Couche-Tard moves into cannabis with Fire & Flower stake

Alimentation Couche-Tard Inc. has agreed to make a strategic investment in Fire & Flower Holdings Corp. of Edmonton, which will use the funds to develop its Hifyre digital retail platform and expand its network of cannabis retail stores.

The companies say Couche-Tard's initial investment would give it rights to 9.9% of Fire & Flower's equity, with the potential to increase its stake to 50.1% in return for a total of about $380 million in growth capital.

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Alimentation Couche-Tard is one of North America's largest operators of convenience stores and gas bars, primarily under the Circle K global brand and under the Couche-Tard banner in its home province of Quebec.

Couche-Tard chief executive Brian Hannasch says the investment will enable the Laval-based retail chain to accelerate its move into the cannabis sector.

The companies say an indirect subsidiary of Couche-Tard will initially buy about $26 million of convertible debt securities that can be converted to 24.3 million common shares at a price of $1.07 each, representing 9.9% of equity.

Fire & Flower's stock is currently listed on the TSX Venture Exchange but it has received conditional approval to list its shares on the Toronto Stock Exchange concurrent with the transaction.