Benzinga | Aug 5, 2021 08:58AM EDT

Fire & Flower Acquires Assets From Wikileaf In A $7.5M All-Stock Deal, Launches Online Cannabis Dispensary Model In Canada And U.S.

Fire & Flower Holdings Corp. (TSX:FAF) (OTCQX: FFLWF) and its subsidiary Hifyre Inc. confirmed Wednesday it will acquire certain assets from subsidiaries of Wikileaf Technologies Inc. (CSE:WIKI) in a $7.5 million all-stock deal.

Wikileaf is an online platform for cannabis consumers and enthusiasts, with high user traffic achieved through enticing content and domain name power.

What happened

Under the asset purchase agreement, Fire & Flower will obtain specific digital assets and intellectual property rights of Wikileaf. The transaction is projected to close during the fiscal third quarter following the receipt of necessary approvals. The total purchase price will be compensated in the form of Fire & Flower shares.

The tech-focused cannabis retailer reported that the move comes as part of its plan to improve the company's proprietary data-driven retail platform.

Hifyre plans to remodel the Wikileaf website and turn it into a virtual online cannabis dispensary using the same e-commerce proprietary technology that supports Fire & Flower's retail network. The online dispensary will offer cannabis and accessory products, filling

orders through Fire & Flower's agreement with Humble & Fume (CSE:HBML).

Why it matters

Hifyre intends to create white-labeled online dispensaries fulfilled initially by the Fire & Flower retail network, which can be expanded to other cannabis dispensaries and delivery channels across both Canada and the U.S.

What's more, users of all white-labeled websites will obtain membership in Fire & Flower's proprietary Spark Perks loyalty program, which aims to grasp cannabis consumers' preferences and habits in the U.S. and Canada.

"Hifyre's expanded digital strategy offers a significant opportunity to expand the Company's e-commerce revenue channels through an asset-light and highly scalable model both in Canada and the U.S.," Trevor Fencott, CEO of Fire & Flower stated. "The branded online dispensary model is accretive to our retail channel as it offers the opportunity to capture new customers and drive an additional stream of high margin revenue through our Hifyre platform."

Matthew Hollingshead, chief innovation officer of Fire & Flower and president of Hifyre, stressed the importance of the company's relationship with its customers and thus the value of its Spark Perks loyalty program.

"Our ability to white-label our e-commerce platform offers the opportunity for any brand to create a virtual online cannabis dispensary through our proprietary technology," Hollingshead concluded.

Price Action

Fire & Flower shares closed Wednesday market session 0.41% higher at 73 cents per share

Photo: Courtesy of Fire & Flower