Fire And Flower Holdings Corp - FFLWF stock
Company Details[edit]
Fire & Flower Holdings Corp. (OTC: FFLWF, TSX: FAF) is an independent cannabis wholesaler and retailer that operates across Canada and the United States. The company operates through the following segments: Retail, Wholesale and Logistics, and Digital Platform. The digital department develops the company’s digital experiences and retail analytical insights. It sells products and services provided by the analytics platform, CannDeliv logistics platform, and Hifyre digital and PotGuide content platform. The retail segment sells cannabis products and accessories to the adult-use market in the states where cannabis is legalized and the firm is licensed. The wholesale and logistics department distributes the underlying products to its retail outlets and other licensed retailers. The company’s products are offered under unique brands including Fire & Flower, Friendly Stranger, Happy Dayz, and Hotbox. As of July 30, 2022, Fire & Fly owned and managed 91 licensed cannabis retail stores and 1 accessory store. The company was incorporated in December 2017 and is headquartered in Toronto, Canada. It is publicly traded on TSX under the FAF symbol and on OTC markets under the FFLWF ticker symbol.[1]
Business Operations[edit]
Fire & Flower is an omnichannel consumer retail and technology operator with more than 90 corporate-owned stores in its network portfolio. It leverages its fully-owned technology development subsidiary, Hifyre Inc., to consistently develop and modify its proprietary retail operations model while advancing additional independent high-margin revenue streams. The company helps cannabis consumers navigate the complex world of cannabis by providing top-class retailing and improving their experience through the HifyreTM digital and analytics platform. The firm has its eyes on global expansion to capture emerging cannabis markets through the strategic investment of Alimentation Couche-Tard Inc. (owner of Circle K convenience stores). Fire & Flower leverages Couche-Tard’s high-traffic real estate and lower cost of capital to develop a high-margin franchise network that complements the company’s operated stores across Canada, the US, and other parts of the world.[2]
The Company’s material wholly-owned subsidiaries are Fire & Flower Inc. (“FFI”), Hifyre, Hifyre US, Inc., PGED Corp., Pineapple Express Delivery Inc. (“Pineapple Express Delivery”), 10926671 Canada Ltd. (operating as Open Fields Distribution), 11180703 Canada Ltd. (operating as Hi-Line Ventures), 13318184 Canada Inc. and Friendly Stranger Holdings Corp.[3]
The company controls technology, loyalty, retail, wholesale, and delivery to generate more value and grow organically through its established segments as illustrated below:
Hifyre. It is the technology segment that knits the firm’s retail platform, logistics software, advertising network & media network.
Spark Perks. Spark Perks is the company’s cross-platform loyalty program, where members create single account accounts through which they access a variety of services, perks, discounts, and more.
Fire & Flower. It is the flagship brand that incorporates the firm’s r portfolio of physical, franchise, digital channels, and delivery distribution channels.
Open Fields. Open Fields is Fire & Flower’s retail wholesale operation in Canada. It currently distributes cannabis and accessories within the country.
