Cannabis Legalization

David Clement and Yael Ossowski: Pa. can and should legalize cannabis, but do it right

If the General Assembly takes up Gov. Tom Wolf’s call, Pennsylvania could become the 12th state to legalize recreational cannabis. They should absolutely follow through. But it won’t end there.Tom Wolf wearing a suit and tie© Provided by Pittsburgh Post-Gazette

Legalizing cannabis is a no-brainer. Any negatives from legalization pale in comparison with the costs of prohibition. The failed war on drugs has criminalized otherwise peaceful citizens, torn minority communities apart and locked up far too many of our friends, family and neighbors. We know the cost.

But legalization in itself isn’t virtuous. State legislators must ensure that legislation does not end up causing even more problems. We need only look at other states, as well as our friendly neighbor to the north, to understand why smart cannabis legalization is necessary.

To begin, it has been suggested that Pennsylvania use its model of state retail of alcohol — namely through the Pennsylvania Liquor Control Board — as a template for selling cannabis products. Though Harrisburg legislators are tempted, this would be an outright disaster.

The state should lean on the private sector and avoid treating cannabis like alcohol. It is well known that Pennsylvania’s alcohol retail market is one of the most archaic and anti-consumer markets in the country, one that artificially raises prices, causes massive inconvenience and pushes thousands of Pennsylvanians to buy alcohol out-of-state. We especially saw this during the pandemic. That’s hardly an example to emulate.

In states where it is legal, cannabis retail is offered by licensed private businesses rather than state monopolies. Ontario, Canada’s most populous province, now has only private retail storefronts and is proceeding to have a retail market where licenses are uncapped. That means there can be better competition, a more responsive market and better customer service than in a state store.

A licensed private retail market would be wise for Pennsylvanians, as it would allow the market to determine the number of stores available to consumers, rather than a bureaucracy in Harrisburg.

The legal market would be dynamic enough to respond to consumer demand, an important factor in prying consumers away from the illegal market. Stopping the black market would help raise the tax revenue Mr. Wolf intends to offer to minority communities and small businesses in need of assistance post-COVID-19.

Added to that, Pennsylvania should ensure that taxation and regulation of cannabis products are reasonable and fair.

Though Colorado and Washington have raised an impressive amount of revenue since legalization, California — with higher-than-average taxation, counties that don’t allow legal shops, and a myriad of red tape governing who can grow and sell — has one of the largest cannabis black markets in the country. Nearly 80% of cannabis consumed in the state remains in the illegal market, depriving the state treasury of much-needed revenue, but also locking out entrepreneurs who could otherwise operate successful dispensaries and contribute to their communities.

Another issue is which products will be legal to sell and use.

Canada, the largest industrialized country to legalize cannabis, mandated that only dried cannabis and oils be made legal on day one. That meant harm-reducing alternatives, such as beverages or edibles, were not available for sale until the next year. Giving the green light on product variety would benefit consumers and the retailers who are permitted to sell legal products, and would help the legal market compete against illegal alternatives.

If the General Assembly acts, there will be a lot of temptation to treat cannabis as nothing more than a cash crop for government coffers. But if legislators want to help benefit the minority communities who have been hurt by prohibition, future consumers and prospects for raising enough revenue to ease the pain caused by the pandemic, they would be wise to enact a smart cannabis policy.

David Clement and Yael Ossowski are North American affairs manager and deputy director, respectively, at the Consumer Choice Center, a global consumer advocacy group.


Originally published here.

David Clement and Yael Ossowski: Pa. can and should legalize cannabis, but do it right

State should ensure that taxation and regulation of products are reasonable and fair.

If the General Assembly takes up Gov. Tom Wolf’s call, Pennsylvania could become the 12th state to legalize recreational cannabis. They should absolutely follow through. But it won’t end there.

Legalizing cannabis is a no-brainer. Any negatives from legalization pale in comparison with the costs of prohibition. The failed war on drugs has criminalized otherwise peaceful citizens, torn minority communities apart and locked up far too many of our friends, family and neighbors. We know the cost.

But legalization in itself isn’t virtuous. State legislators must ensure that legislation does not end up causing even more problems. We need only look at other states, as well as our friendly neighbor to the north, to understand why smart cannabis legalization is necessary.

