FIKA Herbal Goods’ takes its namesake from the Swedish concept of (essentially) stopping to smell the roses, but the Toronto cannabis retailer’s rapid expansion into the market was anything but.
Within the span of nine months, it went from opening its first location in the Distillery District last August to running 16 stores across the GTA and as far afield as Aurora.
“I’m not going to say it was easy,” says chief operating officer Christopher Kane. “That’s a lot of stores in a short period of time.”
Nor is it easy to carve out a distinct customer base at a time when, in downtown Toronto, there appears to be a cannabis retailer (sometimes several) on every block. The industry has worried about oversaturation in dense urban markets for years. But FIKA has plans to expand. In March, the company announced two new locations at CF Fairview malls in Toronto and Kitchener.
Kane spoke to the Star about his company’s rapid expansion, getting institutional landlords on board with a cannabis retailer, and how FIKA would respond to market overcrowding:
The concept of ‘fika’ is Swedish. The closest English translation I found is ‘coffee break’, but it seems to refer to a broader idea of taking time for oneself. What made FIKA decide to use it as the guiding ethos for your company?
We just love everything ‘fika’ stands for. You nailed exactly what it is — it’s a coffee and treat break — but it’s really much more than that. It’s a powerful state of mind and, really, one that encourages you to pause and enjoy the everyday beauty in life. To pause every day to connect to the people and things that bring you happiness, to take a breather as a philosophy and a mindset. That inspires everything we do at FIKA.
Have you had any Swedish customers who’ve heard of your company name? What do they think of it?
Yeah, we’ve actually had a few, and they loved it. They find it amazing that we’ve named it FIKA — and they obviously know what exactly FIKA stands for — whereas most people like yourself or like me, when I joined the company, had to look up what FIKA stood for.
When FIKA started looking for real estate, was there a specific kind of cannabis companies were seeking?
Everybody was looking for Main & Main. They wanted to go where the traffic was. We did a lot of due diligence on the site selections. With FIKA, right now, we have an incredible relationship with many of the institutional landlords out there. We deal with Cadillac Fairview, with Dream Properties, with Primaris, with SmartCentres. All of our sites are through those key institutional landlords. We found a way with our model and took a different approach. When we presented our brand to the landlords as to what we wanted to do, our whole goal was to get the stigma away from cannabis and put a shop in these locations that anyone would be proud of.
What was the reaction of Cadillac Fairview when you told them you wanted to open up a cannabis store there?
We took an authentic approach. We really showcased what FIKA was all about and what our vision was. We really showed them everything that we were doing with our award-winning store design and we gave the landlords the confidence to incorporate cannabis retail into the best assets in their portfolio. And it worked. I’m really excited to say we will be going into Union Station this summer. Who would have ever thought, two years ago, that there would be a cannabis shop in Union Station?
Cannabis stores can have a very sterile and tech vibe to them. Your stores seem to be very warm, almost decadent. Why did you decide to make that design choice?
We simply set out to design and operate the best cannabis stores in the world. Really, we wanted to remove the stigma of cannabis — and we didn’t want to have iPads and menus in our stores. At the heart of our operation is our ambassadors and the educational experience that they bring to the consumers that come into our shops every day, whether you’re a novice consumer, whether you’re an experienced consumer, whether it’s your first time in our store.
I always like to say we’re building our stores where you feel comfortable bringing — obviously, if you’re of age — your best friend, your significant other, your mother, your grandmother, your aunt. We’re trying to build a comfortable and warm environment, and give you the best possible customer experience.
Your stores look very high end, but you’re also rapidly expanding into malls. Do you consider yourself a boutique cannabis firm? Who do you consider your ideal customer?
That’s an interesting question. I’ve never really thought of FIKA as a boutique cannabis retailer. The goal was to build a store that was comfortable. That anyone could go into and, more importantly, provide education to any consumer that comes into our stores so they purchase what’s right for them. We’re happy if someone comes into our stores and we just provide education. Maybe they don’t buy something that day. We truly believe that by providing that educational component — and we invest a lot in education at FIKA.
Are there any specific demographics that stand out among FIKA customers?
I would say the majority of our customers range between 26 and 40, but we get Baby Boomers, we get Generation X, Millennials — anyone that’s of age. It really is a mix of all generations, and we definitely consider that when choosing the products we bring in and how we set up our stores.
In Toronto, there are cannabis stores absolutely everywhere. Overcrowding may choke out some of them just because there aren’t enough customers to make all these stores profitable. How does FIKA intend to operate in Toronto?
There’s definitely oversaturation in some markets. From the analysis I’ve looked at, a lot of it is in certain pockets in the GTA. There are certain markets in Ontario right now that aren’t oversaturated — this is why our real estate strategy is of the utmost importance to us. We carefully select the right site in every market we enter.
But there’s no secret that there’s oversaturation. We definitely look at that and we carefully curate our real estate investment portfolio because FIKA is in this for the long term, and we want to make sure we’re in markets that we know are going to continue to grow.
Where is that growth market for you?
That’s a tough question to answer. Even in Toronto, there are growth markets. If you go down Queen St, obviously, there are a lot of stores — and we’re not on Queen St. But there are certain pockets in Toronto, and in Ontario, where there is opportunity to grow.
Does FIKA have a strategy in the event it is surrounded by competitor stores?
We’re very set on our vision. We’re focused on growing the FIKA brand in all the markets that we’re in. We are going to do everything we can to grow the shops in our locations — and we’re very confident with where we’ve positioned them. As I said earlier, we’re in this for the long term.
It’s no secret that there has already been attrition in cannabis retail. We’re just going to continue with our best-in-class training. We’re going to continue to listen to our customers and continue to give them a great shopping experience that’s second to none. Most importantly, we’re going to continue to add great people to the FIKA team. They’re truly at the heart of our operation. It’s a very competitive business right now and we’re going to continue to do what we’re doing. And we love what we’re doing We truly believe we’re reinventing cannabis retail.
What strains are you smoking or using these days? I’m curious as to what’s on your radar personally, as a consumer.
I would say I am not a big alcohol user. Same thing with cannabis. I’ve tried certain strains and I have very good cannabis knowledge for being in the business as long as I have. I’ve become a fan of edibles. And I’ve become a fan of high CBD products. I’m still working my way through the plethora of products that are out there.
CBD gummies, I find, are really good. I don’t really have I would call a personal preference, but I do like the innovation of edibles. I’ve also tried a few of the beverages, which I think are going to be a growing product category over time. We built our stores with three refrigerators in each of them with a great assortment of beverages. We’re doing very well with them.
This interview has been edited for length and clarity
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