Cannabis retailer Fire & Flower Holdings Corp. says it has received a court order for creditor protection under the Companies' Creditors Arrangement Act CCAA), reported The Canadian Press (CP) on Tuesday.
According to the report, the company had been pursuing additional financing to raise capital to fund its operations.
It says the board determined that it was in the best interests of the company to file an application for creditor protection following a review of its strategic options and a consideration of all of its available alternatives, reported CP.
The newspaper also reported that in order to fund the CCAA proceedings and other short-term working capital requirements, Fire & Flower says it has signed an agreement with an affiliate of Alimentation Couche-Tard Inc. (ACT) for a $9.8-million debtor-in-possession loan.
ACT and Fire & Flower have had an ongoing working relationship. The cannabis retailer operates under multiple banners including Fire & Flower, Friendly Stranger and Firebird Delivery.
Fire & Flower entered into a Master License Agreement with the multinational c-store operator back in April, meant to advance its relationship with ACT and support the cannabis consumer retail and technology platform. As part of the agreement, Couche-Tard committed to developing Fire & Flower branded retail cannabis stores in Ontario.
[Read more: “Couche-Tard deepens Fire & Flower partnership with new Master Licensing Agreement”]
As for the court protection, CP reported that the company says its board will remain in place and management will remain responsible for the day-to-day operations, under the oversight of a court-appointed monitor while it works to streamline operations and conduct a sales process for the business.
The cannabis retailer caught CSNC's attention a few years ago with ACT's investment in the company. Fire & Flower CEO, Stéphen Trudel, graced the cover of our January/February issue this year. CSNC spoke to him about his budding career in the cannabis industry and Couche-Tard's investment.