Ottawa’s newest cannabis storefront is the first retail presence in the capital for neighbouring pot powerhouse Canopy Growth.

The Smiths Falls-based cannabis producer opened its first local store under the Tokyo Smoke brand Monday as the provincial government looks to expand where Ontarians are permitted to get high.

Ottawa’s Tokyo Smoke shop sits at 1000 Wellington St. W. in Hintonburg, just over a kilometre east of the nearby Superette cannabis store down the road. The latest pot storefront joins the Fire & Flower outlet on York Street and Bank Street’s Hobo Cannabis, which is preparing to open a second location in the ByWard Market.

Steve Cochrane, owner of the 3,400-square-foot shop, received his retail licence in the Ontario government’s second-wave lottery for applicants interested in running a brick-and-mortar cannabis operation.

At Monday’s grand opening, Cochrane told OBJ he was pleased with the “vibe” of his new storefront, which carries the Tokyo Smoke brand. He said he struck a deal with Canopy Growth’s retail arm soon after receiving his licence, and remarked that he wouldn’t have been able to prepare such a store without the cannabis giant’s support. Canopy acquired Tokyo Smoke’s parent company in a $269-million deal in 2018.

Ottawa’s Tokyo Smoke is lined with shelves advertising a variety of dried flowers, pre-rolled joints – not solely from Canopy’s in-house brands – and various pot accessories such as vapes and even apparel. The shop also currently has two chocolate brands in-store for edible-minded consumers, though Canopy’s director of franchising Melissa Gallagher said it’s still “early days” for the edibles and derivatives market.

The interior of Tokyo Smoke in Ottawa on its grand opening day, Mon. Feb. 10.

Tokyo Smoke's selection of vaporizers.

A sample of cannabis product in Tokyo Smoke's Ottawa store.

Gallagher told OBJ Monday that Tokyo Smoke hopes to stand out from the crowd with a focus on education. Prospective customers are greeted by a Tokyo Smoke employee when they enter the shop, who can point them towards the right product for the particular kind of high they’re after.

Gallagher said that after nearly a year of retail experience, the Canopy team has learned that consumers are best served by a guiding hand – someone who can teach them about new cannabis forms coming onto the market.

“What we always say is, ‘Start low and go slow.’ So ensuring that they can really take ownership over their experience with cannabis.”

Canopy Growth takes each Tokyo Smoke team through a five-day training course before a shop opens up to the public, running customer service reps through the basics of retail as well as health and safety standards. Gallagher said more than 30 people currently work at Ottawa’s Tokyo Smoke shop with roughly 10 in-store at any given time.

The Tokyo Smoke brand is largely active in the Greater Toronto Area, where the company operates two pot retail operations and other shops focused on cannabis culture and accessories. In addition to the Ottawa outlet, Tokyo Smoke announced plans in early January to open nine new cannabis retail stores in Ontario by May, with four in Toronto and the rest in smaller communities.

Though she couldn’t confirm any other locations currently planned for the National Capital Region, Gallagher stressed the geographic value of Ottawa being just a stone’s throw from Canopy’s Smiths Falls headquarters.

“Ottawa is an important market to Canopy; we’re local here. We’re excited to be able to build here,” she said.

Steve Cochrane (left), owner and operator of Tokyo Smoke in Hintonburg, with Melissa Gallagher, director of franchising at Canopy Growth

Ontario government considers cannabis for lounges, public events

Gallagher also signalled Tokyo Smoke’s excitement regarding news Monday about some proposed changes to cannabis regulation from the Ontario government.

The Progressive Conservative government said it is considering allowing cannabis lounges and cafes as it moves toward an open market for pot in the province, and is asking the public to weigh in on the proposal.

The government said Monday it will consult on the possibility of so-called “consumption venues” as well as special occasion permits that would apply to outdoor festivals and concerts.

In a posting on its regulatory registry, which closes March 10, the government said it wants to hear from the public before committing to any direction, and gave no timeline to make changes.

“We are asking Ontarians to share their feedback as we explore certain expanded cannabis-related business opportunities as part of our responsible approach to protecting families and communities,” Attorney General Doug Downey said in a statement. “What we hear from the public and expert groups will help to inform possible next steps.”

Gallagher told OBJ the prospect of opening up “consumption lounges” under the Tokyo Smoke banner was an “exciting thought” as the brand prepares to launch its own line of vapes this coming spring.

The PC government has said its ultimate goal is an open cannabis market, but a supply shortage forced it to start with a limited lottery system for retail licences shortly after marijuana was legalized in 2018.

In December, the province announced it was doing away with the controversial lottery system that was criticized as a cumbersome process preventing the province from staying competitive.

The Alcohol and Gaming Commission of Ontario said it has received more than 700 applications for retail operator licences since the system was scrapped on Jan. 1.

Downey said allowing greater competition in the retail sector will help combat the black market.

“Ontario continues to take a responsible approach to cannabis retail sales across Ontario, allowing private sector businesses to build a safe and convenient retail system to combat the illegal market while keeping our kids and communities safe,” he said Monday.

Robyn Rabinovich, a business strategy lead at strategy firm Hill+Knowlton who advises cannabis sector clients, said the proposal could legitimately help the Tories advance their goal of combating the black market by giving consumers another option to buy legal cannabis.

“There's a lot of opportunities for businesses like cafes and restaurants to start making steps into the cannabis industry,” she said. "This could ensure it's done in a regulated and safe way.”

Rabinovich said special occasion permits would give the government a chance to further regulate cannabis use in some public spaces and acknowledge the reality of post-legalization Ontario.

“If you're at a music festival and you look around, it's clear that cannabis is being consumed,” she said. “If they were to organize it and regulate it, it may not be in the presence of minors or be causing any harm to others at the event.”

Ontario's previous Liberal government was exploring the idea of cannabis consumption lounges in 2018, announcing consultations just months before it was defeated in the most recent provincial election.

– With files from Canadian Press