OCS to Open Second Cannabis Distribution Warehouse
Ontario Agency Needs to Expand as Retail Stores Do – LPC
The Ontario Cannabis Store (OCS) has indirectly said it will open a second cannabis distribution warehouse. Marijuana Business Daily reports the provincial agency needs to expand its “network” to meet growing demand. This is presumably due to fast growth in Ontario’s retail cannabis market, which recently opened up.
Daffyd Roderick, OCS director of communications, provided an email statement to the media outlet. “After the consultations last winter where the producers opted out of delivery, we received confirmation from the government to continue to expand our privately operated distribution network when necessary.”
This meshes with Bank of Montreal analyst Tamy Chen’s information. “Ontario is expected to open a second distribution warehouse by September, which we believe should drive an increase in sell-in,” she wrote.
The second cannabis distribution warehouse should help the province overcome supply chain challenges. “For much of 2019, the Ontario Cannabis Store’s sole warehouse has been described as one of the contributors to supply chain challenges,” Chen wrote.
Ontario surpassed 100 retail cannabis store licences in June. The new wave of Ontario cannabis stores threatened to slow down in March during the COVID pandemic. The province helped store openings during the COVID by conducting virtual inspections.
The new OCS cannabis distribution warehouse will go a long way to increase capacity.
“We believe a second warehouse should drive an increase in sell-in during Q4/20 and better support inventory needs from a growing store network,” Chen said.
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