Changes coming to Canada’s largest Cannabis market
Ontario Cannabis Store Plans Major Reduction in Product Offerings to Streamline Supply Chain.
The Ontario Cannabis Store is planning to begin reducing the number of products it carries in its warehouse by several thousand in the coming year and a half as it moves to create a more efficient supply chain amid a glut of product.
The move, which will begin this September, comes as several other provincial distributors have made similar moves to handle a growing number of products, limited storage space at central distribution warehouses, and slowing market growth as demand seems to be reaching a saturation point.
While growth in the Canadian cannabis industry was exponential following legalization in late 2018, that growth has slowed considerably in recent years, matched by a slowing or even contraction in the retail and production space.
To address this, provincial distributors like the OCS, LDB, AGLC, and the MBLL, have been paring down their offerings and shortening the time they give products to grab consumer interest.
One way Ontario has been seeking to address the large array of products (currently 5,000 SKUs) and limited warehouse space is through its flow-through program, which creates an on-demand list of products that can be ordered through the OCS without being permanently stored in its distribution centre.
Introduced in 2021, the flow-through program has continued to expand and evolve over time. The newest announcement will introduce changes like a multi-tier delivery platform that will try to reduce the program’s end-to-end lead times, a common complaint from producers and retailers, as well as additional tools.
In addition to these changes, the OCS is also increasing from four product calls a year to five while reducing the time needed to launch a product into the market and creating a single, harmonized submission process.
In late August, the OCS will also introduce more detailed wholesale metrics through its Supplier Data Program, ideally giving producers a chance to improve product availability. The provincial agency will provide more information to the industry on these proposed changes in the coming weeks and months.
