Fire & Flower Secures $30 Million Credit Line From Strategic Investor Couche-Tard

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

Financing demonstrates further alignment with strategic partner and enables execution of the consumer digital platform

TORONTO, Dec. 13, 2021 /CNW/ – Fire & Flower Holdings Corp. (“Fire & Flower” or the “Company”) (TSX: FAF) (OTCQX: FFLWF) today announced it has entered into a loan agreement (the “Agreement”) with 2707031 Ontario Inc., an indirectly wholly-owned subsidiary of Alimentation Couche-Tard Inc. (collectively, “ACT”), pursuant to which ACT shall loan to the Company a maximum aggregate amount of $30,000,000 which may be drawn down in three separate tranches of $10,000,000 (the “Loan”). Subject to the terms of the Agreement, the Loan will accrue interest at a rate of 8.0% per annum, payable quarterly, and matures on October 1, 2022. The Agreement contemplates prepayment of amounts drawn from the net proceeds received by Fire & Flower upon the exercise of Series B Warrants held by ACT which become exercisable by ACT as of January 1, 2022 until September 30, 2022. The Company intends to use the amounts drawn down under the Loan to further develop the consumer digital platform as well as for general corporate purposes. The Loan is secured by the assets of the Company.

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. 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.

Trevor Fencott, Chief Executive Officer of Fire & Flower

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.

ACT holds greater than 10% of the outstanding voting securities of the Company. As such the 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”). The Company 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. The Company 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 the 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.

About Fire & Flower

Fire & Flower is a leading, technology-powered, adult-use cannabis retailer with more than 100 corporate-owned stores in its network. The Company leverages its wholly-owned technology development subsidiary, Hifyre Inc., to continually advance its proprietary retail operations model while also providing additional independent high-margin revenue streams. Fire & Flower guides consumers through the complex world of cannabis through education-focused, best-in-class retailing while the HifyreTM digital retail and analytics platform empowers retailers to optimize their connections with consumers. The Company’s leadership team combines extensive experience in the technology, cannabis and retail industries.

Through the strategic investment of Alimentation Couche-Tard (owner of Circle K convenience stores), the Company has set its sights on global expansion as new cannabis markets emerge and is poised to expand into the United States when permitted through its strategic licensing agreement with Fire & Flower U.S. Holdings upon the occurrence of certain changes to the cannabis regulatory regime.

Fire & Flower is a multi-banner cannabis retail operator that owns and operates the Fire & Flower, Friendly Stranger, Happy Dayz and Hotbox brands. Fire & Flower Holdings Corp. owns all issued and outstanding shares in Fire & Flower Inc. and Friendly Stranger Holdings Corp., licensed cannabis retailers that own and operate cannabis retail stores in the provinces of Alberta, Saskatchewan, Manitoba, British Columbia and Ontario, and the Yukon territory.

To learn more about Fire & Flower, visit www.fireandflower.com.

Original Press Release

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