Second Cup Ltd. is hoping to convert some of its more than 130 cafés in Ontario into marijuana dispensaries now that the province has cleared the way for private sector pot sales starting April 1.

The Canadian coffee chain and its partner, National Access Cannabis Corp. (NAC), a network of medical cannabis clinics, announced Wednesday some of the current Second Cup locations could be converted into Meta Cannabis Supply Co.-branded recreational pot dispensaries.

The conversions would happen only after a consultation process with Second Cup, franchise holders and landlords to determine if the locations would be more profitable as pot shops, said Mark Goliger, chief executive officer of NAC, a marijuana clinic operator.

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Goliger said Thursday that a ballpark estimate of 50 locations may be converted.

“It’s going to be a subset,” Goliger said, noting that some Second Cup locations near schools and hospitals, for example, would be deemed immediately unsuitable. And some municipalities may opt out of allowing any recreational pot shops.

Private sector bricks-and-mortar pot shops are to be allowed in Ontario by April 1 to sell to adult consumers. Until then, a government site will sell recreational pot online.

He also said the converted stores would not display Second Cup branding and would not be pot cafés, since Ontario has not yet said it will allow such sites where the drug can be publicly consumed.

Goliger said the possibility of setting up coffee shops where cannabis is sold could be considered if the province allows it, but the focus now is on operating two distinct businesses.

“Second Cup is not selling pot,” he said, adding that conversion of some Second Cup locations into cannabis-selling outlets would likely create jobs.

Goliger said long-term leases on the converted stores could remain with Second Cup, with NAC holding sub-leases, adding that the companies will split dispensary ownership, with franchisees taking a portion of Second Cup’s earnings.

Canadian-owned Second Cup, the country’s second-largest specialty coffee retailer, has been buffeted by competition from rivals including Tim Hortons and Starbucks. But it did see some improvement in its financial performance in the second quarter ending June 30, posting a $577,000 profit compared to a loss of $315,000 in the same period a year ago.

“The business has been challenged, but they’ve got some prime real estate, so I think this is a strategy that makes sense,” said Robert Carter, food service analyst at market research firm the NPD group. He said the move offers an exit strategy from unprofitable stores along with the potential for new revenue streams.

NAC and Second Cup announced their strategic alliance in April and said they would develop a network of NAC-branded and -operated recreational cannabis stores in Western Canada by jointly applying for retail dispensary licences from provincial regulators. Provinces in Western Canada had announced that private recreational marijuana retail will be allowed later this year.

NAC’s Meta retail brand is targeting 2018 openings of retail stores in Manitoba and is recruiting employees to be trained for Canada’s retail launch, which is expected to begin Oct. 17.

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“The recent provincial announcement for private cannabis retail in Ontario provides an opportunity to enhance the national plans we have,” said Goliger.

“Our strategic alliance with National Access Cannabis allows Second Cup to leverage our real estate assets to increase value for our franchisee partners and our shareholders while maintaining focus on our primary objective of being the specialty coffee brand of choice across Canada,” added Garry Macdonald, Second Cup’s CEO, in a statement.

“NAC has developed a strong reputation as a leading operator in the cannabis industry and the opportunity to activate our partnership in Ontario, Second Cup’s largest region, is a strong growth opportunity for our two businesses.”

Clarification — Aug. 17, 2018 - This article was edited from a previous version that said National Access Cannabis Corp. is a marijuana distributor. In fact, it is a network of medical cannabis clinics.