Fire & Flower Inc. et al., CCAA
Fire & Flower Inc. et al., a group of cannabis companies which operate from retail locations under the “Fire and Flower” and “Friendly Stranger” banners and maintain an online retail presence, obtained CCAA protection on June 5, 2023. The group currently employs approximately 645 employees in its retail operations, although it has indicated its intention to immediately reduce its headcount. The significant operating losses suffered by the group have largely stemmed from its retail segment, which accounted for approximately 75% of the group’s gross revenue for the quarter ended March 31, 2023. Increased competition, margin pressure, and regulatory uncertainty have collectively contributed to significantly lower revenues than expected, and several lease liabilities for locations in which the companies could not ultimately operate. The regulatory environment has also encouraged significantly increased competition amongst cannabis retailers and, in certain provinces, competition from government operated physical stores, online stores and delivery sales. Retailers also have to compete with the illegal cannabis market. Certain investments made by the companies have also resulted in a net drain on resources. FTI was appointed Monitor, represented by TGF. Stikeman Elliott is counsel for the companies, and Davies is counsel for the DIP lender.
By: Dina Milivojevic