Pot Shop Owners Worry They’ll Lose Customers If Halt On OCS Deliveries Stretches On & More Canada News

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Pot shop owners say they’re worried they will lose customers and run out of product if a halt on Ontario Cannabis Store deliveries stretches on and consumers turn to the illicit market.

The stores say they have been left with no other choice but to make do with the stock they have after the provincial pot distributor informed them Monday that a cyberattack faced by one of its logistics partners had left it unable to process or deliver orders to marijuana shops and customers.

The OCS has said there is no indication that its systems were targeted or its customers’ information was compromised during the Aug. 5 attack on the parent company of its third-party distribution centre, Domain Logistics.

“Out of an abundance of caution to protect OCS and its customers, the decision was made to shut down Domain Logistics’ operations until a full forensic investigation could be completed,” the OCS said in a statement.

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Sean Kady says his Cosmic Charlies pot shop in Toronto has a good supply of product right now, but has heard of rivals that are “pulling out their hair” because their stockpile is dwindling.

Lisa Bigioni, who owns the Stok’d cannabis chain, estimates she has enough marijuana to keep her stores stocked for a week but worries about the halt on deliveries continuing past that.

Because it’s unsure of when deliveries will restart, High Tide Inc., which is behind the Canna Cabana chain, says it is reallocating inventory from lower volume stores to higher volume ones.

A worker examines cannabis products at the Ontario Cannabis Store distribution centre. The OCS said Monday evening there is no indication that its systems were targeted or its customers’ information compromised during the Aug. 5 attack on the parent company of its third-party distribution centre, Domain Logistics. (The Canadian Press)

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The OCS has not offered a timeline for how soon it could be making deliveries to customers who shop for pot on its website or the roughly 1,333 licensed cannabis stores, which must buy the products they sell from the government-backed OCS. 

Domain Logistics did not immediately respond to a request for comment, but the OCS said it is working closely with the company and third-party cybersecurity experts to conduct an investigation, which is underway and expected to be completed within the coming days.

An OCS letter to retailers obtained by The Canadian Press said the launch of any new products scheduled for this week will now be “delayed until further notice.”

“As a goodwill gesture,” the OCS will also waive all retailer delivery fees until Sept. 30 and a $500 processing fee for one emergency order per store between Sept. 1 and March 31, 2023.

Delivery halt follows May data breach 

The incident follows an OCS announcement May 11 that the Ontario Provincial Police were investigating the “misappropriation” of confidential store sales data.

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That breach “was no failure of IT security or systems,” the OCS said, after it quickly launched an investigation to identify the source, restricted access to internal data reports and notified the police.

Both breaches came amid heightened competition in Ontario’s cannabis industry, which has seen the number of pot shops explode in recent months.

Many predict store closures are on their way because demand for cannabis has not increased at the same rate as shop openings, the illicit market remains strong and stores are consistently having to reduce their margins as rivals steadily drop prices.

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