- Lottery winners pay Fire and Flower for IP, consulting fees
- Fire and Flower plans to acquire stores with shares
- Retailer is landlord to two lottery winners
Two Fire and Flower-branded stores will open in Ontario in April, making the Edmonton-based cannabis store owner the latest Alberta retailer to secure agreements with lottery winners, along with the option to buy their licence.
One store will be in Ottawa’s trendy ByWard Market area, where Fire and Flower owns the building, and the other in Kingston, where the company holds the lease, said Trevor Fencott, chief executive of Fire and Flower.
But contrary to reports of million dollar payouts by other established retailers to lottery winners as businesses race to establish footholds in Canada’s biggest market, Fire and Flower says it has not paid cash to either of the license owners to open stores carrying their brand.
“We’re the landlords for them and will provide whatever they need help with in terms of getting the stores open, our intellectual property,” Mr. Fencott said.
“They are actually paying us to use our (intellectual property) and consulting services as they need it. At the end of it, we have the right to purchase their interest in the licence for 800,000 shares and 933,000 shares respectively.”
Fire and Flower, which owns retail pot stores in Alberta and Saskatchewan, began trading Tuesday on the TSX Venture Exchange. The shares closed at $1.34 each.
It is the company’s intention to acquire these two stores in Ontario after the lottery period ends, Mr. Fencott said.
“We are there to assist the lottery winners in getting a compliant store up on a timeline. They are the owners of this licence until it’s transferred,” he said.
Fire and Flower is already building a flagship retail outlet on Canada’s most expensive street in Toronto’s trendy Yorkville neighbourhood, though this venue will likely not open until the Ontario government makes more retail licences available.
Alberta-based pot retailers have so far dominated announcements of Ontario store openings slated for April, in conjunction with lottery winners. One Spirit Leaf Inc. store is expected to open in Kingston, Alcanna Inc. said it will open one Nova Cannabis in Toronto, and High Tide’s Canna Cabana is set to open one store in Hamilton and another at an undisclosed location.