Cannabis store owners say they are worried they will lose customers and run out of product if the shutdown of Ontario’s Cannabis Store supplies continues and consumers turn to the illegal market.
Stores say they are left with no choice but to make do with the stock they have after the provincial marijuana distributor informed them Monday that a cyberattack faced by one of its logistics partners has left it unable to process or delivers orders to marijuana stores and customers.
OCS said there was 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 center, Domain Logistics.
“Out of an abundance of caution to protect OCS and its customers, the decision has been made to close Domain Logistics operations until a full legal investigation is completed,” OCS said in a statement.
Sean Cuddy says his Toronto pot shop Cosmic Charlies has a good supply of product right now, but he’s heard of rivals “pulling their hair out” because their stock is running low.
Lisa Biggioni, who owns cannabis chain Stok’d, estimates she has enough marijuana to keep her stores stocked for a week, but worries the supply cut will continue beyond that.
Because it’s uncertain when deliveries will resume, High Tide Inc., which is behind the Canna Cabana chain, says it’s shifting inventory from lower-volume stores to higher-volume ones.
A worker inspects cannabis products at the Ontario Cannabis Shop’s distribution center. OCS said Monday evening that there was no indication that its systems were targeted or customer information was compromised during the Aug. 5 attack on the parent company of its third-party distribution center, Domain Logistics. (The Canadian Press)
OCS has not offered a timeline for how soon it could make deliveries to customers who shop for marijuana on its website or to the roughly 1,333 licensed cannabis stores that must buy the products they sell from the government-backed OCS.
Domain Logistics did not immediately respond to a request for comment, but OCS said it is working closely with the company and third-party cybersecurity experts to conduct an investigation that is ongoing and expected to conclude in the coming days.
A letter from OCS to retailers obtained by The Canadian Press said all new product launches planned for this week will now be “postponed until further notice.”
“As a goodwill gesture,” OCS will also waive all retailer shipping fees until September 30 and a $500 processing fee for one rush order per store between September 1 and March 31, 2023.
Suspension of delivery after data breach in May
The incident follows OCS’ May 11 announcement that the Ontario Provincial Police is investigating the “misappropriation” of confidential store sales data.
That breach “was not a breach of IT security or systems,” OCS said after quickly launching an investigation to identify the source, restricting access to internal data reports and notifying police.
Both violations come amid heightened competition in Ontario’s cannabis industry, which has seen the number of marijuana dispensaries explode in recent months.
Many are predicting store closures as the demand for cannabis has not increased at the same rate as store openings, the illegal market remains strong, and stores are constantly having to squeeze their margins as competitors continually drive down prices.
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