To begin, it has been suggested that Pennsylvania use its model of state retail of alcohol — namely through the Pennsylvania Liquor Control Board — as a template for selling cannabis products. Though Harrisburg legislators are tempted, this would be an outright disaster.

The state should lean on the private sector and avoid treating cannabis like alcohol. It is well known that Pennsylvania’s alcohol retail market is one of the most archaic and anti-consumer markets in the country, one that artificially raises prices, causes massive inconvenience and pushes thousands of Pennsylvanians to buy alcohol out-of-state. We especially saw this during the pandemic. That’s hardly an example to emulate.

In states where it is legal, cannabis retail is offered by licensed private businesses rather than state monopolies. Ontario, Canada’s most populous province, now has only private retail storefronts and is proceeding to have a retail market where licenses are uncapped. That means there can be better competition, a more responsive market and better customer service than in a state store.

A licensed private retail market would be wise for Pennsylvanians, as it would allow the market to determine the number of stores available to consumers, rather than a bureaucracy in Harrisburg.

The legal market would be dynamic enough to respond to consumer demand, an important factor in prying consumers away from the illegal market. Stopping the black market would help raise the tax revenue Mr. Wolf intends to offer to minority communities and small businesses in need of assistance post-COVID-19.

Added to that, Pennsylvania should ensure that taxation and regulation of cannabis products are reasonable and fair.

Though Colorado and Washington have raised an impressive amount of revenue since legalization, California — with higher-than-average taxation, counties that don’t allow legal shops, and a myriad of red tape governing who can grow and sell — has one of the largest cannabis black markets in the country. Nearly 80% of cannabis consumed in the state remains in the illegal market, depriving the state treasury of much-needed revenue, but also locking out entrepreneurs who could otherwise operate successful dispensaries and contribute to their communities.

Another issue is which products will be legal to sell and use.

Canada, the largest industrialized country to legalize cannabis, mandated that only dried cannabis and oils be made legal on day one. That meant harm-reducing alternatives, such as beverages or edibles, were not available for sale until the next year. Giving the green light on product variety would benefit consumers and the retailers who are permitted to sell legal products, and would help the legal market compete against illegal alternatives.

If the General Assembly acts, there will be a lot of temptation to treat cannabis as nothing more than a cash crop for government coffers. But if legislators want to help benefit the minority communities who have been hurt by prohibition, future consumers and prospects for raising enough revenue to ease the pain caused by the pandemic, they would be wise to enact a smart cannabis policy.

David Clement and Yael Ossowski are North American affairs manager and deputy director, respectively, at the Consumer Choice Center, a global consumer advocacy group.

Originally published here.

Let legal pot shops deliver, critics say, as Ontario Cannabis Store brings express service to London

Ontario’s marijuana wholesaler is expanding its expedited delivery service to London, the only city in Southwestern Ontario where the new service is available.

But critics of the Ontario government’s cannabis delivery monopoly are questioning why pot shops aren’t allowed to offer the same service.

Ontario Cannabis Store (OCS), the government-run pot wholesaler and delivery service, has rolled out its express delivery service to seven more cities across the province. Orders placed will be delivered within three days at no cost.

“OCS is pleased to continue increasing access to legal cannabis for Ontario adults and making it easy for consumers to choose legal,” spokesperson Joanna Hui said in an email.

OCS is the only legal option for cannabis delivery in the province, but it has drawn fire for being too slow and expensive.

Ontario briefly let cannabis retail stores offer delivery and curbside pickup — a move the industry had long demanded — in April amid the COVID-19 pandemic.

But the temporary emergency order was lifted in July, despite protests from many of the brick-and-mortar stores, which argued the services let them compete with the black market.

The Friendly Stranger at 1135 Richmond St. was the only London pot shop to offer both delivery and curbside pickup.

Company president James Jesty said the government wants to maintain a monopoly on pot delivery in Ontario.

“I fully think that we should be able to do delivery,” said Jesty, whose company struck a partnership deal to open the store near Western University’s gates. “We’re still in COVID, we’re still being asked to stay home.”

Money was spent hiring drivers and renting vehicles to set up the Friendly Stranger’s delivery service, which was free for orders over $50, he said. “When they took it away from us, it really didn’t make a lot of sense.”