Pineapple Express Delivery is the company’s medical and retail delivery business. It incorporates deliveries for licensed producers, government stores, and retailers.[4]
News for Investors[edit]
The global cannabis market is forecasted to hit $62 billion by 2026 from $31 billion in 2021, with a CAGR of 15%. The cannabis market in Canada is expected to reach $6.7 billion in 2026 from $4 billion, with an 11% CAGR, while the U.S. market is anticipated to record $48 billion from $25 billion with a CAGR of 14%. Fire & Flower is determined on grabbing global cannabis retail opportunities via its timely dive into the federally-legal Canadian market and early brand entry into the US.[5]
On November 7, 2022, Fire & Flower announced a significant development in a strategic relationship with Alimentation Couche-Tard Inc., owner of Circle K, via license agreements to use the HifyreTM digital retail platform and Spark PerksTM member program, each proprietary to Fire & Flower's subsidiary, Hifyre Inc. ("Hifyre"), at four additional cannabis stores co-located with Circle K and the proposed acquisition of two cannabis retail stores in Kingston, Ontario. Stéphane Trudel, Chief Executive Officer of Fire & Flower added that the strategic move would enhance the company’s commitment to providing a fast and convenient cannabis shopping experience with the HifyreTM technology platform.[6]
Back on October 18, the company announced its decision to enter a private placement and loan agreement with Alimentation Couche-Tard Inc. ("ACT"). The pair entered into (a) a loan agreement in respect of an $11,000,000 principal amount loan to the Company; and (b) a subscription agreement to purchase common shares of the Company for aggregate proceeds of approximately $5,000,000 (the "Private Placement" and collectively with the Amendments, the "Warrant and Share Transaction").[7]
The company released its second quarter 2022 fiscal and operational results on September 13, 2022. Highlights of the presentation include:
- Revenue of $40.7 million, representing a decrease of 6% from $43.3 million in the same period last year
- Gross profit was $9.7 million compared to $16.2 million in 2021
- Adjusted EBITDA of negative $6.0 million
- Net loss was $21.6 million versus a net profit of $19.5 million in the comparative quarter of 2021
The management attributed the reduction in revenue to increased competition from new licenses issued and intense pricing pressures in the retail cannabis market.[8]
Management Team[edit]
Stephane Trudel, Chief Executive Officer
- The current CEO of Fire & Flower.
- He previously worked at Couche-Tard as a Vice president, of Opérations, Québec Ouest.
- Mr. Trudel attended The University of Sherbrooke.
John Chou, Interim Chief Financial Officer
- Before joining Fire & Flower as interim CFO, Mr. Chou held the position of Chief Financial Officer of The Flowr Corporation, Chief Financial Officer of Terrace Global, Vice President of Finance of Gran Colombia Gold Corp., and Vice President of Finance of Frontera Energy Corp.
Other executive members include Mathew Hollingstead, Chief Innovation Officer, Mathew Anderson, EVP, Legal, compliance and Business Affairs, and Chris Bolivar, EVP, Commercial and Growth.[9]
CODE OF BUSINESS CONDUCT AND ETHICS[edit]
Fire & Flower Holdings Corp. is dedicated to carrying out its business operations with utmost honesty, and integrity, and under top ethical and legal standards. The code of business conduct and ethics provides a set of standards to be met by each of the company’s directors, employees, consultants, officers, and contractors. The company also expects its constituents to work towards promoting respect towards internationally recognized human rights as stipulated in the United Nations Universal Declaration of Human Rights.[10]
FFLWF Stock Information[edit]
As of 10/31/2022, there were 45,518,025 shares of FFLWF stock outstanding.[11]
References[edit]
- ↑ seekingalpha.com/symbol/FFLWF – Company Profile.
- ↑ About Fire & Flower - investors.fireandflower.com.
- ↑ Company Overview and Strategy - Fire & Flower Holdings Corp. Management Discussion and Analysis for the Thirteen and Twenty-six Weeks ended July 30, 2022, Page 2.
- ↑ Deliver Cannabis to the World – Investor Presentation, Page 8. Retrieved on 11/25/2022.
- ↑ Deliver Cannabis to the World – Investor Presentation, Page 14. Retrieved on 11/25/2022
- ↑ Fire & Flower and Alimentation Couche-Tard Expand Strategic Relationship Through Six Additional Cannabis Retail Store Locations – Yahoo Finance News.
- ↑ Fire & Flower Announces Private Placement and Loan Agreement for $16 Million with Alimentation Couche-Tard – Yahoo Finance News.
- ↑ FIRE & FLOWER ANNOUNCES SECOND QUARTER FISCAL 2022 FINANCIAL AND OPERATIONAL RESULTS – FireandFlower.com
- ↑ Our Management Team – Fire & Flower website. Accessed on 11/26/2022.
- ↑ FIRE & FLOWER HOLDINGS CORP. CODE OF BUSINESS CONDUCT AND ETHICS, page 1 – FFLWF website. Accessed on 11/26/2022.
- ↑ FFLWF security details – OTC Markets.
OTC Symbol: FFLWF
