Similar to microsoft/vscode-python#3332 but with a different error message.

Environment data

• VS Code version: 1.29.0
• Extension version (available under the Extensions sidebar): 2018.10.1
• OS and version: Windows 10 Enterprise 1809 OS Build 17763.55
• Python version (& distribution if applicable, e.g. Anaconda): Python 3.7.0 64-bit, Anaconda
• Type of virtual environment used (N/A | venv | virtualenv | conda | ...): conda
• Relevant/affected Python packages and their versions: N/A

Actual behavior

With this code

#%% [markdown]
# ## This is markdown
print("Hello World!")

It does not run cell and pops up an error dialog described below.

Expected behavior

I expect it to run python interactive and show the integrated jupyter notebook without errors.

Steps to reproduce:

Upon clicking "Run Cell", it tries to start jupyter, opens the "Python Interactive" window with blue progress bar, then shows a popup that says "Running cells requires Jupyter notebooks to be installed."

Jupyter is installed in my base and in my conda env. I can run "jupyter notebook" from the anaconda prompt and it starts fine from within the same conda env.

Logs

Output for Python in the Output panel (View→Output, change the drop-down the upper-right of the Output panel to Python)

Output from Console under the Developer Tools panel (toggle Developer Tools on under Help)