With the retail sector starting to re-open due to the COVID-19 crisis, cannabis retailer Tokyo Smoke is looking at expanding its footprint and perhaps continuing to offer delivery service and curbside pickup for customers.
During the closure of stores for the past two months, Tokyo Smoke stayed open by offering Click and Collect curbside pickup and cannabis delivery services – and it did it so well that it was able to retain a significant amount of its customer base.
“We have exciting plans for the expansion of the brand, specifically in Ontario. The recreational cannabis licensing opened up earlier this year,” said Melissa Gallagher, Director of Franchising at Canopy Growth, which owns Tokyo Smoke. “Prior to March of this year, the retail cannabis licensing was done through a lottery system first awarding 25 licences and then through a second lottery awarding another 50 licences.
“Through that process we were able to secure 12 locations in Ontario – 12 of the first 75. Now that licensing has opened we’re really excited to grow that footprint with those existing and new licensees right across the province.”
The company’s Tokyo Smoke location at 333 Yonge Street in Toronto is Ontario’s largest cannabis retail location at 6,500 square feet. The space was formerly occupied by an HMV music store. There are nine Tokyo Smoke locations operating currently in Ontario with three more opening in the coming weeks. There are also five in Manitoba.
Gallagher said the company has locations in Alberta it will be opening once licensing allows.
“We do have aggressive growth targets. We’re primarily focused on Ontario based on the current regulations,” she said.
Tokyo Smoke sells a range of cannabis products - flowers, vapes, oils, capsules, chocolate gummies, and beverages. It also offers cannabis accessories and apparel.
Gallagher said the company is very excited to re-open to foot traffic again but will still offer curbside pick up and delivery for those people who would prefer to shop that way.
She said the Tokyo Smoke business has been resilient through this economic downturn caused by the pandemic. It has been able to focus on the absolutely necessary tasks to help accelerate the business during this challenging time.
The company had been working on its click and collect concept prior to the COVID outbreak.
“We had been really refining the store operations and ensuring that it was a program that was seamless from the user perspective and also from the store perspective,” said Gallagher. “So we had the ability to launch that, which has had an incredibly positive impact on the stores and their ability to safely serve their communities and also retain the business. We do see in some markets some of our stores have been able to retain up to 80 per cent of the sales they were doing pre-COVID,” explained Gallagher.
“The ability to be able to launch programs like click and collect and deliveries has given our licensees’ ability to retain a significant amount of the business.”
She said delivery is currently available under the temporary emergency order in Ontario meaning that until May 29 the Tokyo Smoke stores will be able to offer the delivery service.
“Then we hope if it’s the right thing for the licensees and the province that we’ll be able to continue to offer that for the long term,” added Gallagher, who said it will continue to offer curbside pickup.
“We’ve seen consumer behaviour shift quite seamlessly to curbside pickup. Not just in cannabis but basically across all of retail and we think it’s a seamless way to shop.”
