Retailers Concerned Over Lack of Inventory Due to Cyber Attack

Domain Logistics, the third-party distribution center for the OCS was subject to a “cyber attack” on Friday, but the OCS says there is no indication that its systems were targeted or its customers information was compromised but delays in delivery to cannabis retailers are still expected, per CBC.

The Breakdown

• Unusual activity was detected on the Domain Logistics Network, leading them to shutdown their network entirely and implementing protection protocols.
• Information appears to be limited to customer names and shipping addresses, but the OCS is taking a cautious approach and launching a full forensic investigation.
• Weekly deliveries to retailers will be delayed, with no confirmation on when shipments will return back to normal, although it was recently announced that a limited number of deliveries will be made starting on Wednesday.
• New products scheduled to launch this week will also be postponed.

Our Perspective

This is not good news for the OCS, whose reputation continues to take a hit after the investigation in the misappropriate of sales data leak that happened in May. It is very unfortunate that many cannabis retailers, particularly smaller, independent operators will struggle with low inventory levels and not be able to meet customer demand if the issue persists. This has led many in the industry to question why there is no contingency plan when these issues arise and point to the limitations of having a single distributor for Canada’s biggest recreational cannabis market. Regardless, people are angry, and this may be the catalyst to the changes people have been asking for and the dismantling of the monopoly that the OCS has on the supply chain.

SQDC Expands Product Portfolio

Three new edible cannabis products will be hitting the market which includes oven baked beets, dehydrated cauliflower, and dried figs, reports StratCann.

The Breakdown

• This is only the second time cannabis edibles have been made available in Quebec, the first being the “cannabis bites” that were introduced in Spring 2022 by Ontario producer Aphria.
• Quebec has strict rules around products that can be deemed as appealing to those under the age of 21 which includes candies, desserts, chocolates, and other confectionaries.
• The products are made available from Ontario-based producer CannMart, in partnership with BC processor Rilaxe Canna.

Our Perspective

This announcement by the SQDC created quite the uproar, with many lambasting Quebec for launching cannabis edibles that aren’t appealing to anyone, let alone children. However, others highlighted the fact that a healthy option for cannabis-infused edibles is a rarity in the current market, and this is something that a subset of consumers have been asking for. Furthermore, it’s good to see at least some companies innovate and try to tackle the challenge of launching products in a heavily restricted market.

Alberta Does Away with Window Coverings in Cannabis Retail Stores

Alberta Gaming, Liquor and Cannabis (AGLC) notified retailers that they will no longer be required to use window coverings to block the view into their stores from the street, reports StratCann.

The Breakdown

• The AGLC has removed section 3.2.6 of the Retail Cannabis Store Handbook that prohibits cannabis products, accessories, or any other cannabis-related item or material from being visible form the exterior of the premises.
• The rule change comes amid several cannabis store robberies that have occurred, particularly in the Calgary area.
• The provincial regulator was quick to point out that the changes do not mean retailers are now allowed to display outward-facing promotions and advertising materials, so window displays are still prohibited.

Our Perspective

Alberta seems to be listening and this will certainly be a welcome change for retailers. Despite window coverings being adopted to purportedly help protect youth from enticements to use cannabis, they also create a serious security issue and make cannabis retail stores a prime target for criminal activity. It’s important to have a balanced approach and we just hope to see this change trickle down to other provinces like Ontario that continues to enforce strict window coverings in all cannabis retail stores.