Hackers disabled the Ontario Cannabis Store system late last week, leaving the province’s cannabis consumers in the lurch.
Ontario is Canada’s most profitable cannabis market, according to the .
OCS says there is “no indication” that the breach exposed customer information, but “out of an abundance of caution,” has shut down the distribution center’s operations until a full investigation of the cyber attack could take place over the next few days.
“OCS is currently unable to process and deliver orders Ontario’s authorized retail stores or customers of OCS.ca due to a cyber incident late on Friday August 5, targeting the parent company of OCS’s third-party operated distribution centre, Domain Logistics,” the governmental agency said in a statement released on Monday.
The agency supplies cannabis to some 1,333 licensed stores in the province and also sells to customers online through its own website.
OCS has announced that “as a goodwill gesture,” it will not collect retailer delivery fees through the end of September and will provide vendors with one free emergency processing fee. A previously scheduled launch of products will also be delayed by the security breach.
“We don’t know how long this is going to last,” Lisa Bigioni of Stok’d Cannabis told MJBizDaily. Shops usually only order a week’s supply of product at a time — which means the current service outage could be big trouble, given that all Ontario stores are required to source their wares through the OCS system.
On Thursday, OCS sent a letter to cannabis retailers stating the system would begin rolling out orders once again. However, due to delays caused by the hack, shops can only order 30 packs of product at a time, for now, the Canadian Press reported.
This is far from the first time a state cannabis agency has faced security threats in Canada. On Christmas Day of last year, the Saskatchewan Liquor and Gaming Authority (which oversees the province’s cannabis economy) suffered a cyber attack which disabled some of its computer systems and applications. That breach took place weeks after the Quebec government was threatened with an attack which triggered curtailment of nearly 4,000 of its websites.
Earlier this year, the OCS reported the improper use of some of the agency’s information to the police but specified the breach was not due to a cyber attack. A memo to vendors said that private store sales data had been misappropriated and shared with others in the cannabis industry.
Cyber attacks are only one of the Canadian cannabis industry’s woes at the moment. A recent analysis found that cannabis businesses were destroying more and more marijuana overstock each year — in 2021, the obliterated weed was double than what had been destroyed in 2020. Last year’s fall crops entailed a record-breaking amount of cannabis, and there simply weren’t enough customers to buy.
Such industry-wide ill winds have caused many Ontario companies to offer steep discounts in the attempt to attract cannabis customers to their shops.
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