EDMONTON -- Convenience store chain operator Alimentation Couche-Tard Inc. (ATDb.TO) has made a strategic investment in Fire & Flower Holdings Corp., which will use the funds to develop its Hifyre digital retail platform and expand its network of cannabis retail stores.

Couche-Tard's initial investment in the Edmonton-based company, announced Wednesday, will give it rights to 9.9 per cent of Fire & Flower's equity and the potential to increase its stake to 50.1 per cent for a total of $380 million.

"Couche-Tard is excited to make this strategic investment in one of the fastest growing cannabis 'pure-play' retailers," the Quebec-based retailer's president and CEO Brian Hannasch said in a statement.

"This investment in Fire & Flower, with a path to a controlling stake, will enable us to leverage their leadership, network and advanced digital platform to accelerate our journey in this new and flourishing sector."

Fire & Flower currently operates or licenses 23 cannabis retail stores in Alberta, Saskatchewan and Ontario and a wholesale distribution division in Saskatchewan.

"This strategic investment by Couche-Tard, one of the world's largest retailers, is transformative for Fire & Flower," CEO Trevor Fencott said in a statement.

He added that Couche-Tard's leadership team and international footprint in major markets such as the United States, Mexico and Europe "provide us with outstanding opportunities for aggressive growth."

Alimentation Couche-Tard is one of North America's largest operators of convenience stores and gas bars, primarily under the Circle K global brand and under the Couche-Tard banner in its home province of Quebec.

The companies say an indirect subsidiary of Couche-Tard will initially buy about $26 million of convertible debt securities that can be converted to 24.3 million common shares at a price of $1.07 each, representing 9.9 per cent of equity.

At the same time, Couche-Tard will receive three series of warrants allowing it to purchase more shares. It will also get the right to top up its investment to maintain its ownership percentage.

Fire & Flower's stock is currently listed on the TSX Venture Exchange but it has received conditional approval to list its shares on the Toronto Stock Exchange concurrent with the transaction.

Fire & Flower's stock price jumped 20 per cent to a two-month high at $1.37 a share following the announcement, while Couche-Tard stock was essentially flat at $80.73 in early trading Wednesday.

Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new – and controversial – Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.