Article by Jeff Lagerquist,
“Cannabis stores and cannabis producers” are on Ontario’s list of workplaces permitted to open under the province’s order to close non-essential businesses. It’s a win for a sector facing tough times long before COVID-19 threatened the global economy.
Ontario’s list of “essential workplaces” released on Monday evening ranges from hospitals and grocery stores to mine sites and moving companies. Premier Doug Ford said the province’s closure order will be effective Tuesday at 11:59 p.m., and will be in place for at least 14 days.
“This is great news for the [cannabis] industry and consumers alike. A great number of licence holders are based in Ontario,” Deepak Anand, industry commentator and CEO of the Toronto cannabis firm Materia Ventures, told Yahoo Finance Canada.
“Had the Ontario government decided to not classify them as essential workplaces, it would have had far-reaching negative consequences for the entire industry.”
Ontario currently has about 50 physical stores, and is home to a number of major licenced producers. The province joins others such as Quebec and British Columbia opting to allow pot shops to remain open. Prince Edward Island has shut down its liquor and cannabis stores in response to the virus.
The provincially-run Ontario Cannabis Store is among several pot retailers and distributors that have reported an uptick in sales as consumers stock up in response to COVID-19. OCS said it received almost 3,000 orders on a recent Saturday, 80 per cent more than average.
Meanwhile, the economic toll of COVID-19 is rippling through Canada’s cannabis industry. New Brunswick-based Organigram (OGI.TO)(OGI) announced Monday that its workforce will be materially reduced as a result of voluntary and company-imposed temporary lay-offs to facilitate social distancing while the COVID-19 situation lasts. Toronto-based medical cannabis company FSD Pharma (HUGE.CN)(HUGE) also announced Monday plans to scale back cultivation, and has implemented a furlough policy for workers.
Ontario’s greenlight for budtenders to continue serving customers in person comes as the industry asks for a share of Ottawa’s $82-billion economic aid package for businesses impacted by the COVID-19 pandemic.
In a letter to Industry Minister Navdeep Bains and Finance Minister Bill Morneau, more than 70 cannabis industry professionals asked for access to subsidies being made available to small businesses. The group, which includes representatives from Fire & Flower (FAF.TO), Organigram and WeedMD (WMD.V), said Export Development Canada and the Business Development Bank of Canada (BDC) have indicated they will not extend access to the recently announced $10 billion in stimulus funds.
Last week, BDC spokesperson Jean Philippe Nadeau told Yahoo Finance Canada that BDC is developing details on how the program will work, and will share an update in the coming days. He declined to specify which sectors will be allowed to participate.