Fire & Flower Holdings (FAF.T) bought Friendly Stranger Holdings in an all-share deal today, including 11 cannabis retail stores in Ontario with another four that should be licensed by the end of Q4, 2020, according to a press release.
When the deal closes Fire and Flower will have 66 stores total, including 18 in Ontario and nine stores being licensed, giving the company the largest footprint in both Ontario and Canada.
“The acquisition of Friendly Stranger is transformative for Fire & Flower and is a product of our financially disciplined approach to aggregation in the sector. It will immediately put us in a leading position in the major Ontario market, and it allows us to increase the potential of the acquired stores using the proprietary capabilities of our Hifyre™ digital retail and analytics platform” said Trevor Fencott, chief executive officer of Fire & Flower.
The company intends to pick up the licenses to operate the 11 Friendly Stranger, Hotbox and Happy Dayz branded cannabis retail stores in Ontario, including four in Toronto’s busy cannabis market. The stores will keep their brand names. The share purchase agreement has the company issuing Friendly Stranger shareholders an aggregate of 1,117,750 common shares of FFHC.
“Friendly Stranger is very pleased to be joining Fire & Flower, the leader in cannabis retail across the country. Friendly Stranger will benefit from the best practices set by the market leader including their technology-enabled approach and the scale brought from their operations. Through multiple brands in the Ontario market, Fire & Flower will benefit from the ability to serve diverse customer segments in the growing cannabis market,” said James Jesty, president of Friendly Stranger.
The share purchase agreement also holds provisions to hold 8,339,557 consideration shares in escrow after closing, which will be issued to former Friendly Stranger shareholders when FAF has acquired all the applicable authorizations for the cannabis stores at Dundas, Midland and Cambridge, Ontario.