Second Cup’s parent company has opened its first recreational cannabis dispensary on the site of a former café in Toronto and has announced plans for more dispensaries under its new retail brand, Hemisphere Cannabis Co.
Mississauga-based The Second Cup Ltd. will open six more Hemisphere Cannabis locations in Ontario by the end of this year, in Toronto, Ajax and Ottawa. The company also plans to launch e-commerce orders for delivery and curbside pick-up.
Six out of the seven planned locations will also be conversions of former Second Cup cafés.
Second Cup has been closing underperforming locations for some time. At its peak in the 1990s, Second Cup had 400 stores; by late last year it had 252, and as of the end of its first quarter on March 28, it had closed 10 more.
The company is working to expand its business beyond its namesake cafés. Last November, the parent company announced it would change its name to Aegis Brands Inc. to reflect its broader focus, including plans to acquire small- to medium-sized foodservice businesses. (The cafés will continue to operate under the Second Cup brand.) The corporate name change will take effect pending shareholder approval at its upcoming annual general meeting.
In December, Second Cup announced the $9.5-million acquisition of Bridgehead Coffee, which operates 19 cafés in Ottawa and plans to expand to Toronto.
Second Cup has been working on its plans to enter the recreational cannabis space since 2018, when it launched a joint venture with National Access Cannabis Corp. to open cannabis dispensaries. Last year, it began work to convert two cafés in Calgary to this model. However, the company confirmed on Friday that the joint venture has expired and that it abandoned the plans for the stores in Calgary, which remain in operation as Second Cup cafés.
“I can confirm that Aegis no longer has a business relationship with National Access Cannabis, and that Hemisphere Cannabis Co. is a stand-alone brand owned and operated exclusively by Aegis,” chief executive officer Steven Pelton said in an e-mailed statement on Friday.
Second Cup was granted its licence to operate cannabis retail in Ontario on April 1.
The new Hemisphere brand is planning more stores beyond the first seven announced on Thursday, Mr. Pelton said in a statement. The stores will also tap into "shared services" with the company's other retail businesses, he said.
The first converted locations are corporate-operated Second Cup stores. The company wanted to test the Hemisphere concept in corporate cafés “before engaging our franchisee network,” Mr. Pelton said.
Like many foodservice businesses, Second Cup was hit hard by closures related to the COVID-19 pandemic. It shut down 130 of its Second Cup locations and all 19 Bridgehead locations in mid-March. All Bridgehead locations and about three-quarters of the Second Cup locations were reopened at the end of June. When it reported first-quarter earnings on June 22, the company’s management said they were “engaging in discussions on various options to enhance liquidity.”
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