Fire & Flower Holdings Corp (TSX: FAF) this morning announced that it is acquiring that of Friendly Stranger Holdings Corp. The two firms entered a definitive arrangement for the transaction, which will see all 11 operating Friendly Stranger locations acquired by Fire & Flower, along with 4 pending locations that are currently awaiting licensing.
The chain of retail cannabis stores is to be acquired for total consideration of $23.0 million via the issuance of 31,117,750 common shares of the issuer. 8,339,557 of these common shares are to be placed into escrow immediately following the closing of the arrangement, and be released subject to certain conditions pertaining to the four pending locations.
Loctions to be acquired currently operate under three separate banners, including Friendly Stranger, Hotbox, and Happy Dayz. The locations will continue to operate under these banners once the acquisition is completed.
Once closed, Fire & Flower is expected to have a total of 66 stores in operation, giving the company the largest footprint in the country. 18 of those are located in the province of Ontario, while 9 are in queue for final licensing, all within Ontario as well.
The company in the meantime has entered into a loan agreement with Friendly Stranger, whom can borrow up to $2.0 million from Fire & Flower at a rate of 1.0% per annum. The funds are to be used for the purchase of certain licensed cannabis stores within Ontario. The loan is set to mature March 31, 2020, and will see the interest rate rise to 13.0% should the company not be acquired by Fire & Flower.
The acquisition of Friendly Stranger is currently set to close in the fourth quarter of 2020.
Fire & Flower Holdings last traded at $0.74 on the TSX.
Information for this briefing was found via Sedar and Fire and Flower Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.