Canadian cannabis retailer Fire & Flower has implemented a restructuring plan that will see three stores in Alberta closed, a sign the province’s retail market is reaching a point of saturation.
Alberta – with 449 points of sale for adult-use cannabis – is the only province in Canada to reach the one-per-10,000-people mark observed in other mature markets.
By closing the three stores, Fire & Flower will be able to focus resources and license cap allocation to stores with higher profit potential, the company said in a news release with its earnings.
The company incurred a charge of 6.5 million Canadian dollars ($4.6 million) as a result of the restructuring.
Fire & Flower reported a net loss of CA$22.3 million for the quarter ending Feb. 1, compared to net income of CA$10.2 million in the previous quarter.
Revenue grew 22% from the previous quarter to CA$16.8 million.
Also in the quarter, the company was hit with a CA$4.6 million impairment charge to write down some assets to their fair values.
As of Jan. 13, the company had achieved its target of opening 45 retail stores in Alberta, Saskatchewan, Manitoba and Ontario and Yukon.
“We will focus on addressable markets and participating in those markets in a meaningful and accretive fashion to our business,” CEO Trevor Fencott said in the release.
Fire & Flower previously said it aims to have 85 stores open in fiscal year 2020 and 135 stores in 2021.
Adjusted EBITDA – a measure of profitability – for the period ending Feb. 1 was a CA$5.3 million loss.
Fire & Flower shares trade on the TSX Exchange as FAF.