The fresh threat of a Canada Post strike has marijuana distributors scrambling to find alternative ways to ship dried flower, oils and other permitted products on the first day of full cannabis legalization in Canada.
Some distributors say they’ll turn to Purolator, which is largely owned by Canada Post, and where shipping often costs more, but warned delivery times may be unpredictable.
The Canadian Union of Postal Workers (CUPW) said Tuesday it has given notice to Canada Post that its members could walk off the job with rotating strikes as early as Monday.
CUPW national president Mike Palecek said in an interview on Wednesday morning that the time of the strike notice, the day before legalization, was "coincidental."
"We put out the notice based on the way things have developed at the bargaining table," Mr. Palecek said.
He said the union has chosen to do rotating strikes — and not a complete shutdown of the postal service — "to put some pressure on Canada Post." In 2011, the last time CUPW held rotating strikes, they lasted for a day each in different locations. The union says its major issues in talks with management are health and safety, gender equality and preserving full-time jobs.
While the union hasn't decided the location and length of rotating strikes, he played down the impact on the postal service and cannabis deliveries. "Someone who might be purchasing cannabis online today might see their package delayed for a day," he said.
Canada Post workers are dealing with larger volumes of packages due to the rapid rise in online shopping and the legalization of cannabis is expected to add to their workload, including requirements for them to request proof of age from cannabis recipients. Proof of age is standard for regulated products and means the delivery person must record the name and signature of the person receiving the package. The postal worker can also ask for government-issued identification if the receiver appears to be under age 25.
Canada Post said it has agreements to deliver recreational cannabis in Nova Scotia, New Brunswick, Quebec, Ontario, Alberta, British Columbia and Yukon — and that it has the capacity to handle the spike in mail volumes expected.
The strike threat comes at a bad time for the cannabis industry, at the end of a long road to legalization that was originally supposed to happen in July, but Ottawa then delayed until Oct. 17. Some cannabis company plans were also set back when the new Progressive Conservative government in Ontario announced weeks before legalization that sales would only happen through online sales, with the opening of bricks and mortar locations delayed to the spring of 2019.
That new timeline is expected to put more pressure on Canada Post and other cannabis delivery services, alongside increased demands in provinces like B.C., where there is only one physical store opening today in Kamloops. More stores are expected to open in B.C. in the coming months, the provincial government says. Until then, most sales are likely to take place through the online B.C. Liquor Distribution Branch.
A spokesperson for the B.C. Liquor Distribution Branch said it is looking at alternative third-party services to deliver non-medical cannabis purchased online that will include age verification at the door. The spokesperson said a potential rotating strike “may impact delivery cost and times to online customers.”
The Ontario Cannabis Store spokesperson Daffyd Roderick said that the OCS “recognizes the potential for a Canada Post work stoppage and is evaluating options to put in place an alternate process for deliveries should they be required.”
Alberta Gaming and Liquor Commission spokesperson Heather Holman said the government’s cannabis wholesaler, “will continue to monitor the negotiations” between Canada Post and its union “to ensure we are prepared in the event of a strike.” She said Purolator will be called upon to support them if there’s a strike, “but cannabis delivery times will be impacted.” She also said age verification requirements will happen regardless, “during the initial online sale and at the time of delivery.”
The Nova Scotia Liquor Corp., which is selling recreational cannabis sales in that province, plans to also use Purolator if there is a strike, says spokesperson Beverley Ware. “We are proceeding now as we had planned,” she said, adding that they expect about 40 per cent of deliveries to be online.
Mathieu Gaudreault, a spokesperson for Quebec’s Societe des alcools du Quebec, says his organization is working on a “Plan B” if there’s a Canada Post strike, but wouldn’t provide details.
In 2016, delivery volumes surged at Purolator due to the threat of a work stoppage at Canada Post, and businesses complained of delays. Dave Bauer, a spokesperson for Purolator, which is 91-per cent owned by Canada Post, wouldn’t comment on a potential Canada Post work stoppage. However, he said Purolator has been planning “extensively” for cannabis distribution upon legalization, including fluctuating volumes. “We’re prepared and we’re in close contact with our current customers to make sure their shipments get to their consumers safely and on time,” he said, adding the service has experience delivering medical marijuana since it was introduced in Canada.
According to a Canadian Press (CP) report, major U.S. delivery companies won’t necessarily be available to help step in. United Parcel Service told CP that, while it delivers medical cannabis within Canada, it has no plans at this time to extend its service beyond that. FedEx’s service guide bans shipments of cannabis by default and a spokesman declined to tell CP if the company makes exceptions.
Canada Post spokesman Jon Hamilton said in a statement to the Globe that the Crown corporation “has made significant offers to CUPW which include increased wages, job security, and improved benefits and has not asked for any concessions in return.”
He said Canada Post will “remain open for business, continuing to operate if the union decides to conduct rotating strikes across the country next week,” and would notify customers of any disruptions planned by the union as soon as we are aware, however, customers may experience some minor delays.”
Nick Dean, CEO of cannabis producer Emblem Corp., called the timing of the strike notice "unfortunate," but was relieved to hear there may be minimal disruption.
He said the company has already delivered its recreational product to distributors such as the Ontario Cannabis Store and Alberta Gaming and Liquor Commission. "This further reinforces why we are looking forward to April 1 here in Ontario, when there are retail stores and consumers' only option isn't to order online," Mr. Dean said.