Public sector strike shutters B.C. pot shops, potentially boosting black market

Click to play video: 'BCGEU strike threatens cannabis businesses'
BCGEU strike threatens cannabis businesses
Jaclynn Pehota of the Retail Cannabis Council of BC speaks with Global News Morning about the supply shortage of cannabis products as a result of the BCGEU's job action. – Aug 27, 2022

Some of B.C.’s private licensed cannabis shops have been forced to close their doors as a public sector strike affecting distribution centres drags on.

Industry insiders say the ongoing strike could do lasting damage to the nascent sector, and embolden a black market that was never fully stamped out in a province long-known for its “B.C. bud.”

Story continues below advertisement

Members of the BC General Employees Union (BCGEU) have been picketing government liquor and cannabis distribution warehouses for 12 days, seeking a wage hike that reflects surging inflation.

Jaclynn Pehota, executive director of the Retail Cannabis Council of B.C., said the strike is having a devastating effect on her members, who — until Friday — were not legally able to secure product from any other source.

She said she’s aware of at least 50 stores in B.C. that have either closed their doors or severely cut their hours as shelves run dry.

“That means we’re laying off staff,” she said. “Those 50 shops, on average 10 employees each, you can do the math.”

Beyond the immediate impact, Pehota said the layoffs will likely mean problems down the road if staff take on new jobs and the retailers need to hire from scratch in B.C.’s tight job market.

Click to play video: 'B.C. cannabis stores bracing for empty shelves'
B.C. cannabis stores bracing for empty shelves

That has been the situation at Mood Cannabis Co. in Nanaimo, which has been forced to lay off 17 workers from its two locations.

Story continues below advertisement

“There was lots of tears. We’ve had a lot of our staff with us since the day we opened back in 2020, so it’s really sad,” CEO Cory Waldron said.

“Some of those people will not be able to come back because they cannot wait for employment insurance … so they have to find other jobs.”

Bargaining between the BCGEU and the provincial employer resumed earlier this week.

Asked for comment on the knock-on effects on the cannabis industry, union spokesperson Jasleen Aora said they were currently under a media blackout.

Pehota said on top of the economic concerns, the strike risks driving consumers to the black market.

“The illicit market is obviously primed for this, they are absolutely ready to go. They are very excited about the opportunity to fill the gap,” she said.

Click to play video: 'Cannabis industry fears shortages amid BCGEU job action'
Cannabis industry fears shortages amid BCGEU job action

That certainly appeared to be the case at an unlicensed pot kiosk operating at Main Street and Terminal Avenue in Vancouver on Friday.

Story continues below advertisement

Under a pop-up awning labelled “Familia,” two men who declined to give their names were doing brisk business, and reloading clear plastic tubs of cannabis from large ziplock bags.

Business had only improved since the strike began, one said.

“When the store closes, people need somewhere to buy their weed from. Nothing changes,” one of the sellers said.

“With the black market, there’s never a strike. It’s a business, man, people need to make money.”

Late Friday, Pehota said the Liquor and Cannabis Distribution Branch had reinstated “very limited” access to direct supply, accounting for about 50 products.

In the long run, she said the government needs to allow for a more diversified wholesale market for licensees, so they can’t be caught up in a similar bottleneck.

“This really demonstrates the flaw in the complete monopoly,” she said.

Global News has requested comment from the Ministry of Finance and the Ministry of Public Safety on the issue.

— With files from the Canadian Press


Sponsored content