BC cannabis retailers and producers frustrated by LDB shutdown

Cannabis retailers and producers in BC say they are already starting to feel the pinch from a strike that shut down the province’s cannabis distribution on Monday, August 15.

A week into the job action, retailers say some popular products are already disappearing from shelves, and some retailers are beginning to consider limiting hours and/or shifting products from lower-volume stores to higher-volume locations.

Nick Naresh, the Community Director of THC Canada, a cannabis retailer in downtown Vancouver, says their store generally keeps a large volume of products on hand to meet consumer demand and is already beginning to see signs of some products beginning to disappear. 

A lot of people use this medicinally for their ailments, and that’s concerning. If I had known, I would have loaded up.

Bob Benvenuti, Invermere Cannabis Store

THC Canada normally receives one weekly shipment, which never arrived last week. 

“We are fortunate enough to be stocked up on inventory, but it’s moving very fast,” explains Naresh. “This week we never received an order, and we’re starting to see our shelves deplete a little bit. People are used to seeing fully stocked shelves all the time, a plethora of different products on our shelves, but because of the strike we’re seeing a little bit more space on the shelf here and there.”

Naresh says they are already almost out of concentrates, one of their number one sellers, along with “high-end flower” SKUs. The store has a large supply of other top-sellers like pre-rolls and vape carts, but he notes they could start to see shortages soon if deliveries don’t begin again in the next few weeks. 

While speaking with several retailers for this article, the most common products mentioned that are already disappearing from shelves are pre-rolls, ounces, vape carts, and CBD products. 

Bob Benvenuti, the manager at Invermere Cannabis Store in Invermere, BC, says that although they normally carry a good range of products, and they did receive a partial shipment on Wednesday, August 17 (ordered prior to the job action), he is already seeing a run on CBD and CBN products, selling his last CBN product last week. 

“A lot of people use this medicinally for their ailments, and that’s concerning,” says Benvenuti. “If I had known, I would have loaded up.”

“We’ve got a great inventory and a great selection, and I can see where the holes are already, so hopefully this gets rectified fast.”

I’m a tiny brand, of course it really impacts my cash flow, but it’s also momentum. I need to pivot and ensure this isn’t something that severely impacts me.

Audrey Wong, Zyre Brands

The strike isn’t just affecting retailers. 

Audrey Wong, Founder & Chief Executive Officer of Zyre Brands, a small owner/operator in Vancouver selling cured resin vape carts, says her first product shipment was sent off a few days before the strike was announced, and is now unavailable to most retailers. 

This has forced her to pause her marketing efforts, which she worries could be difficult to recover from considering this was her first product launch in all of Canada.

“I’m a tiny brand, of course it really impacts my cash flow, but it’s also momentum,” explains Wong. “I had a road map and a critical path for how I was going to reach out to retailers, what I was going to do with my special media plans, so now that it’s never made it to retailer stores… I need to pivot and make sure I update my plans and ensure this isn’t something that severely impacts me.”

“The momentum now is ground to a halt, and a small company like myself depends on getting that product into people’s hands, spreading the message by word of mouth and social media before the next big thing comes along and takes people’s attention. So that momentum is very risky for me, I need that to sustain, to grow sales.”

Kirk Dressler, the Director of Legal and Corporate Services with the Williams Lake First Nation (WLFN) and the CEO of the Nation’s two cannabis businesses, the retail chain Unity Cannabis and the cultivation facility Sugar Cane Cannabis, says he thinks most stores probably have about a two week window before they really start to see major product shortages. 

“I think like most retailers, we have a bit of a buffer in terms of what we’re carrying, but like most retailers, we’re trying to be reasonable in what we’re keeping on our shelves so there is a two-week window we have where things can be relatively comfortable before it starts to be a real crisis.” 

Unity Cannabis has four locations. Dressler says one of their stores did get a delivery on Monday, August 15, while two others didn’t. 

“As a result we’re starting to see some pressure, primarily in our Penticton and Merritt stores and we have to start to consider how we can allocate our inventory to maximize the period of time we can operate without being provided with more supply.”

Dressler also points out that the Unity stores are in a fairly unique position in BC by having a connection to their Sugar Cane production facility, and hope to begin augmenting products through the province’s direct delivery program in the coming weeks. The program will allow Sugar Cane to ship their own products grown at their facility to the Unity Cannabis stores, bypassing the LDB warehouse in Richmond entirely. 

“It won’t give us a complete range of a product mix, but it may allow us to at least have the fundamental products that form the backbone of our sales so we can at least limp along if this strike is protracted, which I would anticipate that it is going to be.”

He says he’s also called on the BC government to allocate products from their own province-run BC Cannabis Stores (32 locations currently) to First Nations retailers like Unity Cannabis who have entered into Section 119 agreements with the province. The agreements allow the province to engage in government-to-government relationships with First Nations to encourage their participation in the province’s retail cannabis licensing regime. 

“The government’s union is causing this problem, so if there are any of these outlets that should be in a position to close earlier because of a lack of inventory, it should be the government stores,” says Dressler. “So we’ve invited the province, the management of the LDB, to reallocate their product to 119 communities and at this time we haven’t received a response to that invitation.”

Nick Naresh, at THC Canada, shares a similar perspective on how the fight between the province and its largest public sector union is hurting private retailers struggling to stay afloat in what is still a very new and in-flux market.  

“It’s interesting that this is an issue between the union and the government, but this seems to be really affecting the storefronts. It’s like two parents fighting and the child being the one that suffers. It doesn’t really have much to do with us, but it really impacts us.”

The sky is not falling. Yet.

Not all retailers say the strike is hurting them, though. 

Carol Gwilt, the co-owner of Weeds, with two store locations in BC, says she’s starting to see customers buying more product with an expectation that supplies may soon disappear. While some products might be getting low, she sees it as a way to help inform her customers about other products. 

“Obviously people are stocking up and spending a little more while they have the chance, says Gwilt. “I look at this as serving us the opportunity for our counter staff to hook people up with their next favourite strains. Hopefully, for the sake of everyone, we can have this strike resolved quickly and get on with business.”

Mike Babins, the co-owner of Evergreen Cannabis, the first licensed non-medical cannabis retailer in Vancouver, says he’s doing fine and the strike isn’t hurting him much at all. 

“The sky is not falling,” says Babins. “When we’re seeing stores that are closing this quickly it’s because they have multiple stores and very little cash flow so they’re diverting everything to one store to survive, that’s not the case with Evergreen. We’re established and we’re always looking to tomorrow so we’re always stocked up, we have nothing to worry about. We’re not running out of weed.”


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