David Clement, North American affairs manager for the Consumer Choice Centre, said only letting OCS deliver pot products hurts consumers by leaving them with no other options.

“COVID-19 has really rallied people to support local businesses,” said Clement, whose centre has lobbied provinces to let retailers offer same-day delivery. “That same concept would apply to cannabis retail.”

OCS offers same-day delivery in more than a dozen cities, mostly in the Greater Toronto Area.

Last month, the Alcohol and Gaming Commission of Ontario (AGCO), the province’s marijuana regulator, pledged to increase the pace of pot shop approvals from 20 to 40 a month, starting this fall.

In London, where seven marijuana retailers now operate, another 15 are in the final approval stage.

Originally published here.

PA Gov. Wolf has it right on legalizing cannabis

Washington, D.C. – Unveiling his legislative priorities on Tuesday, Pennsylvania Gov. Tom Wolf formally called on the State Legislature to legalize cannabis as a means of helping support small business funding across the state.

He proposed that proceeds from cannabis businesses go to restorative justice programs and small business financing as a measure of COVID-19 relief,

Yaël Ossowski, deputy director of the consumer advocacy group Consumer Choice Center, praised Wolf’s call.

“For too long, lives and resources have been wasted in the failed War on Drugs. By calling on state lawmakers to legalize recreational cannabis, Gov. Wolf is taking the next practical step to save lives and improve our communities,” said Ossowski.

“The benefits of legalization have already paid out massive dividends to the people in Colorado, California, Michigan, Oregon, and more, via tax revenues and also by reversing the harsh criminalization that has had a disproportionate impact on low-income and minority communities.

“As the fifth-most populous and one of the most diverse states in the country, Pennsylvania can show every state in our nation that legalizing cannabis is a positive step forward for justice and the economy,” said Ossowski.

“Officials should ensure that Pennsylvania embraces smart cannabis policy, one that encourages competition, entrepreneurship, avoids red tape and eradicates the black market to spur a new revolution in entrepreneurship and opportunity.

“The Consumer Choice Center applauds the governor’s efforts, and hopes legislators line up behind his proposal,” said Ossowski.

Read more about the Consumer Choice Center’s Smart Cannabis Policy Recommendations

CONTACT:

Yaël Ossowski

Deputy Director

Consumer Choice Center

yael@consumerchoicecenter.org

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva, Lima, Brasilia, and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

Province ends pot shop deliveries and curbside pickup

Ontario pot shops are angry that as of today the province is putting an end to delivery and curbside pickup. The stores were allowed to offer both services under a temporary emergency order during the pandemic. Nicole Martin reports, there are worries this decision will lead to more demand on the black market.

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Ontario’s cannabis curbside pick-up and delivery options to end with emergency measures

“It is completely unacceptable that the province is making the cannabis market less consumer friendly,” says David Clement, North American affairs manager for the Consumer Choice Center

Photo: 
ake1150sb/Getty Images

Ontario cannabis retailers have had to be flexible through a series of evolving regulations through the COVID-19 pandemic.

When emergency measures were implemented, some were delighted that cannabis was deemed an essential service and retailers could continue operating. In April, cannabis was briefly dropped from the list of essentials — only to be re-added, with more flexibility for physically distanced transactions, like curbside pickup and delivery. Services like Leafly and Dutchie partnered with retailers to help facilitate purchases and distribution, while others made a go of it on their own with custom-built solutions.

But now, curbside and delivery will no longer be an option for Ontario’s private retailers once emergency measures are no longer in place, reports BNN Bloomberg.

“It is completely unacceptable that the province is making the cannabis market less consumer friendly,” said David Clement, North American affairs manager for the Consumer Choice Center, in a statement. “Banning curbside pick-up and delivery options ultimately makes the legal market less attractive, which only serves to embolden the illegal market, who have long offered these services.”

While it hasn’t been proven that legal cannabis deliveries impede the illicit market, retailers who have invested in implementing new technologies and welcome any and all ways to move product, are similarly unhappy.

