Replies to post #10 on Fire & Flower Holdings Corp (FAF)

[FUNMAN]

This blue info stands to be a potential killer * or fantastic ** news for common shareholders if there is only one class of stock:

122,042,691 common shares
10,568,985 options
238,686,505 warrants* (including broker warrants)
$20,000,000 principal amount of convertible Licensed Producer debentures ($1.15 conversion)
$3,300,000 principal amount of Share Debentures ($0.80 conversion)
$27,168,000 principal amount of Convertible June 2019 Debentures ($1.20 conversion)
$25,989,985 principal amount of Convertible Couche-Tard Debentures ($1.07 conversion)
14,943,792 common shares are reserved pursuant to certain agreements entered into by Fire & Flower

As of September 30, 2019 the following securities were issued and outstanding:
The officers and directors of Fire & Flower on July 23, 2019 held:
23,934,336 common shares**
3,216,280 options
6,241,700 warrants
$150,000 principal amount of 8.0% unsecured convertible debentures ($1,20 conversion)

[FUNMAN]

(See Blue) Ontario to open up cannabis retail system starting in January

BY VANMALA SUBRAMANIAM



The government of Ontario has announced it will abandon the current lottery system for cannabis retail and move towards an open licensing system beginning January 2020 that will see the removal of a cap on the number of private cannabis stores across the province.



The Alcohol and Gaming Commission of Ontario (AGCO), the provincial regulatory body that is in charge of the cannabis retail system will begin accepting operator licence applications from prospective retailers on Jan. 6, 2020, followed by store authorization applications on March 2, 2020.



Store authorizations will be issued starting in April, at a rate of approximately 20 a month, similar to the pace in which Alberta awards cannabis store licences. By the end of 2020, there could be close to 250 stores across the province.



The government will also eliminate pre-qualification requirements for prospective retailers. The second cannabis lottery required that applicants secure leases and provide a letter of credit from a financial institution proving they had a loan of at least $250,000.



The government announcement also confirmed licensed producers will be allowed to participate in the retail market by opening a single store at one of their facilities.



“In response to the federal government’s decision to legalize cannabis, our government is determined to open the cannabis market as responsibly as possible,” said Attorney General Doug Downey. “We have said all along that opening more legal stores is the most effective way to combat the illicit market, protect our kids and keep our communities safe. That is our number one priority.”



Cal Bricker, the CEO of the Ontario Cannabis Store, welcomed the news, saying his agency was “ready to implement” the open licensing decision and will work closely with the AGCO to establish a “robust network of authorized retail stores across the province.”



The announcement is bound to reinvigorate investor confidence in cannabis companies, which has been waning partly because of limited accessibility in Ontario that has, to date, just 24 stores. Licensed producers — many of which have experienced declining revenues and are sitting on a pile of cannabis inventory — are banking on the creation of hundreds of new retail outlets to boost cannabis sales.



In a Friday morning note to clients, Bank of Montreal analyst Tamy Chen estimated that current industry sales volumes could increase by 35 per cent, excluding incremental contribution from cannabis 2.0 sales. Her prediction is based on a scenario where Ontario opens a total of 325 stores throughout 2020.



“While more stores in Ontario would drive revenue growth for the industry, we believe some of the larger LPs could benefit more, particularly ones with significant inventory and recent top-line deceleration like Canopy, Aurora and Organigram,” she wrote.



CIBC’s cannabis analyst John Zamparo, however, expressed some caution about the open market system, noting the magnitude of the announcement was “more modest compared to our expectations and those of many industry participants we have spoken to.”



“Though initial market reaction may be supportive, we believe current aggregate consensus among producers remains difficult to achieve,” he wrote, in a note to clients late Thursday evening.



Zamparo pointed out that although the 250 store target is 10 times the current retail footprint, it represents just 185 new stores beyond what had already been announced, and much fewer than Alberta’s current store count of 326 stores.



Ontario used a lottery system to award the first 67 licences, with eight licences allocated to First Nations groups. The lottery process was plagued with issues and even resulted in a lawsuit filed against the AGCO by 11 people who were disqualified from the process, one which was ultimately dismissed.



Because of the limited number of licences, the lottery process generated a feeding frenzy of sorts, with big name licensed producers and retail chains rushing to craft deals — sometimes worth millions — with lottery winners in order to enter Ontario’s retail market in some way.



The new rules will limit retail operators to own a maximum of 10 stores currently, a cap that will increase to 30 by Sept. 2020 and 75 by Sept. 2021, giving cannabis retail chains like Fire & Flower, and Meta Cannabis Supply Co. an opportunity to significantly expand their footprint in Ontario.



