Fire & Flower — Investor Presentation (July 2019)
26 slides from Fire & Flower's investor presentation, July 2019
Slide 1: Corporate Presentation
Corporate Presentation July 2019 Investor Relations Contact [email protected] 1-833-680-4948
Slide 2: Disclaimer
Disclaimer This presentation, and any supplements and amendments to this presentation, has been prepared by Fire & Flower Holdings Corp. (“Fire & Flower” or the “Company”). This presentation is for informational purposes only and not, and shall under no circumstances be construed as, an offer to buy
Slide 3: Positioned to Become a Leading Global Cannabis Retailer
Positioned to Become a Leading Global Cannabis Retailer Fire & Flower is a purpose-built, independent cannabis retailer launched in Canada with its sights set on global expansion as legal cannabis markets emerge. 1. Strategic Investment by Alimentation Couche-Tard 2. Founded by successful legal cann
Slide 4: Alimentation Couche-Tard Strategic Investment
Alimentation Couche-Tard 1 Strategic Investment • Sets sights on expansion in the global legal cannabis market • Provides $380MM of growth capital, if fully exercised • Delivers potentially significant upside opportunities for Fire & Flower See “Explanatory Note Regarding Certain Proposed Transactio
Slide 5: Couche-Tard Strategic Investment
Couche-Tard Strategic Investment In July 2019, Fire & Flower entered into a subscription agreement* with Alimentation Couche-Tard (TSX: ATD.A ATD.B), one of the world’s largest retailers with over 16,000 stores in 25 countries. The strategic investment would result in Couche-Tard having the right to
Slide 6: Couche-Tard Transaction Highlights
Couche-Tard Transaction Highlights Initial purchase of $25MM of convertible unsecured debentures, representing an as converted 9.9% ownership interest Couche-Tard will receive three series’ of common share purchase warrants If exercised, the warrants would increase Couche-Tard’s ownership interest t
Slide 7: Couche-Tard Transaction Benefits
Couche-Tard Transaction Benefits Accelerates Fire & Flower’s pace of growth and expansion in Canada and internationally Leverages Couche-Tard’s vast international infrastructure and experience for global expansion opportunities Significant new commercialization and innovation opportunities for the H
Slide 8: Founded by Successful Legal Cannabis Entrepreneurs
Founded by Successful Legal 2 Cannabis Entrepreneurs • Deep relationships within the regulated cannabis industry • Best-in-class retail, built from the ground up • Leapfrog right to technology-enabled next generation retailing Corporate Presentation | 8
Slide 9: Senior Leadership Team
Senior Leadership Team Trevor Fencott, Chief Executive Officer Co-Founder & Director, Mettrum Health Corp. – TSXV listed parent company of cannabis Licensed Producer Vice-Chair, Canadian Cannabis Association– Cannabis education company Corporate and regulatory lawyer Nadia Vattovaz, Chief Financial
Slide 10: Board of Directors
Board of Directors Harvey Shapiro Donald Wright Norman Inkster, BA Hons., LLD (Hon) Chairman Lead Director Chair, Governance & Compensation Committee Director, Emblem Corp.* President, Merrill Lynch Canada* 18th Commissioner of the RCMP* CEO, Dynacare Inc.* Chairman & CEO, TD Securities* President o
Slide 11: Retail Brand over Product Brand
Retail Brand over Product Brand Today’s cannabis consumers generally do not have preferences to existing cannabis product brands. This means the retail brand is of greater importance to the consumer than the product brand. Given the restrictive nature of cannabis marketing promotion it is difficult
Slide 12: Retail Experience for Broad Demographics
Retail Experience for Broad Demographics Corporate Presentation | 12
Slide 13: Unique, Independent Market Position
Unique, Independent 3 Market Position • Independent, non-channel-conflicted position maximizes product and margin opportunities • Exclusively focused on cannabis retail • Foundation of a high-value consumer relationship based on trust Corporate Presentation | 13
