Fire & Flower To Enter US Market Via Licensing Structure With American Acres, Little Details Provided

Fire & Flower Holdings (TSX: FAF) evidently is entering the US market. The firm announced this morning that it has effectively found a way in which it can legally enter the US cannabis market while remaining listed on the Canadian big board, thanks to some strategic maneuvering.

The arrangement will see the company enter into private agreements with a private Canadian company, which currently operates as American Acres Managers. Under the agreement, the company will effectively license its store brand, along with its operating system and HiFyre tech, to a group of dispensaries located in California, Arizona, and Nevada.

The transaction reportedly provides “a discounted path to corporately-owned cannabis retail stores in major markets in the United States.” This is done through the licensing arrangements, which will provide the company the option to acquire American Acres, a US operator, at a discount to fair market value. The option is to be exercised upon a US legalization event.

While the first Fire & Flower branded retail store is to open in Palm Springs in the first half of 2021, little additional information was provided. Financial aspects of the transaction were also not provided, with the company not even providing a store count for the operations that are to span three states.

Fire & Flower Holdings last traded at $1.40 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.

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