Tokyo Smoke Goes Public As Cannabis Companies Eye Retail

Article by Mark Rendell, Financial Post

Tokyo Smoke goes public as cannabis companies eye retail The company has seven coffee shops, in Toronto, Calgary and Kelowna, and wants to open more to serve the pot community. Alan Gertner CEO of Tokyo Smoke poses for a photograph at his business in Toronto on Tuesday, March, 2016. THE CANADIAN PRESS/Nathan Denette

In six months, buying a gram of weed won’t be that much more difficult, for adults in some provinces at least, than picking up your morning cappuccino. What company becomes the Starbucks of the industry, however, remains to be seen.

Tokyo Smoke, owned by TS Brandco Holdings Inc., has been trying to manoeuvre into this position since 2015, carefully cultivating a hip, cannabis-centred lifestyle brand in the lead up to recreational legalization. On Monday, it merged with Kelowna, B.C.-based licensed producer, DOJA Cannabis Company Ltd., to create a new company, Hiku Brands Company Ltd., which listed on the Canadian Securities Exchange Wednesday.

“Starbucks essentially built a nomenclature for coffee in North America, and we think there’s the opportunity to do the same for cannabis”

“Someone is going to define the modern retail experience for Canadians, if not the world. Starbucks … essentially built a nomenclature for coffee in North America, and we think there’s the opportunity to do the same for cannabis,” said Alan Gertner, CEO of Tokyo Smoke and now Hiku.

Unlike many players in Canada’s emerging cannabis industry, Tokyo Smoke has largely ignored cannabis production, focusing instead on creating a recognizable brand and a network of retail stores that can be converted into dispensaries next summer in the provinces — B.C., Alberta, Manitoba, Saskatchewan and Newfoundland and Labrador — where private retail is expected to be legal. The company has seven coffee shops, in Toronto, Calgary and Kelowna, and expects to have many more leases signed in the coming months, Gertner said.

“Consumers choose brands and retail, that’s how they make buying decisions in other industries, and they’ll do the same in cannabis,” Gertner said.

This fact, which is quickly being grasped across the industry, means a huge shift in the way companies look at branding, said Matt Webb, co-founder of Vancouver design agency Webb Creative, which has worked on branding with companies like Doja and Broken Coast Cannabis.

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