“To take away that opportunity for customers that want to use a delivery or a curbside (pickup) – which we’re still seeing as a pretty significant piece of our business – to take that away and force people to now have to interact and go into stores, when realistically there’s no reason for it … doesn’t make a lot of sense,” James Jesty, president of Friendly Stranger Holdings Corp., told MJBiz Daily.

To prevent the spread of COVID-19, masks are now mandatory indoors in public spaces in many, but not all, parts of the province. Delivery will continue to be available through the Ontario Cannabis Store, the province’s ecommerce site and wholesale supplier to private retailers.

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

The CCC Testifies In British Columbia

On Friday, June 12th the Consumer Choice Center’s David Clement was invited to present to the British Columbia’s Select Standing Committee on Finance and Services. In their annual review in the budgetary process, the province’s finance committee invites, and hears from experts, on various policies that impact the provincial budget.

As part of the consultation, David represented the CCC specifically on two key points:

  1. Urging the BC government to repeal it’s 20% vape tax
  2. Asking that the BC government remove the Provincial Sales Tax from medical cannabis.

Below is a copy of David’s remarks:

Hello members of the Select Standing Committee on Finance and Services. I’d like to first off thank you for the ability to present here today, and to represent the voice of consumers in British Columbia. I’m David Clement, and I act as the North American Affairs Manager for the Consumer Choice Center.

As a representative of a consumer advocacy group, I appear here today to ask that the Government of BC repeal its 20% vape tax, and remove PST from medical cannabis purchases.

For the vape tax, we urge the government to repeal the vape tax, for both cannabis products and nicotine, for the following reasons:

  1. Harm reduction: We know, from mountains of evidence, from credible public health agencies like Public Health England, that vape products are significantly less dangerous when compared to products that involve combustion. Because vape products are reduced risk products, we feel that the additional tax is counter-productive from a harm reduction perspective. Having additional taxation on cannabis and nicotine vape products, wrongly, signals to consumers that these products are more harmful than the alternatives, when the opposite is true. Taxation should be applied based on the continuum of risk, and this tax runs in the opposite direction.
  2. Black market alternatives: Specifically for cannabis, we know that the illegal market has long provided consumers with vaping products. Unfortunately, we also know that these black market products often contain dangerous thickening agents like Vitamin E Acetate. Vitamin e acetate is now known to be one of the main causes of vaping related illnesses in North America, which are not present in legal products, nor is it allowed to be in legal products. The 20% vape tax makes legal, regulated, and safe cannabis vapes considerably more expensive when compared to black market alternatives, which incentives consumers to purchase dangerous and unsafe products. It is important to remember that this 20% cannabis vape tax is added on top of the following taxes and fees that inflate the price of legal products:
    1. The federal excise tax
    2. The federal portion of the sales tax
    3. Application screening fees
    4. Security clearance fees
    5. Annual regulatory fee

The cannabis vape tax should be repealed because it simply piles on to the overtaxation of legal cannabis in this country, and only benefits illegal dealers, who’s products now become more attractive in terms of price. In order for the legal market to compete with the illegal market, it has to be able to offer products at comparable price points. The vape tax makes that nearly impossible.

Beyond the vape tax, we also strongly urge that the Province of BC remove the PST from medical cannabis products. The PST should be removed, firstly, because it would be the consistent thing to do. Other prescription medications in BC do not have the PST applied to them, thus removing PST would simply give parity to medical cannabis. Beyond that, it is incredibly unfair to have additional taxes for medical cannabis patients. In many instances patients are on fixed income, or even disability. It is disproportionate and punitive to add additional taxation to the medicine these patients have been prescribed by their doctors. It was a mistake for the federal government to apply a sales tax to medical cannabis, but luckily the province can somewhat right that wrong. 

Thank you for hearing my concerns, and I look forward to your questions. 


The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Johannesburg, Brasilia, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Liberar entrega de maconha no Canadá pós-pandemia ajudará a combater o comércio ilegal

Tornar a entrega de Cannabis permanente e não temporária seria um grande passo em frente para o mercado jurídico.

Uma das maiores críticas à legalização canadense da Cannabis é que suas regras complicadas e opções limitadas de varejo não podem competir com o mercado clandestino. O que ajudaria? Permitir que as entregas de Cannabis aos varejistas continuem após a pandemia.

