A breach of data at the Ontario Cannabis Store (OCS) is worrying retailers as vital information related to their operations has been leaked to the public.
According to the Canadian Press: “The affected data includes the revenue, number of kilograms of cannabis sold, total units sold and sell-through rates for individual stores in Ontario, along with the store names, license numbers, and whether they are owned independently, by a corporation, or by a franchisee.”
Daffyd Roderick, Senior Director, Communications and Social Responsibility, at OCS says, “This data was misappropriated, it was not a failure of our IT systems or security.” The Ontario Provincial Police (OPP) are investigating the issue. Roderick notes, “As this is a criminal matter under investigation by the OPP, we cannot comment further.”
This event has retailers very concerned. Stephen Verbeek, President at Hello Cannabis, says, “I am unaware of any other industry that has had their entire data pool of sales, inventory, turnover, and present stock pile leaked to the public. It poses a great risk for calculated criminal activity along with numerous other potential malicious actions. The irony is that the OCS has a priority and is responsible to protect this information. They are also the only entity that has all of this data so we expected better security from them. They failed miserably at protecting private business and citizens from being exposed to significant harm.”
The OCS has restricted access to internal data reports and is awaiting the results of the police investigation.
Ontario retailers are already struggling to compete in some markets that are saturated with licensed cannabis stores, such as Toronto and Halifax. Cannabis Retailer did a deep dive into stores per capita in our May/June issue, and as of December 31, Toronto had 230 legal retail stores serving a population of 2.8 million people, which averages to one store servicing 12,174 people. Now with competitors being privy to confidential sales figures, the level of competition will heighten even more.
Currently, Ontario has minimal provincial restrictions on cannabis store density and municipalities are given no say in the matter, so the Ontario Liberal party is campaigning on a promise to implement a minimum distance of 150 metres between cannabis shops to prevent store clustering. It’s doubtful that such a small distance requirement will have any effect though, since Edmonton requires stores to be 200 metres apart from each other and that city is suffering from major saturation with one store serving only 6,476 residents.