“We see Fire and Flower as being a large beneficiary of this announcement with already 15 strategic lease locations in high traffic areas (mainly in Toronto) ready to go,” wrote Justin Keywood, an analyst at Stifel Financial Corp.


Meanwhile, numerous would-be cannabis operators, who did not obtain a licence in the lottery process, have continued to pay into commercial leases on a monthly basis, while awaiting the provincial government to open up the licensing process.



Sasha Soeterik, who runs Bellwoods Coffee and Gelato in downtown Toronto, has spent almost $120,000 over the past one year paying into a 5-year commercial lease while waiting on the Ontario government to open up the cannabis retail market.



“I feel real joy over the chance to actually put an application in. This is great news,” she said in an interview with the Post on Friday morning.



“I mean, I don’t think this is a slam dunk victory because there is still a cap of 20 licences per month, but at least now we know we can apply as an operator in January and the AGCO will let us know by March, what our chances are in getting a store authorization. There’s so much more clarity.”



Financial Post

[FUNMAN]

(See Blue) Fire & Flower Launches New “Cannabis 2.0” Products in the Saskatchewan Market

https://fireandflower.com/investor-relations?tab=news-releases&release=fire-flower-launches-new-cannabis-2-0-products-in-the-saskatchewan-market

Regina, Saskatchewan (December 20, 2019) – Fire & Flower Holdings Corp. (“FFHC”) (TSX: FAF) and its wholly-owned subsidiary Fire & Flower Inc. (collectively with FFHC, “Fire & Flower” or the “Company”), today announced that it has begun selling new “cannabis 2.0” product formats in its retail stores in the province of Saskatchewan.

The Company is among the first retailers in Canada to be selling these new product formats.This has been achieved through a private wholesale model in the province of Saskatchewan, where the Company’s wholly-owned distribution business, Open Fields Distribution purchases from and negotiates prices directly with Licensed Producers.

New product formats in Fire & Flower’s assortment will be composed of edibles including gummies, mints and chocolates; and concentrate vaporizers in both all-in-one and cartridge formats. Fire & Flower’s initial assortment of cannabis 2.0 products in the province is anticipated to include offerings from the following Licensed Producers and brands prior to the end of 2019: Aphria, Aurora, Dosist, Cronos, The Green Organic Dutchman, High Park, Organigram, Redecan, and Sundial.

“With Fire & Flower being one of the first retailers in Canada to stock new cannabis formats, this exemplifies the clear benefits of the private distribution model including price, access and diversity of product within the province of Saskatchewan,” shared Trevor Fencott, Fire & Flower’s Chief Executive Officer. “We have demonstrated leadership through establishing Open Fields Distribution which supplies both the Fire & Flower retail network and external accounts within the province of Saskatchewan. There is significant demand for these new product formats in the market and we look forward to bringing these products to our loyal customers.”

“Our team has worked diligently over the last year and we are thrilled to be launching our Solei, RIFF and Good Supply vaporizers in 510 and all-in-ones at Fire & Flower stores across the province of Saskatchewan,” said Bernie Yeung, Vice President, Sales & Channel Strategy with Aphria Inc. “We are confident in our market readiness across the country and look forward to working closely with our retail partners to ensure we have the right brands and product offerings for consumers as we strive to combat the illicit market.”

Fire & Flower will continue to monitor consumer preferences of new product formats using the Hifyre digital retail and analytics platform to judiciously manage its product assortment and inventory on-hand.

As new products, including beverages and topcials, become available, Fire & Flower expects to include these products in the Company’s assortment, thereby increasing consumer choice of new product formats.

The Company does not yet have a confirmed date for the release of new cannabis product formats in provinces where government-owned provincial distributors control the supply chain.

Our customers are invited to use Fire & Flower’s e-commerce website or the Spark PerksTMFastlaneTMservice to order online and pickup in store as we anticipate high demand for initial products.

About Fire & Flower

Fire & Flower is a leading purpose-built, independent adult-usecannabis retailer poised to capture significant Canadian market share. The Company guides consumers through the complex world of cannabis through education-focused, best-in-class retailing while the Hifyre digital platform connects consumers with cannabis products. The Company’s leadership team combines extensive experience in the cannabis industry with strong capabilities in retail operations.

Fire & Flower Holdings Corp. owns all issued and outstanding shares in Fire & Flower Inc., a licensed cannabis retailer that owns or has interest in cannabis retail store licences in the provinces of Alberta, Saskatchewan, Manitoba and Ontario and the Yukon territory.

Through its strategic investment with Alimentation Couche-Tard Inc. (ATD.A, ATD.B), the Company has set its sights on the global expansion as new cannabis markets emerge.