Também melhoraria bastante o sistema de entrega monopolizado que existia antes do Covid-19 afrouxar alguns regulamentos de distribuição. Por exemplo, antes da pandemia, a Ontario Cannabis Store (OCS) era incapaz de fazer a entrega no mesmo dia via Canada Post . Quando o OCS tentou oferecer a entrega no mesmo dia contratando um serviço de terceiros, o varejista on-line provincial só poderia oferecê-lo para selecionar áreas e logo interrompeu a opção por causa da alta demanda.

A medida temporária que permite o recolhimento na calçada e a entrega em domicílio pelos varejistas não é perfeita e como em qualquer política do governo, o percalço está nos detalhes.

Por um lado, há uma disposição de que o entregador deve ser um funcionário do varejista. Essa é uma restrição desnecessária que limita significativamente a expansão. Os varejistas não estão equipados com capital nem conhecimento para operar uma frota de veículos. Isto se destaca quando a demanda aumenta. Eles devem ser capazes de contratar esse serviço como qualquer outra empresa.

Em segundo lugar, o governo Ford deve permitir que serviços de terceiros sejam usados por revendedores licenciados, sem a necessidade de uma licença para essa função. Tudo o que Ontário precisa fazer é seguir o exemplo de Manitoba, que permite isso. Fazer essa alteração oferecerá benefício ao consumidor, permitindo que empresas de serviços de tecnologia entrem no mercado, dando aos varejistas legais uma vantagem sobre o mercado ilegal.

Eliminar a necessidade de funcionários e permitir que empresas de tecnologia não licenciadas atendam às lojas expande as opções que os varejistas têm para levar produtos aos clientes. Eles poderiam terceirizar completamente sua entrega por meio de terceiros com uma licença de entrega de maconha ou trabalhar com outros aplicativos de entrega, como os restaurantes.

A província pode exigir que os motoristas não licenciados tenham seu certificado CannSell, que é semelhante ao Smart Serve para álcool. O CannSell custa US$ 64,99 e forneceria aos motoristas o conhecimento necessário para detectar deficiências e proteger o acesso a menores.

Para a implantação, a província poderá legalizar esse tipo de entrega amanhã e conceder aos motoristas um período de carência de 30 dias para concluir o CannSell. Quando a província anunciou que os restaurantes podiam entregar álcool com pedidos de comida, eles fizeram exatamente isso, dando aos motoristas de entrega de comida um mês para obter o Certificado de Serviço Inteligente.

Tornar a entrega de Cannabis permanente e não temporária seria um grande passo em frente para o mercado jurídico em Ontário. Isso beneficiaria significativamente os varejistas. Mais importante, porém, beneficiaria os consumidores ao expandir e aprimorar suas opções.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Allowing cannabis delivery is a good start. But too much weed is still being sold on the illicit market

Even with looser regulations, consumer demands still aren’t being met, writes David Clement, North American affairs manager at the Consumer Choice Center

The state, which legalized recreational cannabis in 2016, has imposed a stay-at-home order to prevent the virus’ spread, and many people fear going out because of the infection risk.

One of the biggest criticisms of Canada’s legalization of cannabis is that its cumbersome rules and limited retail options can’t compete with the black market. What would help? Allowing cannabis home deliveries from retailers to continue after the pandemic.

It would also vastly improve the monopolized delivery system that existed before COVID-19 loosened some distribution regulations. For example, prior to the pandemic, the Ontario Cannabis Store (OCS) was incapable of doing same-day delivery via Canada Post. When the OCS did attempt to offer same-day delivery by contracting out a third party service, the provincial online retailer could only offer it to select areas, and soon discontinuedthat option altogether due to high demand.

The temporary measure allowing curbside pick-up and home deliveries by retailers is a no-brainer, but as with any government policy, the devil is in the details. Ontario’s is still a far-from-perfect system.

For one, there’s a provision that the delivery person must be an employee of the retailer. This is an unnecessary restriction that significantly limits scaling up. Retailers aren’t equipped with the capital nor the expertise to operate a fleet of vehicles. This is especially true as demand rises. They should be able to contract this out just like any other business can.

