Couche-Tard deepens Fire & Flower partnership with new Master Licensing Agreement
Alimentation Couche-Tard Inc. (ACT) and Fire & Flower are entering into a Master License Agreement that will advance their relationship and support the cannabis consumer retail and technology platform to grow its footprint.
"With the signing of this agreement, we have achieved another important step forward with our strategic partner, Couche-Tard. We continue to work closely together to build a sustainable growth engine, leveraging Couche-Tard's high quality real estate assets, retail operations expertise and capital, accelerating our path to profitability and goal of free cash flow," said Stéphane Trudel, CEO of Fire & Flower.
"Successful retail is built on delighting our customers with great locations, people and products. Today, we have expanded our ability to grow the Fire & Flower network, in Canada and other international legal cannabis markets by adding this scalable building block that we can further refine together in the first federally legal cannabis market in the world."
READ: All fired up: An interview with Fire & Flower CEO Stéphane Trudel
As part of the deal:
- Fire & Flower will have the exclusive right of first opportunity to negotiate with Couche-Tard with respect to entering new retail cannabis businesses and franchise arrangements in Canada, as well a potential retail expansion to additional legal cannabis markets outside of Canada.
- Couche-Tard has exclusively committed to developing Fire & Flower branded retail cannabis stores in Ontario under the Master Licensing Agreement.
- The first five Fire & Flower branded retail cannabis stores will be recently opened co-located stores, adjacent to Circle K convenience stores in the Greater Toronto Area that are currently operating as MC Cannabis Inc., which is an indirect wholly-owned subsidiary of Couche-Tard, and will be re-branded to Fire & Flower.
"Couche-Tard is pleased to have entered into a Master License Agreement with Fire & Flower The Hifyre digital retail platform, including the Spark Perks membership program and the Spark Marketplace app, will bring a distinct competitive advantage to our cannabis stores," said Steve Pitts, Couche-Tard's vice-president of operations, Central Canada. "The current co-located cannabis stores adjacent to Circle K locations and anchored by convenience stores, fuel and car wash offerings are showing growth and we look forward to combining this with the recognized Fire & Flower brand and technology-enabled shopping experience to make it easy for customers."
Moving forward, Fire & Flower will leverage Couche-Tard real estate footprint and resources to develop licensee stores. In turn, Fire & Flower will have the opportunity to expand its system sales, brand presence and the Hifyre digital retail platform in Canada and, through the exclusive right of first opportunity, to participate alongside Couche-Tard in a potential expansion to additional legal cannabis markets outside of Canada. As well, the company will expand the reach of it Spark Perks membership program and industry-first Spark Marketplace App.
"As we look to markets opening in the United States and Europe, we will work alongside our strategic partner to expand Fire & Flower to international markets," said Trudel, who served as SVP of operations for Couche-Tard before taking on the role of CEO at Fire & Flower in June 2022.
The partnership dates back to July 2019, when Couche-Tard announced its strategic investment in Fire & Flower with a mandate to provide the Canadian cannabis retailer with additional capital to further accelerate its expansion strategy. ACT invested approximately $26 million in the form of unsecured convertible debentures to obtain a 9.9% ownership interest in Fire & Flower on a fully diluted basis. In April 2022, ACT announced it was increasing its ownership of the Canadian cannabis retailer through the exercise of warrants.
Today, Fire & Flower has more than 90 cannabis retail stores operating in its network through the Fire & Flower, Friendly Stranger and Happy Dayz, Firebird Delivery and Spark Perks brands.