Slide 14: Occupies Unique Competitive Market Position
Occupies Unique Competitive Market Position Independent Purpose-Built Cannabis Retail Experts Retailers With Non-Cannabis Channel-Conflicted Legacy Businesses Vertically Integrated Corporate Presentation | 14
Slide 15: Proprietary Hifyre Cannabis Data Platform
Proprietary HifyreTM 4 Cannabis Data Platform • Provides deep understanding of consumer behavior and preferences • Independent, high-margin and growth-oriented revenue stream • International growth platform Corporate Presentation | 15
Slide 16: Hifyre
Hifyre™ In July of 2018, Fire & Flower completed the acquisition of Hifyre, the digital product studio responsible for developing the industry-first regulated cannabis e-commerce platform for Mettrum Health Corp. (now Canopy’s Spectrum Cannabis). Led by digital industry veteran Matthew Hollingshead,
Slide 17: Data-Driven Retail
Data-Driven Retail The Hifyre Digital Platform is the proprietary, data-driven system that supports Fire & Flower’s advanced operations and provides a competitive advantage in understanding consumer behaviors in Fire & Flower Ecosystem the evolving cannabis market. Engaged Consumers AI Driven Data L
Slide 18: Hifyre Digital Platform Timeline
Hifyre Digital Platform Timeline Critical head start and accelerating the momentum of execution Mar 2018 July 2018 Oct 2018 Nov 2018 Feb 2019 Mar 2019 Apr 2019 Website & Integrated Shop Data Insider Program Successful Analytics & Security Launch Launched Commercialization of Hifyre Digital Platform
Slide 19: Demonstrated Execution of Aggressive Growth Plan
Demonstrated Execution of 5 Aggressive Growth Plan • 24 licensed cannabis stores since legalization • 45 stores planned for F2019 • HifyreTM international growth optionality See “Explanatory Note Regarding Certain Proposed Transactions”. Corporate Presentation | 19
Slide 20: Accomplishments
Accomplishments Strategic investment with Couche-Tard providing a meaningful growth opportunity in cannabis retail 24 licensed Fire & Flower branded stores Alberta, Saskatchewan, Manitoba, the Yukon, and Ontario Hifyre Digital Platform launched and generating independent revenue stream 70 Strong cor
Slide 21: Growth Plan
Growth Plan Our goal is to establish the most recognizable and successful brand of independent cannabis retail stores attaining a ~15% category market share. We have 24 licensed stores selling cannabis in Alberta, Saskatchewan, Manitoba, the Yukon, and Ontario with a wholesale distribution division
Slide 22: Currently Anticipated Timeline
Currently Anticipated Timeline July 2019 January 2020 July 2020 January 2021 25 Stores Open Additional 20(1) Additional 20(1) Additional 20(1) Stores Open Stores Open Stores Open 45 Total 65 Total 85 Total (1) See “Forward Looking Statements”. Corporate Presentation | 22
Slide 23: Hifyre Digital Platform
Hifyre™ Digital Platform The Hifyre digital platform is a white-label SAAS retail platform that can be licensed to regulated cannabis retailers in emerging international markets. Through strategic software alliances the Hifyre Digital Platform will provide a shop-in-a-box rollout for retailers. • Ac
Slide 24: Additional Materials
Additional 5 Materials Corporate Presentation | 24
Slide 25: Summary
Summary Cannabis Retail Frontrunner - Advanced digital platform and strategic investment by Couche-Tard Cannabis 2.0 - Regulated retail is the next chapter in the cannabis growth story Business Model - Attractive sector economics, sustainable profit margins, finite stores present barriers to entry 7
Slide 26: Cap Table
Cap Table As of July 23, 2019 the following securities were issued and outstanding: 117,619,511 common shares 10,068,985 options 48,089,391 warrants (including broker warrants) $20,000,000 principal amount of 8.0% unsecured convertible debentures ($1.15 conversion) $3,300,000 principal amount of non
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