Is Ontario’s once-secret pot warehouse just too small?

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Ford government may face lawsuit over cannabis labour contract with OPSEU
WATCH: Ontario's Ford government may face a lawsuit over cannabis labour contract with OPSEU – Oct 11, 2018

Ontario’s cannabis warehouse is almost exactly the same size as B.C.’s, despite having to serve three times the population, Global News has learned.

All recreational cannabis legally sold in the province must move in and out of the facility, which is located in an industrial park in Oakville.

The government-owned Ontario Cannabis Retail Corporation has tried to keep the facility’s location secret.

However, the Ontario Public Service Employees Union published its address in press releases in late December and also this week.

OPSEU says it identified the facility through surveillance conducted by private investigators the union had hired, as well as through visits made by union organizers. Global News has confirmed the facility’s location independently through our own visits to the site.

(OPSEU takes the position that people working at the distribution centre ought to be union members under a deal between the Liquor Control Board of Ontario and its union in 2017.)

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The OCRC, which operates the customer-facing Ontario Cannabis Store, has said nothing at all about the Oakville distribution facility other than to acknowledge that it exists.

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Security Breach at Ontario Cannabis Store

BC Cannabis Stores, by contrast, has been open about the location of its distribution centre, which is on No. 6 Road in Richmond. The company has revealed the number of people who work there (130) and recruits for employees openly.

It has also been open about the facility’s size: 70,000 square feet — almost exactly the same size as Ontario’s warehouse.

B.C. and Ontario have quite similar systems for selling recreational marijuana, except that Ontario has no physical stores and B.C. has a handful.

Ontario will open just 25 cannabis stores — selected by lottery — in April 2019.

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A few weeks before legalization, a pedestrian walks past B.C.’s cannabis warehouse in Richmond. (AP). THE ASSOCIATED PRESS

Alberta Gaming, Liquor and Cannabis would not tell us the size of its equivalent facility.

Ontario had perhaps the roughest launch of any province in the period immediately after legalization. Over 1,000 customers complained to the province’s ombudsman about delays and poor communication, and in a national poll in late November, Ontario cannabis buyers said they were much more dissatisfied with delivery times than buyers in any other province.

I would say Ontario sh*t the bed the worst,” Aurora CEO Terry Booth told a cannabis conference in Nevada in November, the Financial Post reported.

READ MORE: Ontario marijuana buyers are Canada’s grumpiest: Ipsos poll

The OCS has been truly amazed by the volume of sales,” wrote president Patrick Ford a few days after legalization. “It’s way beyond what we anticipated.”

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(In B.C., 90 per cent of cannabis buyers told pollsters they were happy with delivery times, as opposed to 60 per cent in Ontario.)

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Ontario government releases the rules surrounding the cannabis retail lottery system

Later in the year, Ontario delivery times shortened and product selection improved. The unofficial OCS Reddit board, which was at first devoted to the monopoly‘s various failings, has now turned mostly to crowdsourcing product reviews.

A look at Ontario’s cannabis distribution centre suggests another explanation for the backlogs: the warehouse, through which all legal pot sold in Ontario must move, may simply have been too small.

Was the rough rollout connected in part to the size of the warehouse? And can the facility cope with shipping to online stores and being a wholesale warehouse next April?

The warehouse’s size turns out to be one of many aspects of legalization in Ontario that the provincial government refuses to discuss.

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Ontario’s finance ministry referred the question to the OCRC, and spokesperson Daffyd Roderick emailed a generic response, saying: “Location and details of the OCS distribution centre are undisclosed for security reasons and will not be publicly announced or confirmed.”

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A later access-to-information request showed that the OCRC’s refusal to discuss whether the warehouse was big enough is connected to the fact that the agency has tried to keep its address secret (though not very successfully).

“We are not confirming the location of the distribution facility so we did not delve into (this reporter’s) assumptions regarding the facility’s capacity,” Roderick wrote in an internal email.

Ontario’s finance ministry would not answer questions about whether it planned to open more warehouses, whether it planned to move to a bigger one or whether the existing one would be able to meet demand in April.

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“When we look at the size of our province and the demand, we should be looking at perhaps expanding warehouse operations, opening more stores, not fewer, as this government is planning to do,” said deputy opposition leader Sara Singh.

“It makes sense as to why we’re seeing such a botched rollout, frankly. How is this one facility supposed to not only be a wholesaler but also distribute this cannabis across the province? It’s unfathomable that it would be sufficient.”

The president of Domain Logistics, the third-party logistics company that OPSEU has identified as running the warehouse, did not respond to multiple interview requests.

In October, Domain Logistics published two ads at Hamilton’s Mohawk College seeking people to do warehouse-related work at the facility. A municipal development newsletter published by the Town of Oakville last summer said Domain Logistics had leased the warehouse in the second quarter of 2018, which would have been in the last months of Ontario’s Liberal government. Disability law compliance forms on the company’s site also connect it to the warehouse’s address.

The government has refused to say who is running the warehouse or explain how they got the contract.

READ MORE: Contracting out Ontario’s pot warehouse should be secret, LCBO argued

Ontario’s 25 stores set to open in April work out to one retail store for every 567,000 people.

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By contrast, Nova Scotia started legalization with one store per 74,000 people, New Brunswick with one store per 37,000 people, and Newfoundland and Labrador’s 24 stores each serve just 22,000 people.

Bricks-and-mortar stores in many provinces have had to close because of supply shortages.

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“We are very concerned about the supply issue so in order to make sure that we don’t have issues in Ontario, we are going to open our retail stores in phases,” provincial Finance Minister Vic Fedeli told Global News at the time. 

Charles Sousa, finance minister at the time the warehouse contract was awarded, declined an interview request, as did acting Ontario Liberal leader John Fraser.

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