Secondly, the Ford government should allow third-party services to be used by licensed retailers, without the need for a licence. All Ontario has to do is follow Manitoba’s lead, which allows this. Making this change has the consumer benefit of allowing tech service companies to enter the market, giving legal retailers a leg up on the black market.

Eliminating the employee provision and allowing non-licensed tech companies to serve storefronts expands the options retailers have for getting products to customers. They could completely outsource their delivery through a third party with a cannabis delivery license, or they could work with other delivery apps, like restaurants do.

The province could require those non-licensed drivers to have their CannSell certificate, which is similar to Smart Serve for alcohol. CannSell costs $64.99 and would provide drivers the expertise to spot impairment and protect access from minors.

For the roll-out, the province could make this type of delivery legal tomorrow, and give drivers a 30-day grace period to complete their CannSell. When the province announced that restaurants could deliver alcohol with food orders, they did exactly that, giving food delivery drivers a month to get their Smart Serve Certificate.

Making cannabis delivery permanent rather than temporary would be a huge step forward for the legal market in Ontario. It would significantly benefit retailers. But more importantly, it would benefit consumers by expanding and enhancing their options.

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

COVID-19: Retailers scrambling to respond to a surge in e-commerce orders during pandemic

Retailers have been left either struggling with a surge in demand for online ordering and delivery or ruing their lack of a web shop

Cannabis retailers in Ontario exhaled a collective sigh of relief earlier this week when the provincial government threw them a lifeline by finally — albeit temporarily — allowing them to offer online sales after shutting down their physical storefronts last weekend.

Previously, only the government-owned Ontario Cannabis Store was allowed to sell cannabis online, a “silly and misguided” policy, according to the Consumer Choice Centre, a consumer advocacy group. Now, for the time being, cannabis stores can offer delivery and curbside pickup.

Curbside pickup also seems to be the mechanism of choice for other retailers, including Canadian Tire, whose website urges customers to phone in orders after its brick-and-mortar presence, too, lost its “essential” business designation on April 5.

Taking orders by phone and getting customers to pick them up them up may seem a strange way to operate more than than two decades into the e-commerce revolution, but the coronavirus crisis has many retailers either struggling with a surge in demand for online ordering and delivery or ruing their lack of a web shop since most people are trying to stay home and practice social distancing measures as much as possible.

Almost three in 10 people are shopping for things online that they normally would have bought in-store, according to a survey of more than 30,000 Canadians by Chicago-based market research firm Numerator.

Even the biggest, most competent e-commerce players such as Amazon.com Inc. have been forced to make adjustments.

“They’re so backed up from an increase in demand, if you’re buying non-essential products, they’re not shipping that out to you for, like, a month,” said Ygal Arounian, an equity analyst at Wedbush Securities covering e-commerce companies.

Many smaller retailers, of course, still don’t have a web shop, often due to either the cost or logistics of setting one up, a shortcoming the coronavirus-related downturn has only emphasized.

An Amazon worker picks up a package while making deliveries during the coronavirus outbreak in California.

To that end, the City of Toronto and the Toronto Association of Business Improvement Areas is offering a program called Digital Main Street to help businesses develop their online footprint through one-on-one consultations.

One midtown Toronto business improvement association has created a $15,000 Digital Support Fund. The Yonge + St. Clair BIA will hand out $500 on a first-come, first-serve basis to up to 30 members to help them transition or grow an existing online presence.

But how the coronavirus-related downturn exactly affects various retailers will differ a lot, Arounian said, primarily based on what they’re selling.

For example, even though the conventional wisdom is that e-commerce activity is at an all-time high, Ottawa-based Shopify Inc. had to issue a message to investors that the global pandemic had thrown off its financial forecasts.

Arounian said Shopify’s business in the short term is likely suffering because the company serves a lot of independent merchants selling lifestyle products — makeup, clothing and watches — things that are not top priorities right now.

Investment house Piper Sandler’s biannual Taking Stock with Teens survey conducted in the United States in February and March found that spending on cosmetics had fallen 26 per cent from spring 2019, marking a 10-year survey low.

“In the near term, I think that the consumer focus has shifted completely to non-discretionary products,” Arounian said. “In the near term, we’re likely in a recession now. Ten million people in the U.S. filed for unemployment in the last two weeks, and that’s going to put some pressure on non-discretionary spend also.”

