Business
Cyberattack Leaves Ontario Cannabis Store Unable to Fill Orders
Ontario’s only cannabis wholesaler and online retailer announced on Monday it is unable to process or deliver orders to cannabis retailers and consumers because of a cyberattack on one of its technology partners.
Ontario’s only wholesaler and online retailer of legal cannabis is unable to process orders or make deliveries to weed shops and consumers after one of its technology partners was hit by a cyberattack. The Ontario Cannabis Store announced the shutdown on Monday following the August 5 cyberattack on the parent company of its third-party distribution center, Domain Logistics.
Domain Logistics did not immediately respond to requests from reporters for more information on the cyberattack. The Ontario Cannabis Store (OCS) said it is working with Domain Logistics and independent cyber-security experts to determine the extent of the breach, adding that there is no evidence that its computer systems were targeted or that customer data has been compromised.
“However, out of an abundance of caution to protect OCS and its customers, the decision was made to shut down Domain Logistics’ operations until a full forensic investigation could be completed,” the OCS said in a statement.
Cyberattack Shuts Down Ontario’s Only Cannabis Wholesaler
The OCS is Ontario’s only online retailer of regulated cannabis and the sole wholesaler for the province’s more than 1,300 licensed cannabis shops. The outage of the OCS online sales platform is a critical challenge for the retailers, who rely on the wholesaler to keep their shops stocked with licensed cannabis products. Elisa Keay of K’s Pot Shop in Toronto noted that retailers have no other supplier to turn to for merchandise for their store shelves.
“When you’re my only wholesaler and you’ve got a firm grasp on who can get delivery and when we can get delivery, it leaves us zero options,” Keay said. “We’re totally at their mercy.”
A letter to cannabis retailers from the OCS obtained by The Canadian Press said “as a goodwill gesture,” the OCS will waive retailer delivery fees until Sept. 30 and a $500 processing fee for one emergency order per store between Sept. 1 and March 31, 2023.” But many cannabis shop owners believe the fee waivers are not adequate compensation for the losses they are experiencing during the outage.
Keay said that if stores do not have the products consumers are looking for, they are likely to shop elsewhere. In Ontario’s crowded cannabis market, losing customers to rival licensed retailers or the illicit market is not sustainable.
“There’s no sort of compensation that can fix damaging someone’s business,” said Keay, adding that the outage is causing serious disruption to the business’s supply chain logistics. “I don’t like to order massive quantities of any one thing because I rotate a lot of things through, so when I get disrupted, it means that the shelves are going to be bare,” said Keay.
Cameron Brown, vice president of The Retail Cannabis Council of Ontario, said that the pause in deliveries caused by the Domain Logistics cyberattack could lead to a “significant shortage of cannabis in Ontario” if it continues through the week.
“The next worry for a lot of retailers is when their next inventory shipment is going to come … to get through not only this week but another big weekend in August—one of the busiest times so far in cannabis,” said Brown.
Without fresh product deliveries, Keay is afraid that low inventory levels will soon impact the shop’s ability to satisfy its patrons.
“It means that some customers are going to come in, shake their head, upset they’re not getting what they want and they’re going to go somewhere else because they don’t want to hear that it’s not my fault … and there was a cyberattack,” Keay said.
High Tide Inc., a Canadian cannabis corporation with an international reach, is reallocating inventory in some of its lower-volume Canna Cabana retail shops to busier stores because of the uncertainty surrounding cannabis product deliveries, according to an email to reporters from Omar Khan, the company’s vice-president of corporate and public affairs.
But Sean Kady, co-owner of Toronto cannabis retailer Cosmic Charlies, said that moving product from store to store is not an option for retailers with only one location. Additionally, independent shops frequently do not keep large quantities of product on hand, preferring instead to place smaller orders for their merchandise.
“They’re on a more tight, fixed budget, so from week to week, we can only spend so much and if you’re not getting that product that you need, what are you supposed to do and how are you supposed to pay the rent?” he said.
Kady said that his store was nearly “overstocked” on Tuesday, but added that he has heard of business owners who are “freaking out and pulling their hair out” because of their already shrinking supply of cannabis products.
Source: https://hightimes.com/news/cyberattack-leaves-ontario-cannabis-store-unable-to-fill-orders/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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