Market Overview

Ontario Cannabis Retailers Shift To Delivery Model After Coronavirus Shutdown

Share:
Ontario Cannabis Retailers Shift To Delivery Model After Coronavirus Shutdown

On the evening of April 7, an emergency order was approved by the Ontario provincial cabinet allowing for non-medical cannabis dispensaries to operate through online orders and payments, with distribution via curbside pickup and home delivery.

The measure is intended to last for as long as the COVID-19 emergency prevents normal commercial activities in the province.

The announcement comes just a few days after the province, home of almost 40% of the country’s population, declared all recreational stores as non-essential, commanding they should stay closed for at least two weeks.

Ontario Allows Click-And-Collect, Home Delivery

As a response to the emergency order, Canadian dispensary chain Fire & Flower (OTC: FFLWF) said Wednesday that it will reopen its two Ontario locations for curbside pickup and home delivery starting April 9. 

The measure also affects 50 other legal cannabis retailers located in the province.

The government-operated Ontario Cannabis Store, which was previously the only dispensary allowed to perform deliveries, said that it will waive delivery costs during the pandemic.

Ontario retailers will not be allowed to use third-party delivery services that exist in other provinces and must take care of logistics using their own workforce.

The measure was taken to avoid illicit actors from taking over the market as legal shops remain closed during social distancing periods, according to a statement by the Alcohol and Gaming Commission of Ontario.

Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.

What’s Happening In The Rest Of Canada?

Public Safety Canada included medical cannabis in the list of essential products and services that are allowed to operate during the COVID-19 pandemic.

Although the list is nonbinding, it serves as guidance for provinces and territories to decide on the activities they allow during the health crisis.

Since Public Safety Canada is a federal department and cannabis is federally regulated, the guidance has significant weight for provincial decision makers.

As a result, most provinces allowed cannabis dispensaries to remain open, including recreational ones.

According to a map compiled by Marijuana Business Daily, Quebec, British Columbia and Alberta cannabis retailers made the list of businesses allowed to remain operational. The three provinces comprise 47% of the country’s population.

Most other provinces and territories enjoy similar situations, including some that do not have privately owned dispensaries, but are allowing government-run dispensaries to continue to operate. 

Like Ontario, Newfoundland and Labrador and Prince Edward Island have temporarily closed cannabis businesses, but are allowing allow sales to continue through home delivery. 

Open For Business, But Delivery Denied

Canada has not enforced stay-at-home measures as other countries have, but the government has instructed citizens to reduce social contact to a minimum.

While retailers in many Canadian provinces are allowed to continue commercial operations, delivery is still not allowed for many privately owned dispensaries.

Since provinces regulate cannabis sales within their borders, most of them have developed government-owned online stores that monopolize home delivery sales.

This includes Ontario, Quebec, British Columbia and Alberta, which make up over 85% of the country’s population.

During the coronavirus pandemic, some provinces have issued measures to promote social distancing among cannabis users. British Columbia, for instance, has allowed click-and-collect and phone reservations of cannabis products, yet customers still need to pay and pick up the products at physical stores.

Manitoba and Saskatchewan were the only two provinces where cannabis e-commerce was allowed for private retailers before the recent temporary inclusion of Ontario.

In these provinces, third-party companies like Pineapple Express (OTC: PNPL) can act as couriers, picking up product at the dispensaries and delivering it to people’s homes in a similar way to how Eaze works in California.

COVID-19 means that regulations are adapting on a daily basis, so more states could follow in Ontario’s footprints in the near future. In the meantime, it still takes a walk to the dispensary for most Canadians to satisfy their recreational cannabis needs.

Photo by Jorge Vasconez on Unsplash.

 

Related Articles (PNPL + FFLWF)

View Comments and Join the Discussion!

Posted-In: Canada cannabis delivery CoronavirusCannabis Government Regulations Top Stories Markets Best of Benzinga

Cannabis Movers