That hasn’t stopped people from shopping at Indigo Books & Music Inc., which has long had a substantial e-commerce presence, though most of its business still came from in-store purchases. Its online sales are up more than 300 per cent since its physical stores closed.

“We provide the things that will lower the stress level at home,” chief executive Heather Reisman. “I think after food, we (sell) the things that people would value at this moment. We do have educational and creative things for kids. We do have lots of things related to wellness and well-being. We are related to reading.”

She said the company has been able to easily absorb the increased online business since volumes during the Christmas period are 10 times what they are now.

“We always have a very significant surge, so we have capacity,” she said.

Reisman said the biggest constraint is taking steps to limit volume, because it’s necessary to keep workers healthy.

“We have to meter it, because we have implemented extreme social distancing in our fulfilment centres,” she said.

But not every company is handling the massive shift in consumer behaviour without hiccups.

For example, customers visiting Canadian Tire’s website on Monday were greeted with the famous red triangle and green leaf logo at the top of the page, and a plain text message that advised customers that should avoid using the site between 9 a.m. and 5 p.m., because those were the busiest times.

“Due to these unprecedented times, we are experiencing a higher than normal volume of traffic to our website. We want you to know we are here for you, and to assure you that we’re working hard to bring you the essentials you need.”

If there was a simple way to order merchandise on the site, it wasn’t immediately apparent. Instead, the company suggested customers place their orders by phone and offered a Google link to find the closest locations.

By Tuesday, the company still wasn’t accepting online orders, but the page was updated with a drop-down menu that allows customers to find store phone numbers without going to Google.

Canadian Tire did not respond to requests for comment from the Financial Post, but industry watchers have long held that the retailer is behind its peers in terms of e-commerce abilities (though Sport Chek and Mark’s, its sister banners under the Canadian Tire Corp. Ltd. umbrella, are more robust).

Curbside pickup at a Canadian Tire in Sudbury, Ont.
Curbside pickup at a Canadian Tire in Sudbury, Ont. John Lappa/Sudbury Star/Postmedia Network

In some cases, companies that are heavily focused on physical-world interactions need to change on the fly. Jessie Wilkin, founder and partner at Toronto-based Pilot Coffee, said before the pandemic, the coffee maker and chain’s business was almost entirely focused on wholesale coffee sales and its eight cafes in the city.

“March 16, we closed all our retail locations. We were unsure at that point how long they would be closed for, and we immediately started seeing an increase in sales from our online orders,” she said.

“From March 16, we’ve had almost a 300 per cent increase in online orders, and probably about a 350 per cent increase in online customers, and about 10 per cent increase in our online subscriptions.”

Wilkin said Pilot has been forced to change its workflow to respond to the flood of smaller consumer orders, holding roasted beans in inventory instead of doing roast-to-order wholesale batches.

The company is also looking at expanding its delivery capabilities, because they’re having problems dealing with Canada Post and FedEx with all the disruption.

Wilkin is looking forward to reopening Pilot’s cafes once it’s safe, but she said the pandemic will likely change the business significantly.

“We’re sort of seeing an expansion into an untapped market”

Jessie Wilkin

“I believe that our customers are going to come back to our cafes, and it’s just going to take some time,” she said. “But I think as well, consumers that hadn’t previously ordered our products online or ever made coffee at home are now feeling more empowered to do so. We’re sort of seeing an expansion into an untapped market.”

Running Room Canada Inc. founder and chief executive John Stanton is thinking in a similar way. Before the pandemic, his chain of stores heavily relied on in-person shoe sales and organized running groups.

Now, he is encouraging workers and customers alike to embrace innovation by, for example, hosting virtual running events where people use smartphone apps to record solo weekend runs. The company is also trying to offer “gait analysis” of customers through FaceTime to help pick the right shoes for their stride, something they normally do in-store.

Stanton said he doesn’t know what the post-pandemic running scene will be like — will people still want to gather in big groups for event races? — but he’s confident his business can endure, because people want what it has to offer.

“I get that mental release as well as a physical release, and I don’t have that interconnection with people at a time when it’s probably not a good idea to be around a big group.” Stanton said. “I think you’re probably going to see a return to that solitary run.”

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

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