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Second Cup is getting into the weed business

The coffee chain is teaming up with National Access Cannabis to set up pot dispensaries across Western Canada

by Vanmala Subramaniam
Apr 12 2018, 4:20pm

Popular Canadian coffee chain Second Cup is adding a new offering to its menu — cannabis. The company is teaming up with weed clinic operator National Access Cannabis to convert a select number of Second Cup coffee stores into cannabis dispensaries across Western Canada.

“A number of cannabis operators had identified our stores as prime locations for dispensaries and lounges,” Second Cup Chairman Michael Bregman told VICE Money. “The world’s changing with the legalization of cannabis and there are a lot of people exploring how to participate in the sector.”

National Access Cannabis (NAC) CEO Mark Goliger claims that it was Second Cup that approached his company to see how the coffee chain might be able to get a slice of Canada’s burgeoning cannabis industry. “They actually have one of the best real estate portfolios in Canada for retail. A motivated partner is always an opportunity for us,” Goliger told VICE Money.

The venture will begin with roughly 20 stores across Alberta, British Columbia, Saskatchewan and Manitoba, four provinces that allow for the private sector to be part of the cannabis sale and distribution model. “We expect the stores to be in operation by the time cannabis is legalized across Canada,” said Goliger.

NAC confirmed to VICE Money that it has already submitted a master application to the province of Alberta to obtain a license to sell cannabis. Every retail location, however, will have to obtain a separate site license. “We’re going through the appropriate legal channels and once things are approved, we’ll start getting set up,” Goliger said.

Second Cup has been struggling in recent years to beat out the likes of Starbucks, Tim Hortons and McDonald’s for market share, in the hyper-competitive cafe industry — it’s foray into the weed business comes at a time of lagging profits.

Bregman claims that Second Cup’s partnership with NAC does not in any way indicate that the company intends to alter its overall business strategy. “Things are going well. Our cafes continue to be the major focus of the organization and this is more an opportunity we just want to take a look at.”

Weed retail models vary across Canada — Ontario and Quebec have adopted a government-run model where cannabis will only be able to be purchased at designated stores owned by the provinces. But both Bregman and Goliger do not rule out the fact that private dispensaries might eventually be allowed to operate in both eastern provinces — if and when that happens, they hope to have a first-mover advantage.

“An election is coming up. The moment we see light at the end of the tunnel, we will of course have everything ready to make it a reality. But for now it’s just Western Canada,” Goliger said.

Second Cup shares were up 23 percent in morning trading, while National Access Cannabis saw their stock jump 10 percent.

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