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Fire & Flower Completes Bought Deal Financing

/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES/

EDMONTON , June 26, 2019 /CNW/ - Fire & Flower Holdings Corp. ("Fire & Flower" or the "Company") (FAF.V), today announced the closing of its previously announced bought deal private placement (the "Private Placement") of 27,188 convertible debenture units (the "Units") at a price of $1,000 per Unit for aggregate gross proceeds of $27,188,000 .  Each Unit is comprised of one $1,000 principal amount unsecured convertible debenture (a "Convertible Debenture") and 278 common share purchase warrants (each, a "Warrant"). Each Warrant entitles the holder thereof to purchase one common share in the capital of the Company (a "Warrant Share") for a period of 24 months following the closing of the Private Placement at an exercise price of $1.45 per Warrant Share.

"With the recent re-opening of cannabis retail licensing in Alberta , being able to accelerate store build-outs is key" shared Trevor Fencott , Fire & Flower's Chief Executive Officer. "Access to capital is critical to success in a growth industry, and this financing clearly puts Fire & Flower in a position to capitalize on market opportunities as they emerge."

The Private Placement was underwritten by a syndicate of underwriters, led by Eight Capital and GMP Securities L.P. and including AltaCorp Capital Inc., Canaccord Genuity Corp. and Echelon Wealth Partners Inc. (collectively, the "Underwriters").

The Convertible Debentures bear interest at an annual rate of 8.00% payable in arrears in equal installments semi-annually. The Convertible Debentures mature on June 26, 2020 (the "Maturity Date"). The principal amount of Convertible Debenture and accrued and unpaid interest thereon will be convertible at the holder's option into common shares of the Company (the "Conversion Shares") at any time prior to the earlier of: (a) the close of business on the business day immediately preceding the Maturity Date; and (b) the date fixed for redemption (as set out in the Debenture Indenture (as defined below)).  The conversion price for the principal amount of Convertible Debentures is $1.20 per Conversion Share.  The conversion price for the accrued and unpaid interest is the greater of (a) $1.20 ; and (b) the Market Price (as defined in the policies of the TSX Venture Exchange) on the date of conversion, per Conversion Share.  The conversion of the Convertible Debentures is subject to adjustment in certain events as described in a debenture indenture dated as of June 26, 2019 entered into between the Company and Computershare Trust Company of Canada (the "Debenture Indenture").

In connection with the Private Placement, Fire & Flower has paid the Underwriters aggregate cash consideration of $1,476,420 . As additional consideration, the Underwriters have received 1,355,350 compensation options ("Compensation Options") in connection with the Private Placement. Each Compensation Option is exercisable for one common share of the Company at a price of $1.20 per share until June 26, 2021 .

The net proceeds of the Private Placement will be used for working capital and general corporate purposes, including to grow the Company's proprietary Hifyre digital platform.

Certain directors and officers of the Company participated in the Private Placement and purchased an aggregate of 150 Units.  Such participation constitutes a related-party transaction under Multilateral Instrument 61-101-Protection of Minority Security Holders in Special Transactions ("MI 61-101").  The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation in the Private Placement as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved related parties, exceeded 25% of the Company's market capitalization as determined under MI 61-101.

About Fire & Flower

Fire & Flower is a leading purpose-built, independent adult-use cannabis 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 that is centered around its proprietary Hifyre digital platform. 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 in the provinces of Alberta and Saskatchewan and is a consultant and licensor to Fire & Flower-branded retail locations in province of Ontario .

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 in this news release include statements regarding the closing of the Private Placement and the intended use of proceeds of the Private Placement.

Forward-looking statements are based on the opinions and estimates of management of the Company 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 the Company, which may cause the Company'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.

The Company 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Fire & Flower Holdings Corp.


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