This was done when the source of Shermans suitable for conversion to 17-pdrs dried up after US production switched over to wet stowage hulls and 76-mm gun turrets. As you know, the last Shermans to be converted into Fireflies were early M4´s. These had been used for training early during WW2, handed in when the US units went overseas with new equiment and rebuilt for further issue. By that time the US Army had standardised on the M4A3, so a number of the M4´s were available for release to the Allies. Mind you, US Ordnance intially condemned the conversions the British carried out.
The Grizzlies assembled in Canada were a potential second source of Shermans suitable for conversion, but by this time the forecast for numbers of Shermans needed, including Fireflies, was cut back. As you know that is why assembly of the Grizzly shut down after only 188 were built; the number required could be built by the US factories.
H.