For More Information Contact:

Investor Relations
Chris Bolivar
[e-mail]
1-833-680-4948

Media Relations
Nathan Mison
[e-mail]
780-784-8859

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws (“forward-looking statements”). All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “outlook”, “expect”, “project” and similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions “may” or “will” occur. These statements are only predictions.

Forward-looking statements are based on the opinions and estimates of management of FFHC at the date the statements are made based on information then available to the Company. Various factors and assumptions are applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Forward-looking statements are subject to and involve a number of known and unknown risks and uncertainties, many of which are beyond the control of FFHC, which may cause FFHC’s actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. No assurance can be given that the expectations reflected in forward-looking statements will prove to be correct.

FFHC assumes no obligation to publicly update or revise forward-looking statements to reflect new information, future events or otherwise, except as expressly required by applicable law.

SOURCE Fire & Flower Holdings Corp.

[FUNMAN]

Province delays sales of cannabis vapes, angering producers and retailers

By: BILL KAUFMANN
Updated: January 2, 2020

https://calgaryherald.com/cannabis/cannabis-business/province-delays-sales-of-cannabis-vapes-angering-producers-and-retailers

Once again, "government" is screwing the pooch, and aiding and abetting the black market. - FUNMAN

The province has indefinitely postponed the legal sales of cannabis vapes, a move that’s ignited anger among producers and retailers.

With the second phase of cannabis legalization involving the sale of edibles and other derivatives to take effect in Alberta, a major component of that, vaping cartridges, has been put on hold by the provincial government, which has cited health concerns.

Just as Health Canada announced it was launching a testing regime of vaping products that are already legally available in some provinces, the Alberta government said it, too, would review their safety.

“AGLC and government are considering various aspects related to cannabis vape products to determine whether or not they will be available for consumer purchase in Alberta,” says a statement from Alberta Gaming, Liquor and Cannabis, the provincial regulator.

“As you have likely seen, there have been recent reports about the health effects of vaping. As a result, vape products will not be available in the initial launch of edibles, extracts and topicals.”

The AGLC said a decision on the availability of vaping products will be made “early in the new year.”

Other products, such as edibles, beverages and topicals, are expected to be in stores by mid-month, said the AGLC.

The move comes after Newfoundland and Labrador and Quebec banned cannabis vapes, while Nova Scotia has prohibited flavoured versions.

More than 50 deaths linked to vaping have been reported to the U.S. Centers for Disease Control (CDC) and more than a dozen lung-related illnesses have been documented in Canada — the majority of the cases blamed on illegal cannabis vapes.

The CDC says vitamin E acetate, a thickener added to THC vapes, is a likely culprit in many of the deaths and injuries.

Members of Alberta’s licensed cannabis industry say they’ve been blindsided by the postponement, which they insist will add uncertainty to a sector already struggling financially.

“The industry hasn’t found its feet yet and these kinds of decisions made without consultation with the industry is very concerning,” said Nathan Mison, chairman of the Alberta Cannabis Council, which represents retailers and producers.

“People are very concerned — licensed producers have spent a lot of time and money on cannabis legalization 2.0.”

In the first year of recreational legalization, the cannabis sector has been challenged by government regulations, taxes, a product shortage and a durable black market.

Members of the council said they’ve been told by the province that the hold on vaping products will last at least until March.

Mison said he fears taxpayers will take a hit since provincial wholesaler AGLC has almost certainly already purchased vaping products for distribution to retailers.

And he said he has confidence in the safety of vapes produced by licensed firms overseen by Health Canada.

“(Governments) are making regulatory policy based on public fear and ignorance, and the only winners in that are the black market,” said Mison.

The products, he said, are already proving a hit in Saskatchewan where they’ve “been flying off the shelves.”

In October, Alberta announced a review of its tobacco policy with the possibility it could add laws governing e-cigarettes by next spring.

Mison said it appears cannabis vapes are now being included in that review “after the government told us they wouldn’t be.”

In a product unveiling to Alberta retailers last month in Calgary, executives with the country’s largest cannabis company, Canopy Growth, acknowledged the controversy over the health effects of vaping but insisted its products were safe, citing rigorous lab testing that rules out contaminants.

“It’s quite frankly impossible to ignore the dangers,” said the company’s chief technical officer Peter Popplewell.

“But (Canopy Growth) products are products you can use with confidence and retailers can sell with pride . . . doing things right means exceeding Health Canada regulations.”

The province’s reluctance in releasing THC vapes is understandable, as is the industry’s frustration, said Ashley Newman, a Calgary retailer and vice-chair of the Alberta Cannabis Council.

“We need to make sure they’re safe but it will affect business and the economy,” said Newman.

Whatever the merits of Alberta’s vaping delay, Newman said she’s not surprised it’s come to this.

