Pita Pit, WeedMD launch cannabis joint venture

Pioneer Cannabis looks to help franchisees get their retail locations off the ground.

Pita Pit has launched a new joint venture with licensed producer WeedMD to help entrepreneurs launch their own cannabis retail stores.

Dubbed Pioneer Cannabis Corp., the new joint venture will provide would-be franchisees with a range of services to get their cannabis retail location off the ground, including identifying locations, assisting with licensing and security, point of sale and payment systems, as well as marketing and training platforms that will include cannabis educational programs.

Pioneer will be led by Kristie Smith, who is taking on the role of president for the venture after more than seven years with Pita Pit, most recently as its director of development. Other executives include CEO Jordan Schwartz (who was most recently managing director at Serruya Private Equity) and chief development officer Alexander Liszka (most recently senior legal counsel at architectural, engineering, design and tech company IBI Group).

Founded in 1995, Pita Pit has more than 225 locations across Canada and 600 globally. None of the QSR’s current locations are expected to be converted into cannabis retailers; rather, it is hoping to utilize Pita Pit’s expertise in retail and franchisee relations – as well as WeedMD’s expertise in cannabis – to help small business owners get their ventures off the ground.

“Pioneer brings an opportunity to those entrepreneurs interested in joining the cannabis industry, but who may not have the financial backing or the operational experience to pursue opening their own retail cannabis store,” Smith said in a release. “Through this collaboration of established Canadian companies, we are paving the way for small businesses to participate in the emerging retail cannabis space that will promote local economic growth and opportunities.”

Over the weekend, the Ontario government announced the recipients of the first 25 licenses to operate physical cannabis retail spaces in the province. No established licensed producer or cannabis retail company appeared to be among the winners, with the licenses going to a mix of individuals, sole proprietorships and numbered company.

A franchise model has become a popular way for entrepreneurs to enter the cannabis market and for retail companies to expand their networks in the new category. Companies like Choom, Inner Spirit Holdings, and Westleaf Cannabis spent much of 2018 revealing store concepts and securing franchise agreements. This also isn’t the first time that a company with an established retail presence has partnered with a cannabis company to explore the category: last year, National Access Cannabis announced a partnership with Second Cup to turn certain coffee shop locations into dispensaries.

While Keith Merker, CEO of WeedMD, told The London Free Press that Pioneer isn’t currently courting any of the lottery winners, some – such as Starbuds, which has been among the most proactive in trying to enter Ontario’s cannabis retail market – have been reportedly pursuing the winners. Becoming a franchisee of an established company might be an attractive option for the license winners, if they haven’t become one already: operators who aren’t operational by the government’s start date of April 1 face a $12,500 fine, while those not open by the end of the month face a $50,000 fine.