Couche-Tard, Fire & Flower expand retail relationship

The cannabis retailer will open four new co-located stores with the convenience operator throughout Ontario.

Fire - Flower Holdings Corp--Fire - Flower Launches Pilot with AQuebec-based convenience giant Alimentation Couche-Tard and cannabis retailer Fire & Flower are expanding their strategic relationship with the opening of six cannabis retail locations.

Fire & Flower, in which Couche-Tard owns a stake, will be opening four co-located stores with Circle K throughout Ontario – in Brampton, Guelph, Oshawa and Hamilton – as well as aiming to acquire two new locations in Kingston. The move is the result of “promise in the cannabis market” that Couche-Tard has identified, according to Alex Miller, EVP of operations for North America at the convenience operator, who says it is committed to learning more about the cannabis space as it evolves.

Couche-Tard already operates five co-located cannabis stores adjacent to its Circle K banners within the GTA. And it is furthering this co-location strategy because “we see it as a natural extension of our expertise to pair our convenient shopping experience and differentiating store footprint with the growing customer demand for cannabis products,” Miller said.

The partnership operates primarily through Fire & Flower’s proprietary technologies, specifically its Hifyre digital retail platform and Spark Perks member program. In that respect, the effort is similar to others by the convenience operator to introduce new technologies and services into its operations.

Those efforts are backed by Couche-Tard’s Circle K Venture Fund, and include investments in U.S.-based companies Food Rocket and Farmstead, which offer quick delivery service of grocery, convenience and pantry items south of the border.

The convenience giant first invested in Fire & Flower in 2019, and in 2020, the companies opened a pair of co-located stores in Alberta: one in Calgary and another in Grande Prairie.

Though the convenience operator is clearly committing to the strategy, it may take time for the public to fully embrace it, according to Kenneth Wong, professor of marketing at Queen’s University. While he acknowledges that it’s not appropriate for a chainwide rollout – “stores near elementary and high schools might not be the best location,” he says – there is little difference between the sale of cannabis from beer and wine, both of which are sold in convenience and grocery within Couche-Tard’s home province.

“The fact that some will raise an eyebrow says a lot about how the cannabis industry is still seen by many, but it is no different from beer and wine,” he explains. “Just recall that few places in Canada, outside Quebec, sell beer and wine in grocery stores.”