“There’s been a lot of bad publicity — I kind of saw this coming,” she said.

[FUNMAN]

WOW this is like a spring waiting to be let loose ... Bid/0.708/Ask/0.735/B/A Size...27000x23500

[FUNMAN]

3 Canadian Cannabis Stocks Leading The Retail Charge In 2020 (see blue)

EDITORIAL
Jan 6, 2020
7:49 AM EST

Although the legalization of recreational cannabis in Canada represented an unprecedented growth opportunity, the industry has faced significant headwinds following a less-than-smooth rollout.

From the number of legal dispensaries to the types of products that can be sold to consumers, a number of factors have contributed to the slow rollout of Canada’s recreational cannabis market and this has put pressure on companies that are levered to this burgeoning opportunity.

We expect 2020 to be a banner year for the Canadian adult use market due to the increasing number of dispensaries and the legalization of cannabis derivative products (i.e. vape pens, cannabis infused products, cannabis concentrates, topicals, and more). We are bullish on the growth prospects associated with Canada’s recreational cannabis market and have highlighted 3 companies that are levered to this vertical of the industry.

Fire & Flower: A Canadian Cannabis Retail Execution Story

Fire & Flower Holdings Corp. (FAF.TO) (FFLWF) has been highly focused on the retail side of the Canadian cannabis industry and this is an opportunity that caught our attention in 2019. During the last year, the company has significantly expanded its reach across Canada, and we are bullish on the growth prospects associated with its footprint.

A few weeks ago, Fire & Flower reported a major milestone and announced that it has started to sell cannabis 2.0 products in its retail stores in Saskatchewan. Cannabis 2.0 refers to the new types of cannabis products that can be sold to recreational consumers and we are bullish on the upside associated with this opportunity.

When looking at the types of products that can be sold to consumers from Fire & Flower retail stores, there is a lot to be excited about. These products include gummies, mints and chocolates; and concentrate vaporizers in both all-in-one and cartridge formats. Fire & Flower works with a majority of the leading Canadian cannabis producers and we expect these relationships to support demand on the consumer level.

During the last quarter, Fire & Flower has been under considerable pressure and we continue to follow this trend. We are impressed by the way the management team has been able to execute and expect the opening of new stores to be a catalyst for the business. Last month, the company reported more than $13 million of quarterly revenue and this is an opportunity that we will continue to monitor.

Canopy Growth: Growing Through Acquisitions

Through a series of acquisitions, Canopy Growth Corporation (WEED.TO) (CGC) has become highly levered to the Canadian cannabis retail market and this is an opportunity that we continue to closely follow. A few years ago, the Canadian cannabis producer reported a major acquisition of Hiku Brands and we continue to monitor how this asset will benefit the entire business.

Although we believe that Canopy Growth paid a huge premium for an unproven retail operator, we are bullish on the long-term growth prospects associated with the cannabis retail market in Canada and will keep an eye on how the company advances this aspect of the story. The last year has been a tough year for the business and we expect 2020 to be a period of substantial growth for the operation.

Canopy Growth recently announced the appointment of a new CEO and this removed a major headwind from this business. During the last quarter, the Canadian cannabis producer has been under considerable pressure and the shares have fallen more than 50% from its all-time highs. We believe that Canopy Growth has substantial potential catalysts for growth and will continue to monitor how the retail side of the business supports growth on a going forward basis.

*As of this morning Tokyo Smoke announced plans to open 10 retail outlets in Ontario in early 2020.

Wildflower Brands: A Vancouver Cannabis Retail Opportunity

When it comes to the Canadian retail market, Wildflower Brands Inc. (SUN.CN) (WLDFF) is an opportunity that is flying under the radar. Last month, the company reported to have generated more than $6 million of revenue in the first quarter and this represents massive growth when compared to the same period last year.

Last year, Wildflower completed the acquisition of City Cannabis Co., a cannabis retailer holding two of the three City of Vancouver licenses to sell cannabis and the only company with multiple licenses in British Columbia. This asset has proven to be the greatest growth driver for the business, and we are favorable on the opportunity for City Cannabis in 2020 and beyond.

One of the reasons we are favorable on this opportunity is due to where the cannabis dispensaries are located. City Cannabis has been profitably operating various dispensaries in Vancouver since the city started licensing cannabis retailers. City Cannabis has multiple cannabis retail license applications that have been submitted in British Columbia and Ontario.

2019 was a tough year for the cannabis sector and Wildflower was impacted by the decline. Although the fundamental story has significantly improved, the recent trend has been to the downside and this is an opportunity that we will continue to follow. Going forward, we expect the opening of new dispensaries to be the biggest catalyst for the story and expect to see several new locations opened this year.