OCS capping pot shop orders, changing delivery window after cyberattack causes backlog

Ontario's cannabis wholesaler is temporarily capping the number of products retailers can order and expanding its delivery window as it works through a backlog caused by a cyberattack on its logistics partner.

The Ontario Cannabis Store said in a letter Thursday to retailers obtained by The Canadian Press that shops will be limited to ordering no more than 30 packs of product.

"This will create even access to products for all stores and will avoid creating a larger backlog of orders that could delay us from getting product to stores as quickly as possible," said the letter signed by OCS CEO David Lobo.

The backlog was caused by an Aug. 5 attack on the parent company of the OCS's third-party distribution centre, Domain Logistics, which has not responded to a request for comment.

Since the OCS disclosed the attack on Monday, Ontario cannabis stores have been worried the delays will cause them to lose sales and customers because their supplies are dwindling and shops have no choice but to purchase the product they sell from the OCS.

The OCS pushed out a small number of orders last night, but to clear the backlog, Lobo said it will make deliveries seven days a week between 6 a.m. and 10 p.m.

The OCS confirmed the cap and new delivery window on Thursday afternoon.

It noted in the letter it might have to move to a 24-hour delivery window until it has fully returned to standard operations.

Owners have no idea when delivery will come

The situation has created a headache for pot shop owners trying to make do with limited supply they still have from last week.

Anthony Horvath, the owner and CEO of Tonik Cannabis in Brantford, Ont., has already run out of some products and can't afford to keep a stockpile for unexpected situations like this one.

"We're a small, independent, family-owned business and we only have the one location, so I can't have half a million dollars of inventory sitting here and six weeks worth of back stock for a situation like that," he said.

Toronto pot shop owner Sean Kady agrees, telling the Canadian Press that independent shops are "on a more tight, fixed budget, so from week to week, we can only spend so much and if you're not getting that product that you need, what are you supposed to do and how are you supposed to pay the rent?"

As for Horvath, he's received no indication when his next delivery could arrive, making staffing challenging.

"I may be told at 3 a.m. in the morning expect your delivery guy to come by and we still have to arrange to have someone open up," he said.

The product that gets dropped off will be significantly less than Tonik Cannabis is used to receiving.

Horvath typically orders between 250 and 300 cases of products, much less than the 30 he is being limited to.

He said, "My concern is that even though I placed an order for 30, I may only get 25 because some products simply won't be available, so it's probably going to be even less."