Ontario retailer shakes up the legal market with its ‘hyper-inclusive’ approach
Drummond Munro found inspiration for a small but substantive detail within his company’s cannabis retail shop from perhaps the most unlikely of places: a hardware store in Oklahoma.
Along one wall at Superette, a provincially licensed dispensary in Ontario, Canada, sits two stacks of shopping baskets. They’re the same plastic baskets that are found in millions of supermarkets, drug stores and bodegas across North America — one stack green, one stack red, each with black handles. Above the green stack, a sign reads: “Let’s Talk.” Above the red stack: “I’m Good.”
It’s an amazingly simple system for allowing Superette customers to shop however they want to shop, signifying at a glance whether they want to speak to a sales associate or just be left to browse. Just like shoppers at the Oklahoma hardware store, not everybody who walks into Superette wants to be guided.
“If I know what I’m looking for, I don’t need to have that conversation,” says Munro, the co-founder and president of Superette.
The baskets are symbolic of the retailer’s entire approach to cannabis: fun, friendly, nostalgic and hyper-inclusive.
“We know cannabis is very personal and everybody wants something different,” co-founder and CEO Mimi Lam says. “We wanted to make it inherently comfortable.”
Implementing the red/green basket system has been a success — and a defining characteristic of the award-winning retail brand.
“Now I wish all stores across all industries had that,” Lam says.
Although Superette is a relative newcomer in the cannabis scene, it’s already attracted the attention of local business groups and cannabis industry professionals. The company was selected by the Ottawa Business Journal and the Ottawa Board of Trade for a Best Ottawa Business Award in October. That honor was followed by four awards at the Lift & Co. Canadian Cannabis Awards in November (top retail store, top budtender, startup of the year and the Womxn in Weed: Trailblazer Award for Lam) and a bronze medal for brand design at the Clio Cannabis Awards.
Before undertaking their own startup, Lam, who has a background in investment banking, and Munro, who comes from mainstream retail, first worked together at Tokyo Smoke, starting in 2017.
The concept behind Tokyo Smoke was that cannabis would be no different than other consumer packaged goods, and the company could build its brand through adjacent industries like coffee and clothing. When Canopy Growth acquired Hiku Brands, the parent company of Tokyo Smoke, in the summer of 2018, Lam says both she and Munro were offered “pretty nice jobs” at Canopy.
“We were at a fork in the road,” she says. “We could take these roles at this large company or we could try to do something special ourselves.”
They decided to leave Tokyo Smoke and in late 2018 started working on the company that would become Superette.
“We both had that entrepreneurial itch,” Lam says, “and we also found there was a huge gap in the retail vertical.”
At the time, as Canada and a relatively small number of licensed companies were bounding headlong into the new world created by federal legalization, it seemed every cannabis retailer aspired to be the next Starbucks, the next Apple Store, the next Sephora. MedMen was a “beacon” that many publicly traded companies tried to mirror, Lam says.
“There was a lot of focus on the retail side of things to be luxury, tech-forward.”
While most of the remaining, pre-legalization dispensaries and early entrants into brick-and-mortar cannabis retail have maintained the understated, hole-in-the-wall headshop style that was so prevalent at the dawn of decriminalization, the new retailers, both in the United States and Canada, both medical and recreational, have generally taken a hard turn the opposite direction. They’ve gone upscale and high-end, akin to jewelry stores and fine dining, or they’ve gone clinical to the point of white lab coats and the quiet air of important business.
“We thought that was kind of weird,” Lam says. “The traditional stoner market was being alienated by the luxury spaces; the legacy markets were alienating the new consumer.”
That left a gap for companies that could appeal to both demographics — a company that could do more than just claim to be the “future of cannabis,” a company that could be inclusive and “focus on customer experience and not just the bottom line,” as Lam puts it.
Superette aims to split the difference between high-end, corporate cannabis and the renegade, unregulated market.
“We’re not shy about the fact that we’re working with cannabis. And we want to have fun with it and we’re not afraid to say that,” says Lam, who spends the majority of her time on strategy, business development and managing the team of 10 employees at the corporate level and more than 40 in retail operations. “It’s really easy to hide behind the stigma, but that doesn’t create conversation.”
Lam adds that it’s been very positive to be able to engage with the community and make sure people recognize Superette as good neighbors.
