(Bloomberg) -- Convenience-store giant Alimentation Couche-Tard Inc. is extending its footprint in the Canadian marijuana market.

The owner of Circle K stores on Tuesday announced an investment in Fire & Flower Holdings Corp., an Alberta-based retailer with 23 cannabis stores and a wholesale distribution unit.

Convertible debentures worth about C$26 million ($19.8 million) would give the Quebec-based company a 9.9% stake under the agreement. Couche-Tard will also get warrants which would allow it to boost its stake to 50.1%. Edmonton-based Fire & Flower said that would give it more than C$380 million in growth capital.

Ten months after publicly expressing interest in Canada’s recently legalized recreational cannabis market, Couche-Tard now has two major agreements with the industry, including a pact with producer Canopy Growth Corp. signed five months ago. The company, which built a network of more than 16,000 stores and fuel station from Louisiana to Ireland through waves of acquisitions, hasn’t made a large purchase in two years.

Couche-Tard Chief Executive Officer Brian Hannasch said in the statement that the investment will enable the company to leverage Fire & Flower’s “leadership, network and advanced digital platform to accelerate our journey in this new and flourishing sector.”

Fire & Flower surged 17% to C$1.33 at 9:53 a.m. in Toronto on the news while Couche-Tard fell 1% to C$80.08.

The partnership is yet another investment by a large company into the sector, which has attracted alcohol giants such as Budweiser brewer Anheuser-Busch InBev NV and Constellation Brands Inc. Couche-Tard, which is used to selling age-restricted products such as beer and tobacco, has said it can’t ignore cannabis, which became legal in its home market last year and already is in some U.S. states.

Under their pact, Canopy and Couche-Tard have opened one store in Ontario already. The retailer cannot operate any in its home province of Quebec, where the provincial government has a monopoly. Fire & Flower stores are based in Alberta, Saskatchewan and Ontario. It also own a digital platform for people who sell cannabis.

To contact the reporter on this story: Sandrine Rastello in Montreal at srastello@bloomberg.net

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Jacqueline Thorpe, Chris Fournier

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