Fire & Flower Holdings Corp. and its subsidiaries have received an order for creditor protection (Initial Order) from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (CCAA).
The company has been actively pursuing additional financing to raise capital to fund its operations, and on May 26, 2023, engaged a financial advisor to assist the company with reviewing strategic options, including financing options. Following such review and after careful consideration of all available alternatives and consultation with legal and financial advisors, the directors of the company determined that it was in the best interests of Fire & Flower to file an application for creditor protection under the CCAA.
The Initial Order includes, among other things: a stay of proceedings in favor of the Fire & Flower Group, approval of the DIP Loan and the appointment of FTI Consulting Canada Inc. as monitor of the Fire & Flower Group.
The Fire & Flower Group sought creditor protection under the CCAA in order to receive a stay of proceedings that will allow the Fire & Flower Group to work with FTI Consulting Canada to facilitate the development of an orderly process designed to streamline its operations and conduct a court-supervised sales process to obtain a solution for its operations and maximize the value of the Fire & Flower Group’s assets for the benefit of its stakeholders. The DIP Loan is anticipated to fund the operations of the Fire & Flower Group in the ordinary course during this process.
The board of directors of the company will remain in place, and management will remain responsible for the day-to-day operations of the company under the general oversight of FTI Consulting Canada.
In order to fund the CCAA proceedings and other short-term working capital requirements, the Fire & Flower Group has executed a facility agreement with Ontario Inc. (the “DIP Lender”), an affiliate of Alimentation Couche-Tard Inc. The DIP Lender has agreed to advance a debtor-in-possession loan in the amount of $9,800,000. The continued availability of the DIP Loan is conditional on, among other things, certain conditions being satisfied, including the Initial Order remaining in effect.
This comes after Fire & Flower signed a master licensing agreement with Alimentation Couche-Tard. Under that agreement, five MC Cannabis stores in the greater Toronto area — located next to Couche-Tard’s Circle K c-stores will be rebranded to Fire & Flower.
Fire & Flower is a technology-powered, adult-use cannabis retailer with more than 90 corporate-owned stores in its network.
