Couche-Tard, Fire & Flower to expand co-location pilot
Fire & Flower is building on its operational partnership with Alimentation Couche-Tard, announcing plans to open new Fire & Flower cannabis retail stores adjacent to existing Circle K stores in new markets across Canada.
The initial Circle K co-located store pilot program launched in Alberta in July 2020 with a store each in Calgary and Grand Prairie. The plan utilized ACT's existing lease footprint to build a co-located, small-scale Fire & Flower retail operation that the companies said "delivers strong economies of scale for both companies due to the opportunity to incorporate Fire & Flower's industry-leading Hifyre technology and analytics platform."
Now the expanded program will see new co-located retail stores open over the next several months in Alberta, Saskatchewan and Manitoba. In a release, Fire & Flower said the "enhanced agreement also allows for the opportunity to further expand the program into additional high-value markets including Ontario and the United States."
However, the cannabis retailer is already setting up shop in Toronto's Leslieville neighbourhood, with a Fire & Flower "coming soon" sign located next door to a new Circle K that opened this year in the foot of a recently built condo development.
"Alimentation Couche-Tard has been an invaluable partner to Fire & Flower as we built out Canada's largest retail network of legal cannabis products and services over the past two years," Trevor Fencott, CEO of Fire & Flower, said in a release dated October 5, 2021. "Our success in Canada, and now as we enter into the U.S., is directly attributable to the powerful consumer data and analytics technology that we have successfully employed in each of our stores through our Hifyre™ technology platform."
The cannabis retailer is leveraging consumer data and "strategically working with our key partners to capture this data and, together, enhance our collective cannabis operations, allowing Fire & Flower to advance our 'asset-light' business model to further support our financial growth."
In July 2019, 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. Couche-Tard 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.
"As we continue to advance our relationship with Couche-Tard, we are driving a new level of service to our extensive operational footprint in Canada and beyond," says Fencott. "We are able to leverage the power of Hifyre to allow these small co-located stores to run efficiently. The advanced analytics we provide allows stores to operate and manage inventory at maximum efficiency."
Fire & Flower now has more than 90 corporate-owned stores in its network. Through the strategic investment of Alimentation Couche-Tard, the company aims to expand globally as new cannabis markets emerge.