Second Cup parent company opens its cannabis store

Aegis Brands' Hemisphere Cannabis is pursuing a premium retail experience that guides all consumers to the right product.
Aegis Brands-Aegis Brands Unveils its Retail Cannabis Brand With

Aegis Brands, the new parent company of Second Cup, opened the doors on a new retail banner it hopes will begin to realize its ambitions in the cannabis category.

Hemisphere Cannabis officially opens today at a former Second Cup location in midtown Toronto.

The cannabis retail banner aims to be a premium brand and will include an in-store experience that’s built around “wayfinding” to help guide consumers’ purchase journey.

“With Hemisphere, we’ve created an environment that’s entirely focused on matching customers with the right product for their desired experience – whether they’re shopping for cannabis for the first time ever, for the first time in a long time, or for the first time today,” said Steven Pelton, CEO of Aegis Brands.

Before the end of the year, the company plans to open three more Hemisphere locations in Toronto, one in Ajax, one in Ottawa and one in the capital city’s suburb of Orleans. Though Hemisphere is its first owned cannabis brand, Second Cup previously converted two locations in Alberta into dispensaries through a partnership with National Access Cannabis.

Late last year, Second Cup announced a restructuring plan that would see it become known as Aegis Brands, a new parent company of Second Cup, as well as other companies in a new family of brands (the name change will be made official pending a vote at the company’s 2020 annual general meeting, which has been postponed for later in the year).

The move marked a strategic shift to help the company reinvigorate its business by diversifying its holdings into more brands and categories, namely cannabis and foodservice. It finalized its acquisition of Ottawa-based Bridgehead Coffee in January, adding its 19 locations to the network. Though it said prior to the pandemic that actively pursuing more acquisitions in foodservice would be a priority in 2020, it did not make any mention of it in its Q1 earnings update in June.

Other strategic priorities Second Cup has planned for 2020 include strengthening its franchise model and reducing the number of corporate-owned stores in its network, several of which have been pegged to become Hemisphere locations.

On the coffee front, same-store sales were up 3.2% for Bridgehead and down by 9.7% for Second Cup in Q1, which ended on March 28. For the four week period ending June 13, same-store sales were roughly half of what they were in the same period the year prior, though the company says reopened locations are performing better than expected, achieving 75% of typical sales despite physical distancing measures being in place.

To help mitigate the impact of COVID-19 on its business, Second Cup halted the collection of royalty and advertising fund payments until mid-May, reduced salaries and eliminated positions at its head office and, in April, launched its first ecommerce platform.

This year, the company also made changes to its leadership team across a number of departments. That included bringing on former Roots marketer Mangala D’Sa as the new VP of marketing for Second Cup.