Peter Kenter, Postmedia — How does a former executive at a Canadian chartered bank make the transition to heading up mīhī, an up-and-coming Ontario recreational cannabis retail brand? Part of the genius behind BlackShire Capital Corp.’s investment strategy is its executive in residence (EIR) program that expertly shepherds private equity through the rough terrain of an emerging recreational cannabis sector.
Meet Tom Dyck, CEO of recreational cannabis retail company mīhī and former executive vice president of community banking with TD Canada Trust. Following his retirement from TD, Dyck was approached by BlackShire Capital CEO Kevin Reed to act as a consultant to identify potential retail cannabis investment targets.
“The vast majority of my career at TD was in retail,” says Dyck. “I was responsible for all Canadian branches, 25,000 employees and identifying and evaluating opportunities in communities across the country. I was also the leader for the marketing group in the U.S., when TD first expanded there. I understand the full breadth of retail, from function to line.”
Dyck executed a North American deep dive of recreational cannabis retail start-ups and quickly identified a fatal flaw in their business plans. The vast majority of these businesses were not scalable.
“They were being headed by enthusiasts with little to no business or retail experience,” says Dyck. “For those businesses that might have been scalable, their price tags were astronomical. We couldn’t make sense of it.”
Betting on a victory by Premier Doug Ford in the upcoming Ontario provincial elections, Reed anticipated a private retail cannabis model and approached Dyck for a greater commitment.
“Most start-ups begin with an agonizing search for investment capital,” says Dyck. “Kevin committed $25 million in capital and asked me if I could build a retail cannabis business from the ground up. He saw the financial potential for his PE firm, which is absolutely huge, but needed to engage the right people to seize it.”
Dyck engaged world-class research talent to more fully understand the nature and expectations of modern cannabis consumers. Those efforts included the use of artificial intelligence to scan and digest social media conversations, a literature search involving thousands of product reviews, and both face-to-face interviews and focus groups involving cannabis users. The research indicated that the majority of cannabis retailers were missing the boat by targeting under-30 males.
“Our research shows that this demographic represents only about 30 per cent of users — and they’re particularly price sensitive” says Dyck. “The typical cannabis user is a professional with a median age of 37 and is more likely than average to have a post-secondary degree. About 40 per cent of them have kids at home. They told us they were tired of being stigmatized for using a product they believed was helpful to them. They want to be respected and learn more about how cannabis could be incorporated into their lives in a positive way.”
These deep consumer insights resulted in the development of mīhī — Latin for “for me” — a retail concept that stresses personal, knowledgeable staff, in-store educational resources and a comfortable environment to promote a customer’s journey of product discovery and learning.
The Alcohol and Gaming Commission of Ontario is currently processing licences for 25 retail applicants selected by lottery. mīhī has readied itself for the post-lottery retail environment by locking down over 40 premium retail locations across the province, in both mall and standalone properties.
“We’ve assembled a team of world-class retail talent — designers, branding experts, marketers and compliance professionals — who can take those locations and manage a thousand details behind the scenes to create an on-target retail presence for the brand,” says Dyck. “We are ready to go. Once licensing hopefully gets back on track in the spring, we believe we can reach our target of opening 43 retail outlets within 12 months.“
As an executive in residence Dyck isn’t alone. Doug Berchtold, former president of Sleeman’s, is also hard at work guiding the fortunes of another BlackShire investment in a U.S. based cannabis-infused beverage line. Dyck, like Berchtold, is committed to efficiently assembling the building blocks of a phenomenally successful enterprise.
“We intend to be the most customer-centric cannabis retail company in North America,” says Dyck. “Ontario and a number of close US States could easily support thousands of retail outlets over time, and mīhī is planning to be well represented.”
This story was created by Content Works, Postmedia’s commercial content division, on behalf of BlackShire Capital Corp.