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Tuesday, Aug 16, 2022
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Industry update

OCS transitions to Guelph distribution centre

Wholesale orders placed from Dec. 7 onwards will be fulfilled from the new DC

OCS transitions to Guelph distribution centre

The Ontario Cannabis store is completing the transition of its supply-chain logistics to a new distribution centre.

As of Dec. 7 orders will be fulfilled from its new warehouse in Guelph, the provincial retailer informed private stores in a note Tuesday.

Revealed late September, the move from its existing facility in Oakville is one of a number of changes to scale-up Ontario’s cannabis sector, following the promise of an open market from Premier Doug Ford.

After announcing it would expand the rate of new store approvals late September, retailers told Mugglehead that the OCS is still getting its footwork in place to serve existing stores. At the same time, the crown corporation said it was hiring Giant Tiger president Thomas Haig as its interim president and CEO.

Read more: ‘It’s still too slow’: Ontario doubles monthly weed retail approvals to 40

In its Tuesday note, the OCS thanked private stores for their patience in accepting multiple deliveries per order as well as additional paperwork through the transition period. The provincial distributor will revert back to single-order deliveries and documentation, including advanced shipping notices, invoices, packing slips and bills of lading.

Additionally, the changes include updates to wholesale payments. Going forward, private stores will only be charged for items shipped from the distribution centre to a store.

“We have listened to your feedback regarding taking payment for orders before they are shipped,” the statement reads. “As of orders placed beginning Monday, Dec. 14, OCS will be moving to a pay-at-ship model for all wholesale purchases.”

Pre-authorized debits will no longer be pulled from accounts on the day an order is placed.  If the delivery falls on a weekend or public holiday, payment will be processed the next business day.

Read more: The Ontario Cannabis Store should reveal its wholesale pricing, lawyer says

There’s no anticipated change in cost for retailers, the OCS says. Stores will continue to be charged the same unit cost on all items, excluding the “rolling paper and cones and filters” sub-category.

And the $200 minimum shipping threshold will remain in effect for the foreseeable future to reduce higher transportation costs and other logistical complexities related to the pandemic.

“As we expand and grow our distribution network, it is possible that the fill rate on your order may be impacted. Our goal is to mitigate any shipping discrepancies as we serve our retail store network. We are continuously reviewing our processes to ensure these issues are mitigated to the extent possible,” the OCS says.

“We are excited to move forward with this transition, as the new DC will support the substantial growth of the Ontario retail store network and the expansion in product catalogue and innovations.”


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