How Tokyo Smoke Plans to be Canada’s 1st Premium Cannabis Retailer

By Devon Johnson

Toronto-based coffee and clothing retailer Tokyo Smoke is planning on launching a premium line of cannabis. The retailer recently announced a partnership with medical cannabis provider Aphria that will see the launch of 4 proprietary strains of Cannabis; Go, Relax, Relief, and Balance. These strains will be available through legal channels in early 2017.

Tokyo Smoke was founded in 2015 by father and son team, Alan Gertner and Lorne Gertner, with "a strong passion for the Cannabis space, and strong desire to support the Cannabis movement". Currently, Tokyo Smoke operates two distinct Toronto locations that operate as “high design cultural showrooms".

The company's flagship location Tokyo Smoke Found is located at 850 Adelaide Street West in Toronto. The space was designed by architect Steven Fong, with the interior built within a 10'x10' shipping container. A second location Tokyo Smoke Green is located at 874 College Street West in Toronto's Little Italy. Both locations feature full-service coffee bars and Tokyo Smoke branded gear that includes clothing, museum quality collectables, and merchandise. 

According to Tokyo Smoke's website, the brand's four distinct cannabis strains were crafted over the span of 20 years. The company describes cannabis as an "emotive experience" and that the product should match the needs and desires of the consumer. For example, Tokyo Smoke's 'Go Blend' is an "energizing and awaking sativa", while their 'Relax Blend' is an "easing indica".

Tokyo Smoke's Head of Operations, Geoffrey Degrasse, says it has always been part of the plan to offer a premium cannabis offering at Tokyo Smoke. "Right now, the current cannabis retail experience is poor. We plan to bring a premium experience to those with interest in cannabis,” he said. 

The sale of cannabis in Canada has been a controversial issue. News broke this year that Canadian federal marijuana legislation is to be introduced in Spring 2017.

What does this mean for Canadian retail? As the government decides how to sell cannabis, there is the possibility that cannabis sales could be conducted through private businesses. This could create an untapped market in Canada, resulting in a potentially competitive cannabis retail landscape across the country. If private retailers are able to sell cannabis, Tokyo Smoke would become one of Canada's first premium cannabis retailers.

The legalization of cannabis in Canada could spark a movement to create compelling retail spaces. Speaking on the topic of cannabis store design, expert Marjorie Mackenzie, VP of Retail at figure3 said: “As we learned when we designed a therapeutic cannabis retail offering in the U.S., the most important step is understanding how your consumers frame and conceptualize the offering. Cannabis is an emerging vertical and for future retailers to get it right, they must first understand the often unconsciously held beliefs the customer has about the product. Without revealing that insight; store design will fail to emotionally connect with your customer at best or actively repel them at worst”.

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Mr. Degrasse says Tokyo Smoke is confident in its business strategy. “If the government decides to sell pot under a new government agency, that's fine because we’re an all-encompassing consumer brand,” referring to the company's other product offerings such as coffee and branded merchandise. However, the focus still lies around the interest of cannabis. “What our retail shops are great for is consumers can experience more about what the Tokyo Smoke brand is about. We’re an active, social brand that likes to challenge what cannabis is about,” he said. 

According to the company, Tokyo Smoke is looking to expand its retail and recreational cannabis presence in Canada, although it has not yet publicly announced any future locations in this country. When asked about a possible American expansion, Mr. Degrasse said that while Tokyo Smoke locations in the U.S. have not yet been finalized, the company is always in discussions with partners in various cities. 

Canadian Retail News From Around The Web: October 19, 2016