Major Canadian marijuana retail chain Fire & Flower announced a deal to acquire cannabis delivery service Pineapple Express Delivery.
Toronto-based Fire & Flower will pay for the acquisition by assuming and repaying roughly 5.3 million Canadian dollars (about $4.2 million) of Pineapple Express’ debt and issuing roughly 1,126,761 common shares, subject to the latter reaching unspecified performance milestones in fiscal year 2022.
Based on Fire & Flower’s opening share price Thursday morning, those shares would be worth roughly CA$7.2 million.
Pineapple Express, based in Burlington, Ontario, performs more than 40,000 cannabis deliveries per month in Canada, according to Fire & Flower’s news release.
The acquisition is expected to close in the first quarter of 2022.
In a statement, Fire & Flower CEO Trevor Fencott said the Pineapple Express delivery platform will complement the retailer’s existing technology, including cannabis websites PotGuide and Wikileaf as well as its Hifyre retail data platform and its Spark Perks loyalty program.
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“We see this as an example of the advantages of building, testing and hardening technology and systems in the federally legal Canadian market before deploying them to the U.S. and other emerging markets,” Fencott said.
Shares of the retailer trade on the Toronto Stock Exchange as FAF.