Fire & Flower Holdings Corp., one of Canada’s largest cannabis retailers, has filed for creditor protection following substantial losses every year since starting operations, citing high operational costs and intense competition from the industry and illegal market.
Fire & Flower’s CCAA filing is the latest in a series of major cannabis industry setbacks, including layoffs, mergers and bankruptcy claims, as companies fight to lower prices and attract customers in an oversupplied market. The company’s cash position has also been dwindling for years. As of March 31, the company had over $50.8-million in current liabilities compared with $38-million in current assets, including just $8.2-million in cash – a position that has since deteriorated further, Mr. Trudel said.
Since 2021, the company’s exclusive source of outside investment has been through the exercise of warrants and debt financing by its largest shareholder, Alimentation Couche-Tard subsidiary ACT Investor. In April, the company had discussions with competitors and financial institutions about potential funding or acquisitions, but were not successful, he said.