TFSA Investors: 1 High-Growth Cannabis Value Stock Set to Rise

The sale of cannabis accessories represents a huge opportunity for Fire & Flower Holdings Corp. (TSX:FAF).

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Fire & Flowers Holdings (TSX:FAF) is an independent cannabis retail chain that sells cannabis products and accessories through the company’s retail locations, currently located in the provinces of Alberta, Saskatchewan, Manitoba, Ontario, and in the Yukon. The company is focused on becoming a premier independent cannabis retailer and a global brand.

In addition to the company’s platforms, wholesale distribution, and fulfilment capabilities, the company’s proprietary digital retail and analytics platform provides a significant competitive advantage, additional revenue opportunities, as well as a growth platform to enter international markets.

Broad geographical reach

In British Columbia, the company has been issued a licence to operate a cannabis retail store. In Alberta, the company currently operates 40 licensed cannabis retail stores. It sells cannabis and cannabis accessories to adults at licensed retail premises in Alberta. In Saskatchewan, the company currently operates nine licensed cannabis retail stores where it sells cannabis, cannabis accessories, apparel, and related ancillary items to adults at the company’s licensed retail premises. It also sells products online for curbside pickup, and the company also delivers to residences in Saskatchewan.

In Manitoba, the company operates one licensed cannabis retail store in Swan River pursuant to a licence issued by the Liquor, Gaming, and Cannabis Authority of Manitoba (LGCA). Friendly Stranger, a subsidiary of the company, hold multiple store authorizations in Ontario. The subsidiary sells cannabis, cannabis accessories, apparel and related ancillary items to adults at the company’s licensed retail premises. The company also operates a licensed cannabis retail store in Whitehorse, Yukon.

Retail store expansion

Friendly Stranger has been expanding the number of company’s operational licensed cannabis retail stores by opening stores where it has received a cannabis retail store licence, acquiring existing cannabis retail store licensees, and developing new cannabis retail stores subject to obtaining necessary licences, permits, and other government approvals.

In addition to the foregoing, through the company’s wholly owned subsidiary Open Fields, the company operates a cannabis wholesale business from a licensed distribution centre in Saskatoon, Saskatchewan. Open Fields is licensed to purchase cannabis directly from licensed producers, which it does on both an exclusive and non-exclusive basis. The subsidiary supplies cannabis retail stores as well as a significant number of independent private cannabis retailers.

Effective technology systems

Recently, the company acquired Hifyre, a company with expertise in building compliant technology systems for licensed producers to accelerate the development of the company’s retail cannabis technology platform. The new platform now comprises of compliant e-commerce, in-store retail, customer experience functionality, analytics, and an extended mobile application experience. This provides a competitive advantage for the company’s retail operations as well as helps it plan for anticipated growth plans.

Cannabis accessories includes rolling papers or wraps, holders, pipes, water pipes, bongs, and vaporizers, and other things represented to be used in the consumption of cannabis. Friendly Stranger sells cannabis accessories through accessory only retail shops in Ontario, which do not require a licence from the applicable provincial regulator. The sale of cannabis accessories represents a huge opportunity for the company.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

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