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2020 has been a challenging year for the Canadian cannabis retail market as the industry has been impacted by the COVID-19 outbreak.

Following the legalization of cannabis 2.0 products in Canada, we became increasingly impressed with the vertical and believe that our readers need to be aware of this side of the business. Despite the headwinds that the sector is facing from COVID-19, Canadian cannabis consumers have been purchasing more legal cannabis than ever and we are favorable on this trend.

Canadian cannabis retailers bounced back during the last month and the sector has come well off its lows of the year. Earlier this week, Fire & Flower Holdings Corp. (FAF.TO) (FFLWF) released first quarter financial and operational results that showed impressive growth and we want to provide an update on the opportunity.

During the quarter, Fire & Flower generated more than $23 million of revenue which represents a more than 140% increase when compared to the same period last year. One of the reasons we are excited about the Canadian cannabis producer is on account of how the company was able to adapt to the new market environment by implementing safety operating procedures and by continuing to serve its customers through the Hifyre Digital Retail and Analytics Platform.

In the earnings report, the Canadian cannabis retailer reported that more than 100,000 members are on Hifyre’s member program. This represents a major milestone and we are favorable on this as these members are considered to be more valuable customers due the frequency and size of their orders.

Another important development for Fire & Flower is related to how it strengthened its balance sheet. During the quarter, the company completed two financings and raised up to $28 million with Green Acre Capital LP. Fire & Flower also entered into a commitment letter for an aggregate amount of up to $10 million with an option for an additional $5 million for non-dilutive credit facilities with ATB Financial.

So far this year, Fire & Flower has been highly focused on building out its retail network and we expect to see the management team continue to focus on this on a going forward basis. Ontario has proven to be a major market for the company and we will monitor how it continues to capitalize on the province. In the near future, Fire & Flower plans to enter the British Columbia market (once final licensing is complete) and we are bullish on this market.

Fire & Flower is in the early stages of a major growth cycle and we are favorable on the structure of the business. The company has formed strategic business relationships that have benefited the operation and we are bullish on the markets that it is targeting. Fire & Flower should report strong growth on a going forward basis

During the last month, Fire & Flower has been trending to the upside and has been coming off its 2020 lows. We believe that the market became too negative on the Canadian cannabis retail vertical and remain bullish on the long term opportunity that is associated with it. As cannabis sales numbers continue to rise, Fire & Flower should be a beneficiary of the increase and this is an opportunity that we are highly focused on.