Ontario Cannabis Store resumes some shipments after distribution shutdown

(This story has been updated with information about an OCS update to retailers.)

Ontario’s government-owned cannabis wholesaler has resumed some shipments to retailers after suspending deliveries earlier this week in the wake of a cyberattack on its distribution contractor.

The distribution center, operated by Domain Logistics on behalf of the Ontario Cannabis Store (OCS), “is in the process of returning to operational status,” the OCS said in a Wednesday update.

“A small number of deliveries from the distribution center will be made later today, beginning with the delivery of the orders that were impacted at the time of shut down.”

The cyberattack on the parent company of Domain Logistics occurred late Friday, according to the OCS.

Then, late Monday, the wholesaler told retailers that deliveries had been suspended.

In a Wednesday night update sent to licensed Ontario cannabis stores and obtained by MJBizDaily, OCS President and CEO David Lobo sought to assure those retailers “that we completely understand and share the urgency of Ontario’s cannabis retailers to receive orders.”

Some retailers would receive deliveries Wednesday night, Lobo said in the update.

“All other retailers will be updated tomorrow following our critical work tonight to restore our systems in a safe and secure manner.”

In a Thursday update to stores, OCS announced temporary changes to deliveries including a 30-case cap on order sizes for the next order cycle.

OCS told stores it would deliver for 16 hours a day, seven days a week, to clear out its backlog of orders, with the possibility of moving to 24-hour deliveries.

In a Wednesday television interview, Lobo said a third-party investigation into the cyberattack was almost complete and it appeared that customer information and OCS systems were unaffected.

Lobo acknowledged that some stores “are running a bit low” on cannabis products.

“I think we’ve made a lot of progress with our retailers and a lot of exciting products that have launched over the last couple of months,” Lobo told Toronto-based news channel CP24.

“But without question, I think there’s work that we will have to do to support our retail stores so we can rebound from this in the weeks and months ahead.”

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The OCS has a monopoly on cannabis distribution in Canada’s most valuable cannabis market.

The government-owned corporation was advised in a 2021 report from the Office of the Auditor General of Ontario to improve its oversight of Domain Logistics.