Fire & Flower Holdings Corp. (“Fire & Flower” or the “Company”) (TSX: FAF) (OTCQX: FFLWF), today announced that it has entered into agreements (the “Strategic Agreements”) with a Canadian private company, operating as “American Acres Managers” (“American Acres”) including an agreement to license its Fire & Flower brand, store operating system and Hifyre technology platform for dispensaries in California, Arizona and Nevada as the Company aims to deliver its best-in-class technology and retail functionality in these competitive, high growth markets.
The Strategic Agreements provide Fire & Flower with a discounted path to corporately-owned cannabis retail stores in major markets in the United States. Under the Strategic Agreements, in recognition of the value of the Fire & Flower license, Fire & Flower will have the option to acquire American Acres at a discount to fair market value. The acquisition is expected to occur upon the 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.
“Since becoming Canada’s largest retail network for legal cannabis products and services, we have strongly positioned our brand, operating system and technology to successfully enter key international markets where we believe our platform would be strongly valued. Due to the rapid success of our operational model in Canada, the Fire & Flower brand is poised to become a key player in the U.S. cannabis industry, where the demand for incorporating technologically advanced systems in cannabis retail has never been greater. Our Hifyre technology has surpassed our competitors’ offerings by streamlining the customer experience and driving greater margins, and places the Fire & Flower brand in a unique position to play a leading role in competitive U.S. cannabis markets,” commented, Trevor Fencott, Chief Executive Officer of Fire & Flower.
Fencott continued, “Securing an agreement that will rapidly place Fire & Flower licensed stores in the United States is the first step in executing our vision well ahead of federal legalization in the United States. This strategic agreement is transformative in the sense that Fire & Flower will be one of the only cannabis retail brands with its flag flown internationally. We look forward to supporting American Acres on Fire & Flower brand store openings in some of the world’s largest cannabis markets.”
Fire & Flower anticipates the first branded store to be open in Palm Springs, California, during the first half of its fiscal 2021 year.
Highlights of the Strategic Agreements
- The Company has demonstrated strong operational success in the competitive, first federally legal market, and the Strategic Agreement allows for the opportunity to export successful model into U.S.
- Offers opportunity for the Fire & Flower brand and technology to enter into other U.S. cannabis markets.
- Provides discounted path to corporate-owned stores in major US markets.
- The Strategic Agreements provide for the licensing of the Fire & Flower brand, store operating system and Hifyre technology platform to American Acres on a royalty-free basis.
- Opportunity to leverage the Company’s proven technology to drive greater profitability in existing U.S. retail stores and sets stage for acquisitive growth strategy when legal.
- Proposed strategic entry into California aligns with Fire & Flower’s optimal operating model which includes:
- Direct relationships with product producers
- Private retail