British Columbian cannabis stores are bracing for emptier shelves after a strike stopped the province’s pot distribution centre from shipping out product.
The British Columbia General Employees’ Union (BCGEU), which represents about 33,000 public-service workers across B.C., set up picket lines Monday at four BC Liquor Distribution Branch (BCLDB) wholesale and distribution centres.
Retail liquor and cannabis stores are not part of the strike launched over wages, but the cannabis division of the Burnaby customer care centre is part of the job action, the union said.
In response, the BCLDB announced its cannabis distribution centre will not accept or ship product, assemble orders, or process invoices or purchase orders.
“We sincerely apologize for this disruption and for the impact to your business,” the BCLDB said in a note to stores published on its website.
The province was preparing to allow cannabis stores to accept direct deliveries of product from licensed producers long before the strike began, but until those deliveries start, stores have no choice but to get their products from the BCLDB.
“The BC Liquor Distribution Branch recognizes the current job action being taken by the BC General Employee’s Union may be concerning to wholesale and retail customers,” it said in a release, noting that BC Cannabis Stores online is also unable to fulfil or deliver customer orders.
“We do not know the extent of any future job action and therefore cannot speculate on the inventory levels held by wholesale customers nor customer demand and buying behaviours in this dynamic environment.”
Vikram Sachdeva estimates his B.C. chain of Seed and Stone stores has a good supply of products right now, but that could quickly change, if the strike drags on.
“I’m hoping that we can survive for a week or a little bit longer, but beyond that point, it’s going to be very difficult,” he said.
Sachdeva wishes stores were notified earlier about the delivery stoppage, so they could have stocked up on products.
“It just came as a bit of a shock and…now the concern is how long before they start delivering to us so that we don’t start running out of products?” he said.
He added he will be disappointed if he has to turn away consumers for lack of product, especially if they are seeking cannabis for medical reasons.
Sachdeva, the Retail Cannabis Council of BC and the BC Craft Farmers Co-op fear consumers may turn to the still popular illicit market if they can’t find cannabis stores with stock left.
“If the current job action is extended and cannabis sales are disrupted, the big winner will be B.C.’s illicit cannabis market,” a joint Wednesday statement from the council and co-op said.
“B.C. consumers are not going to stop buying cannabis during this dispute, rather they are simply going to lose access to safe, tested, legal products.”
They called on the government to share its plan within the next 48 hours to ensure cannabis can be legally distributed while labour negotiations continue and urged the province to accelerate direct-to-retailer sales.
They said the disruption highlights “the need for alternative legal cannabis distribution systems that bypass the provincial government’s expensive monopoly.”
High Tide Inc., which is behind the Canna Cabana chain of stores, also pressed the province to take action quickly.
“For the time being we are managing the situation by reallocating inventory between our British Columbia stores, but if the job action is not resolved within the next 10 days, we could face inventory issues,” said senior vice-president of corporate and public affairs Omar Khan, in an email.
“We urge the BCLDB and the BCGEU to resolve their dispute as soon as possible, as lack of inventory at licensed cannabis stores risks driving consumers back into the hands of the illicit market, which will endanger public health and drive much needed revenue away from government coffers.”
His remarks come a week after the Ontario Cannabis Store (OCS), the province’s pot wholesaler, temporarily stopped making deliveries to marijuana shops.
The stoppage of deliveries to Ontario’s 1,333 cannabis stores stemmed from an Aug. 5 cyber attack affecting Domain Logistics, the company behind the OCS’s third-party distribution centre.
The OCS has restarted deliveries again, after an investigation into the matter, but temporarily capped the amount of product pot stores can order and extended its delivery window to work through the backlog.
Tamy Chen of BMO Capital Markets warned both B.C. and Ontario’s recent troubles could weigh on the sector’s performance.
“We caution there may be short-term disruptions on Q3/22 sales from a cyber attack in Ontario and labour strike in B.C.,” she said in a Tuesday note to investors.
This report by The Canadian Press was first published Aug. 17, 2022.
Tara Deschamps, The Canadian Press