyre.
Completion of the Acquisition is subject to the satisfaction or
waiver of customary closing conditions, including the approval of
the TSX and approval by the shareholders of Pineapple Express at a
shareholders' meeting to be convened in January 2022. The Acquisition is expected to
close in Q1 2022.
To learn more about Pineapple Express,
visit https://pineappleexpressdelivery.com/.
About Fire & Flower
Fire & Flower is a leading, technology-powered, adult-use
cannabis retailer with 100 corporate-owned stores in its network.
The Company leverages its wholly-owned technology development
subsidiary, Hifyre Inc., to continually advance its proprietary
retail operations model while also providing additional independent
high-margin revenue streams. Fire & Flower guides consumers
through the complex world of cannabis through education-focused,
best-in-class retailing while the HifyreTM digital
retail and analytics platform empowers retailers to optimize their
connections with consumers. The Company's leadership team combines
extensive experience in the technology, cannabis and retail
industries.
Through the strategic investment of Alimentation Couche-Tard
Inc. (owner of Circle K convenience stores), the Company has set
its sights on global expansion as new cannabis markets emerge and
is poised to expand into the United
States when permitted through its strategic licensing
agreement with Fire & Flower U.S. Holdings upon the occurrence
of certain changes to the cannabis regulatory regime.
Fire & Flower is a multi-banner cannabis retail operator
that owns and operates the Fire & Flower, Friendly Stranger,
Happy Dayz and Hotbox brands. Fire & Flower Holdings Corp. owns
all issued and outstanding shares in Fire & Flower Inc. and
Friendly Stranger Holdings Corp., licensed cannabis retailers that
own and operate cannabis retail stores in the provinces of
Alberta, Saskatchewan, Manitoba, British
Columbia and Ontario, and
the Yukon territory.
To learn more about Fire & Flower, visit
www.fireandflower.com.
- Preliminary and unaudited financial results are subject to
customary financial statement procedures by the Company and its
auditors. Actual results could be affected by subsequent events or
determinations. While the Company believes there is a reasonable
basis for these preliminary financial results, the results involve
known and unknown risks and uncertainties that may cause actual
results to differ materially. These preliminary fiscal results
represent forward-looking information. See "Cautionary Statement
Regarding Forward-Looking Information" and "Financial
Outlook".
FINANCIAL OUTLOOK
This news release contains a
financial outlook within the meaning
of applicable Canadian securities laws. The financial
outlook has been prepared by management of Pineapple Express and
the Company to provide an outlook for the Pineapple Express'
revenue for the trailing 12 month period ended October 31, 2021 and may not be appropriate for
any other purpose. The financial outlook has been prepared based on
a number of assumptions including the assumptions discussed under
the heading "Forward Looking Information" below. The actual results
of Pineapple Express' operations for any period will likely vary
from the amounts set forth in these projections and such variations
may be material. The Company and its management believe that the
financial outlook has been prepared on a reasonable basis. However,
because this information is highly subjective and subject to
numerous risks, including the risks discussed under the heading
"Cautionary Statement Regarding Forward-Looking Information" below,
it should not be relied on as necessarily indicative of future
results.
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 press release include, but are not limited to, statements
in respect of completion of the Acquisition and the potential
benefits thereof to the Company and Pineapple Express' anticipated
revenues.
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 Acquisition 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 and Pineapple Express' 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: 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 and
Pineapple Express 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 30, 2021 and the heading "Risks
and Uncertainties" in the management discussion and analysis for
the quarter ended July 31, 2021 filed
on its issuer profile on SEDAR at www.sedar.com. The
forward-looking statements contained in this press release are made
as of the date of this press release, and the Company does not
undertake to update any forward-looking statements that are
contained or referenced herein, except in accordance with
applicable securities laws.
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein.
SOURCE Fire & Flower Holdings Corp.