Ontario’s private-sector cannabis stores have at least a 14-day window to continue serving customers through curbside pickups and home delivery.
That’s thanks to an emergency order issued late Tuesday by the provincial government permitting retailers to offer such services for two weeks.
Ontario had previously ordered private cannabis stores to close for two weeks as of April 4 because of the coronavirus.
To capitalize on the new order, store owners will want to move quickly. New rules and expectant customers leave little room for error.
Marijuana Business Daily asked for tips from several cannabis sector experts.
- Check in with landlords, insurers, and municipal governments
Experts recommend reviewing your lease and communicating with your landlord regarding any curbside-pickup plans.
“If you need (a pickup) area around the corner, how are you going to set up a camera and where is the landlord going to allow you to do that?” asked Matt Maurer, a cannabis lawyer at Toronto-based Torkin Manes.
“I suspect landlords will be somewhat accommodating in the circumstances,” he said. “And working with your tenant in order to make sure that their business is operational, and therefore they can pay you the rent, is all good stuff.”
Toronto-based cannabis lawyer Harrison Jordan suggested checking for any nuisance provisions in your lease, in case “things get really intense with the amount of traffic in the immediate vicinity that’s doing pickups.”
“I would say it’s a balancing act, and if you’re leasing the property, you have to get your landlord involved in things in advance,” Jordan said.
Trina Fraser, a partner at Ottawa-based Brazeau Seller Law, recommended store operators check to see whether the outdoor area planned for curbside pickup is considered part of the leased premises.
“Is it a common area that belongs to the landlord, and is used by other tenants, or is it public property?” she asked.
Fraser also noted that retailers should call their insurance broker to see whether their liability insurance covers curbside pickup and delivery, especially if it’s happening on public property.
“That might also be a concern of the municipality,” Fraser added. “You could be probably violating municipal bylaws by operating on a sidewalk without municipal approval.”
- Get your delivery drivers started on the right foot
Turning cannabis store employees into delivery drivers will take some planning, Fraser advised.
“I think you have to consider what the current terms of employment are, and how they’re changing,” she said.
That could include considerations around compensation structure, as well as other concerns such as workplace impairment.
“It probably wasn’t necessarily important when they hired this person at the outset to confirm that they have a valid driver’s license, or to confirm that they have a valid insurance policy on their car, things like that.”
Store operators who hire temporary employees to help with deliveries should also take care not to incur any unwanted employer obligations, Fraser said.
- Comply with public-health measures
Ontario’s emergency public-health orders during COVID-19 still apply, Jordan noted.
That includes a ban on social gatherings of more than five people.
“So, for example, if an individual (is) coming with seven of his friends to do curbside pickup, then the store should refuse service because that individual is not complying with the emergency order,” he said.
The Alcohol and Gaming Commission of Ontario is advising cannabis store licensees “to continue practicing social distancing and to make efforts to promote a safe distance between customers in curbside lineups.”
Jordan expects to see newly minted cannabis delivery drivers wearing masks and other personal protective equipment.
“It would be wise for stores to have standard operating procedures in place that take into account both security and sanitation.”
- Seek to ensure staff security
Retailers should take several steps to keep employees safe during pickups and deliveries, advised cannabis security consultant David Hyde, CEO of Hyde Advisory & Investments in Toronto.
“This really now takes people away from transacting in an enclosed, controlled environment in a store where the security is very tight and can be monitored and controlled.”
Curbside pickups and deliveries might require special security considerations, Hyde suggested, especially during evening hours.
“A criminal could potentially get to know when a vehicle is leaving a store with 15 deliveries on it. That would be an attractive target for criminals,” he said.
“So a little bit of thinking needs to go into staff being aware of their surroundings. When they leave the store with all of those shipments to go to their car, there should be maybe an escort (from) another member of staff.”
Varying delivery departure times and routes could also help ensure security.
Failing to keep employees safe could open up retailers to new liability issues.
“There’s a duty of care, an obligation on the part of the employer, to really do all reasonable steps to ensure the safety of its employees,” Hyde said.
“And in Ontario, there’s very strict health and safety guidelines, including workplace violence, that actually have got big fines attached to (them), penalties for employers, and lawsuits can flow if they haven’t provided the employees with the appropriate guidance and instruction.”
Hyde advised retailers to document their new security procedures and training in writing and have employees sign off.
- Be smart about promotions
Cannabis retailers might try to boost their delivery and pickup sales with sales and other promotions, but lawyer Harrison Jordan noted that regular promotional restrictions apply.
“It’s just like inside the retail stores – you can’t offer inducements for the purchase of cannabis, and you can’t give cannabis or cannabis accessories out for free, or in the contemplation of the purchase of something else,” he said.
That means no ‘buy one, get one’ deals, “but you could have a deal that is, ‘Buy two of these items for a certain amount of dollars per each item.'”
That means no buy-one, get-one promotions, “but you could have a deal that is, ‘Buy two of these items for a certain amount of dollars per each item.'”
Straight discounts are also acceptable, Jordan said.
“Let’s say a retailer looks into their analytics and sees that sales are not as strong on a certain day. They can say, ‘Save a percentage on this day.'”
- Don’t forget customer service
Despite the challenges of rapidly setting up delivery and curbside-pickup infrastructure, Maurer recommended retailers remember that customers always come first.
“These stores have a somewhat limited window to make a very good or very poor first impression when it comes to delivery and curbside pickup,” he said.
“Some of them are going to do it with flying colors, and others are going to struggle.”
Maurer noted some retailers in other sectors affected by COVID-19, such as grocers, are struggling to keep customers happy when orders get canceled or arrive late.
“There’s really an opportunity to differentiate yourself, from a service perspective, from other stores, and really give a pleasant experience for delivery and pickup and win over customers that could be with you for the long term.”
Solomon Israel is a reporter for Marijuana Business Daily, based in Winnipeg. He can be reached at [email protected]
For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.