“All you need is a few good spokespeople to move this industry in the right direction,” she says.
A Modern Classic
When Superette opened in April 2019 in Ottawa, it was unlike any other cannabis retailer in Canada or the United States.
Combining elements of a 1950s-style diner with a modern convenience store, it was nostalgic without feeling old; it leaned into the culture of cannabis without the heavy-handed imagery of pot leaves; it created a connection with shoppers without the ubiquitous technology favored by other marijuana brands.
Munro says he’s always been fascinated with the “consumer journey,” and never understood why there was such a distinct gap between traditional retail and cannabis retail.
“Because (cannabis) is a new industry, it sort of skipped all the steps at the beginning and moved to what people expected it should be, which was digital,” he says. “We wanted to bring more traditional retail practices to our approach.”
Although Superette’s look feels deliberate, Lam says the in-house design process was rushed between acquiring a license, scouting a location, signing a lease and getting the store up and running for April 1, the first day cannabis sales would be allowed in the province of Ontario.
“We made it up on the fly as we went along,” she says.
As they were doing the buildout, somebody would shout out a suggestion.
Do we want these shelves?
Do we like how this looks?
Do we want the vintage fridge?
It was an exercise in flexibility and creativity — and even since opening in April, the in-store experience has changed dramatically.
“What this industry is so focused on is being right, whereas I don’t think there is a right answer,” Lam says. “We’re good at identifying elements that are true and authentic to us and our brand and then trying it out. If it works, great … and if it doesn’t, we’ll try something else. Every day we think of ways of improving.”
And business, so far, has been “incredible,” she says.
Sales have increased steadily month over month, totaling about $12 million in revenue in the first seven months of operation.
“I don’t think we could have asked for a better year since Mimi and I left after the Hiku acquisition,” Munro says. “I don’t think any of us could have guessed it would have gone like this. The Canadian cannabis industry changes daily, so just keeping up with everything is a challenge.”
Being on the retail side allows the company to get the pulse of what consumers are looking for. While most shoppers are still attracted to high THC content, they’re also looking more at terpene profiles (fruity strains tend to be particularly hot right now), a sign of the rising level of cannabis education among customers in the short time the store has been open, Lam says.
Lam looks forward to the next step in Canada’s legalization program — often referred to as Cannabis 2.0 — in which edibles and infused beverages will be available. The first products were expected to hit the market in December, with most brands beginning national distribution in early 2020.
“That variety is very much needed,” Lam says.
Lam and Munro are not the type of people to rest their laurels on a handful of awards and a single, successful location in Canada’s capital.
2019 may have been the foundation — “the year where we got our hands dirty and got our name out there,” Lam says — but 2020 will be about growth, both in terms of retail locations and in Superette-branded cannabis products and adjacent brands.
The company already has a second retail location planned in Ontario and is looking at opportunities outside the province and outside Canada. In an ideal world, Lam says, the company could open its first Superette location in California in six to 12 months.
“We’re constantly looking at the greater Canadian landscape and we’re incredibly bullish on bringing the brand down to the U.S.,” Munro says.
Since closing the acquisition of Hiku Brands in September 2018, Canopy Growth’s standing as the international leader in cannabis has been nothing if not tumultuous. The company’s stock spiked right when cannabis went legal in Canada, October 17, 2018, then plummeted before the end of the year, before rebounding in early 2019; Hiku Brands CEO Alan Gertner left the company in January 2019; Canopy co-founder and CEO Bruce Linton was ousted in July — yet, the Constellation Brands-backed enterprise remains the largest cannabis company in the world with a market cap of $5.5 billion as of November 2019.
When asked whether he thinks maybe it would have been easier or better to stay with Canopy, Munro pauses for a moment.
“No,” he says flatly. “Absolutely not.”
The experience before starting Superette was invaluable, Munro says, particularly from the standpoint of tackling the regulatory landscape and learning how to connect with customers, but it was time to do something new and different.
“The journey at Tokyo Smoke from one café to the acquisition by Canopy was an incredible ride, an incredible rollercoaster and really gave us our bearings in this industry,” he says. “For us to go from that to being bought by the largest cannabis producer on the planet, we hit what we came to do. It’s now our turn to bring something unique to the market.”