CanadaCOVID-19NewsCOVID-19 pandemic puts Canadian cannabis operations in limbo

While producers implement social distancing policies to maintain full operations, some pot companies have issued temporary layoffs and shutdowns
Jared Gnam Jared GnamMarch 17, 202013 min

As the Canadian cannabis industry aims to keep operating during the global COVID-19 pandemic, companies are monitoring the outbreak closely, while some have announced temporary shutdowns and layoffs.

Spokespeople from Aurora Cannabis (TSX: ACB), Tilray Inc. (NASDAQ: TLRY), and Organigram (TSX: OGI), told Mugglehead they are following guidelines issued by the World Health Organization and Canadian Public Health Authorities to protect workers and prevent the virus from spreading.

Those protections include putting a pause on all business travel, conferences and meetings, and providing employees with the option to work from home as per the social distancing procedures advised by WHO.

To maintain full operations at the cultivation facilities, the producers said they have implemented special hygiene protocols and are providing employees options to manage their tasks while reducing social contact with coworkers.

To date, each company said there hasn’t been any significant interruption to production operations, including existing supply chains, facility equipment or products.

However, the companies said they recognize the COVID-19 health crisis is evolving rapidly and they are reassessing their strategies and communicating with staff on a daily basis.

Organigram said it is currently reviewing its continuity business plan in case an emergency occurs and causes production shutdowns and disruptions to supply chains and sales channels.

Read more: Consumers and companies embrace cannabis retail rush before expected mass shutdown

Canadian cannabis companies try to weather COVID-19 storm
New Brunswick-based Organigram is among a number of Canadian producers who have said they are mandating social distancing policies at their production facilities to avoid the spread of COVID-19. Organigram press photo

‘Nothing is normal’ for cannabis industry amid COVID-19 crisis

According to Public Health Canada, all companies should be making plans to maintain key business functions if workers cannot be on the job. The federal agency recommends businesses adjust policies to reduce social contact and relax sick leave policies to support employees in self-isolating when ill.

However, there is no federal law that requires employers to provide paid sick leave. Only Quebec and Prince Edward Island offer paid sick leave.

The Canadian government is poised to announce a massive $25 billion aid package to help Canadians and business get through the COVID-19 crisis, according to CBC News.

Read more: Justin Trudeau’s business bailouts gives cannabis the cold shoulder

Micro cultivator North 40 Cannabis Ltd. announced over Twitter that staff could take time off and would be offered full pay in order to preserve everyone’s health.

Gord Nichol, owner of the family-run company, told Mugglehead so far there are no supply chain disruptions and that his team is maintaining full production at his 200 square metre facility in Nipawin, Saskatchewan.

But he did say work conditions are bleak and business operations face future upheaval.

“Nothing is normal. We’ve basically become a commune here,” Nichol said.

“We are a mostly family run business and our house is on the same land as our facility. We’ve got employees in RV’s and everybody has committed to keeping quarantined. It’s the best we can do to protect ourselves.”

He added that temporary trimmers won’t be brought in for next harvests and that he couldn’t guarantee the company’s three non-family employees full-time hours.

Other smaller or medium cannabis companies are also adjusting to the new reality caused by the COVID-19 crisis.

Toronto-based cannabis tech company Ample Organics told Mugglehead that its 80-member team has been working remotely since March 16 and will continue to do so until April 1. At that point, the firm will reassess “the best way for us to protect our staff and their extended families — and to cut down the spread of the virus.”

Canadian cannabis companies try to weather COVID-19 storm
Canopy Growth Corp. announced it will temporarily close its 26 Tweed and Tokyo Smoke cannabis retail stores across Canada as of March 17 due to the COVID-19 crisis. Canopy press photo

Some cannabis companies opt for temporary shutdowns, layoffs

However, not all cannabis tech companies have the luxury of sending employees home.

Lift & Co. (TSX-V: LIFT) announced Tuesday it has temporarily laid off an undisclosed number of its workforce and paused operations of “non-profitable business segments” due to the COVID-19 outbreak.

The company — which runs a digital platform for cannabis retailers and hosts a bi-annual cannabis industry expo — said it will shutter its cohesion unit, which provides cannabis marketers with consumer data insights.

Lift & Co. added that it intends to rehire those affected by the temporary layoffs if and once the pandemic is resolved.

Meanwhile, pot giant Canopy Growth (TSX: WEED) said it has temporarily closed all 23 of its Tokyo Smoke and Tweed retail locations across Canada, as of March 17, to combat the spread of the virus.

And award-winning pot retailer Suprette announced Tuesday it will be temporarily closing its Ottawa flagship store also as of March 17.

“As we monitor the development of the COVID-19 virus and its potential impact on our community, we at Superette understand this is the most critical time for the containment of COVID-19 and flattening the curve,” the company said.

Canopy said patients will still have access to purchasing medical cannabis online through its Spectrum Therapeutics website.

Also, Tilray said it is closely monitoring updates from Canada Post and will inform patients any pending interruptions to deliveries.

To date, Canada Post has implemented its own safety measures in which mail carriers will no longer ask for a signature for your packages. Canada Post’s safe-drop process means your carrier will leave these items in your mailbox or outside your door if it’s safe to do so.

New Brunswick-based Organigram said it has also prioritized maintaining its medical channel, and the company has seen “some significant growth recently on patient orders.”

Read more: COVID-19 could be a boon for cannabis retail

Top photo via Canopy Growth

 

jared@mugglehead.com

@JaredGnam

One comment

  • Avatar
    John Burton

    March 18, 2020 at 7:45 pm

    Organigram is NOT doing anything to help with social distancing and have not addressed COVID-19 at all to to their employees. HR is telling people they are worrying too much over nothing. Organigram NEEDS to shut down before all their employees are sick/dying!

    Reply

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