Fire & Flower Contracts $30 Million Secured Debt Facility with Circle K Owners Alimentation Couche-Tard

The objective to drive expansion via financing displays further alignment among the strategic partners as well as the ability to execute the consumer digital platform.

The Company, through its wholly-owned subsidiary Fire & Flower Holdings Corp., (TSX: FAF) (OTCQX: FFLWF), announced today that it has entered into a loan agreement (the “Agreement”) with 2707031 Ontario Inc., an indirectly entirely owned subsidiary of Alimentation Couche-Tard.

Fire & Flower Alimentation Couche-Tard Loan Terms

The loan agreement will verify that ACT shall supply a maximum overall amount of $30,000,000 to the Firm (the “Loan”).

The Loan will pay an interest rate of 8.0% per year, compounded quarterly, and mature on October 1, 2022, subject to the terms of the Agreement.

The Agreement sets forth the prepayment of amounts drawn from Fire & Flower’s net proceeds as of January 1, 2022, when ACT’s Series B Warrants will become exercisable.

The Company plans to use the funds borrowed under the Loan to expand its consumer digital platform and for other business purposes. The assets of the firm are used as security for the loan.

Fire & Flower

Fire & Flower is a leading, technology-powered, adult-use cannabis store with more than 100 corporate-owned locations. Hifyre Inc., the Company’s wholly-owned technology development firm, is used to continue to improve its proprietary retail operation model while also providing additional independent high-margin sources of income.

Fire & Flower offers education-focused, best-in-class retailing for marijuana consumers, while the Hifyre digital retail and analytics platform enables businesses to improve their customer connections. The Company’s leadership team combines extensive expertise in the technology, cannabis, and retail industries.

The firm has set its sights on worldwide expansion through the wise investment of Alimentation Couche-Tard (owner of Circle K convenience stores), and it is expected to enter the United States when permitted by its strategic licensing agreement with Fire & Flower US. Holdings, as new cannabis markets emerge and prepare to expand into the United States after certain changes.

“As we move forward in our development, we are excited to continue to leverage this relationship and further expand our co-located store program to deliver the most convenient shopping experience to our customers,” stated Fire & Flower CEO Trevor Fencott.

Fire & Flower is a multi-banner cannabis retail business that owns and runs the Fire & Flower, Friendly Stranger, Happy Dayz, and Hotbox brands.

Fire & Flower Holdings Corp. owns all outstanding shares in Fire & Flower Inc. and Friendly Stranger Holdings Corp., licensed cannabis shops that operate retail stores, in the provinces of Saskatchewan, Alberta, Manitoba, Ontario, British Columbia, and the Yukon territory.

Fire & Flower CEO Comment on ACT Financing

CEO Fencott commented on the funding, “Access to $30 million of non-dilutive debt financing is a strong show of support from our partner, Alimentation Couche-Tard. It also serves as a proof point on our alignment towards the future of cannabis retail.”

He expanded further on the relationship with ACT as well, “Through their leadership, network and expertise, we are accelerating the dynamics of the retail shopping experience and creating a consumer-centric marketplace that leverages technology and data-driven insights to deliver a personalised collection of products to consumers and reaches them wherever they are at.”

ACT Current Position in Fire & Flower

ACT currently holds a position greater than 10% of the outstanding voting securities of Fire & Flower. Due to this, entering into the Agreement constitutes a related-party transaction under Multilateral Instrument 61-101-Protection of Minority Security Holders in Special Transactions (“MI 61-101”).

Fire & Flower has relied on the exemption from the formal valuation requirement of MI 61-101 contained in section 5.5(a) of MI 61- 101 in respect of the Agreement as the fair market value (as determined under MI 61-101) of the Loan exceeded 25% of the Company’s market capitalization as determined under MI 61-101.

Fire & Flower has also relied on the exemption from the minority shareholder approval requirements of MI 61-101 contained in section 5.7(1)(f) of MI 61-101 in respect of the Agreement as the Loan was obtained by the Company on reasonable terms that are no less advantageous to the Company than if the Loan was obtained from an arm’s length party and the Loan is not convertible into or repayable by the issuance of equity or voting securities of the Company.

Further details will be included in a material change report to be filed by the Company. The material change report will not be filed more than 21 days prior to entering into the Agreement due to the timing of the announcement of the Loan and the anticipated closing thereof occurring in less than 21 days.