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Strike at Distribution Centers Could Lead to Shortages at British Columbia Pot Shops

Workers at British Columbia’s only wholesaler and distributor of regulated cannabis products went on strike this week, leaving the province’s legal pot shops scrambling to ensure they have enough product to keep their doors open. Workers with the British Columbia General Employees’ Union (BCGEU), which represents about 33,000 service industry employees, set up picket lines at four distribution centers operated by the BC Liquor Distribution Branch (BCLDB) on Monday in an effort to gain higher wages from their employer.

On Wednesday, the BCLDB announced that because of the labor action, the cannabis distribution centers will be temporarily unable to accept or fill orders, process invoices or ship merchandise to the province’s licensed retailers.

“We sincerely apologize for this disruption and for the impact to your business,” the distributor wrote in a statement to stores published on its website.

The provincial officials are working hard to create a system that allows cannabis retailers to take direct deliveries from licenced producers. But until the plan goes into effect, the BCLBD is the only wholesaler and distributor for the province’s weed dispensaries.

“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,” the distributor in a statement quoted by the CBC, adding that the B.C. The Cannabis Store website cannot also fill orders or deliver them.

“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,” the distributor added.

A Strike could lead to store closures and shortages

British Columbia’s cannabis retailers are left wondering what the strike at the distribution centers will mean for their business. Omar Khan, the senior vice president of corporate and public affairs for High Tide, said that the company’s chain of Canna Cabana stores faces impending shortages if the strike does not end quickly, adding that it could have long-standing implications for the regulated cannabis industry.

“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 Khan. “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.”

Others retailers worry that they will have to shut down their shops until the dispute over labor is settled.

“If it lasts more than two weeks, then we are probably looking at closing down the store because there is nothing to sell,” said Jacob Michalow, the assistant general manager at Marigolds Cannabis in Vancouver.

Vikram Sachdeva stated that his Seed and Stone chain stores have an adequate supply of product, however, he said that this could change in case of prolonged strikes.

“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,” said Sachdeva, adding that he wished that retailers were given more notice of the labor action.

“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.

Sachdeva stated that he fears that he may have to refuse customers if there is not enough product. He also expressed concern that patients who are medical marijuana users will find it difficult to access their medication. Sachdeva expressed concern that those who feel disappointed about the lack of legal cannabis may turn to illegal markets.

Jaclyn Perhota, executive director of Association of Canadian Cannabis Retailers noted that restaurants and bars are better equipped to deal with the strike since they have the option to buy cannabis products at private wineries or craft breweries, if they cannot receive them from distribution centers.

“That is something that we’re calling on government to explore,” said Pehota. “We would like the same diversity of supply chain for cannabis retail.”

David Hurford is the secretary of B.C. Farmers Craft Co-op agreed with David Hurford, secretary of the B.C.

“We completely respect the union’s right to take this action, but it is up to the government to have a contingency plan in place,” Hurford said.