Private pot shops see sales decline after delivery cancelled by province

Private cannabis retailersin Ottawa are fighting to have home delivery reinstated after seeinga declinein salesand worryingpeople might be turning to the black market.

When COVID-19 hit this spring,the government closed all cannabis shops, but later allowed private retailers to operate delivery and curb-side pickup. That ability was rescindedin July as the province moved into Stage 3 reopening.

The Ministry of the Attorney General explained that the shops were allowed to reopen with pandemic measures in place, including booking appointments or using a "click and collect" service which allows customers to schedule a pick up time.

Yet, private retailers point out the government-run Ontario Cannabis Store (OCS) is still doing deliveries, the same asit hadbeen since legalization. OCS also acts as thewholesale cannabis provider for private retailers.

"Most other industries have been afforded an extension on these sort of temporary measures during the pandemic because, of course, the pandemic still exists," said Harrison Stoker, vice-president of Donnelly Group, which owns Hobo Cannabis in Ottawa.

"It's 2020. These kinds of features should certainly be available to the average Canadian."

Stoker said deliveries made up about 24 per cent of his sales at the height of the pandemic, and hovered around 18 per cent even as retailers began to reopen their doors.

He noticed an immediate drop in sales once delivery was cancelled.

Treated differently

Sales have also declined atSuperettein Wellington West.

The company had to lay off six employees who were hired specifically for deliveries, said Mimi Lam, Superette's CEO.

She said sheput a lot of work into delivery plans,including purchasing new software and staff training.

"To not be able to use that going forward it seemsa bit of a waste, and also kind of counterintuitive in terms of what this legal industry is trying to achieve," she said

"If this was going to be an open, private market industry, set us up for success. Give us the tools to allow us to run the businessesand reach our customers the way that any other private businesses are able to do it seems that oftentimes cannabis just seems to be treated differently."

The province is considering how to best support the cannabis market as it grows, Ontario's Ministry of the Attorney General wrote in a statement to CBC Ottawa.

Black Market increase

Both Lam and Stoker worry the cancellationof delivery is handing over customers to theblack market on a "silver platter"because of the convenience delivery and pickup provides.

They think one way to curb people's shift to the blackmarket is to increase the number of Retail Store Authorizations (RSA) being approved by theAlcohol and Gaming Commission of Ontario.Currently the commissionis only issuing 20 RSAs a month.

Since the Ontario government allowed private retailers to apply for RSAs in April, the Alcohol and Gaming Commission of Ontario has received 915 submissions, but has only processed 80.

"Increasing the private retail network in Ontario, and therefore increasing wholesale sales of cannabis out of OCS, is more of a surefire way to make money and create access for customers," saidStoker.

He plans to continueto lobby for the return of delivery by privateretailers.

For its part, the Alcohol and Gaming Commission saidit's working to increase the number of RSA approvalsand make the application and approval process more efficient.