Looming Canada Post work stoppage has medical marijuana producers scrambling

Licensed medical marijuana producers have been warned to stop using mail delivery ahead of a potential Canada Poststrike or lockout in early July.

The postal service says it started telling producers on Fridaythatif a strike or lockout goes ahead on July 2, it won'tguarantee the delivery of patients' prescriptions.

• Canada Post warns biggest customers to prepare for service disruption

That warninghas producers throwing together contingency plans so the increasing number of medical marijuana patients continue to get their prescriptions on time.

Two years ago, Health Canada changed the rules on who can provide medical marijuana, allowing only licensed producers to offer marijuana productsto customers by mail exclusively.

As a result, most producers have been using Canada Post.

"We are a good and getting-better-every-day customer of Canada Post," said Bruce Linton, CEO and founder of Canopy Growth Corp.,which operates the Tweed marijuana production facility in Smiths Falls, Ont.

"And so it is kind of unfortunate and ridiculous that this [postal dispute]will have them not be able to service a market that's actually growing for them."

Canada Post and the Canadian Union of Postal Workers (CUPW)have been in contract negotiations sincelate 2015to reach a new agreement for about 50,000 workers.

Management will bein a position to lock out workers by July 2, and both sides have said there's been little progress atthe negotiating table.

CUPWspokeswomanSuzieMooresaid last week thatthekey issues in the dispute are wage parity between city and rural postal workers and the restoration of door-to-door mail delivery.

Medical marijuana mail order big business

The medical marijuana industry, Linton said, has come to rely heavily on the mail, sendingtens of thousands of packages through the postal system each month.

The number of customers also continues to growat a rate of 20 to 50 per cent each month, according to Linton, who said his company grew from $2 million in sales in 2015 to more than $12 million thisyear.

Thereare close to 75,000 medical marijuana users in Canada as of June 2016, he said.

Tweed claims to be the largest medical marijuana producer in Canada, but its rate ofgrowth is being replicatedat some 32 other licensed medical marijuana producers in the country, Lintonsaid all of which usemail order.

Canada Post is the preferred delivery mechanismbecause it can reach even the most remote communities, Linton said.

With the possiblepostal servicedisruption, however,the backup planinvolves using multiple couriers to providethe same service to customers,but some people could still face delays.

"There's a reason why it's plan B," Lintonsaid.

Will patients be without medication for a period of time? It's kind of scary.- Ming, a medical marijuana user

Many of the medical marijuana producers CBC contactedagreed there could be challenges if they have to rely on other delivery services.

"There are some patients that will be particularly affected," said Robyn Rabinovitch ofCannTrust, a federally licensed medical marijuana producer based in Vaughan, Ont.

CannTrust will begin using Purolator as of Monday, said Rabinovitch, but itdoes notdeliver to P.O. box customers.

While there could be increased shipping costs for producers, saidLinton,in the shortterm, neither Tweed nor CannTrust hasplans to pass those costs along to customers.

Linton said Tweed also plans to add more customer service staff to help clients.

'It's kind of scary'

One medical marijuana user contacted by CBC Newssaidshe'sconcerned about theprescription she has to renew this week.

"I guess we'll have to wait and see how the delivery system will be," said Ming, who didn't want to use her last name to protect her privacy.

"Will patients be without medication for a period of time? It's kind of scary."

Ming said some users are talking about visitingunlicensed dispensaries if they face delays.

Dependency on mail highlights flawed system

ChuckRifici,chairman of National Access Cannabis,which helps patients negotiate the Canadian medical marijuana landscape, said astrike or lockout would exposea serious flawin a system that depends so exclusively on the postal service.

"It really highlights how I don't think it really makes sense to have a mail order model," saidRifici, also CEO of Nesta Holdings, a private equity firm that specializes in investing in the cannabis industry.

National Access Cannabiswants tosee the federal government increase access through regulated store-front dispensaries, Rifici said.

"The patients and cannabis advocates have been clamouring for increased access," said Rifici, noting thatraids in Toronto on dispensaries and the decision in Vancouver to regulate dispensaries speakto thatneed.

Canada Post spokesmanJon Hamilton said the service has been warning customers since April that, if talks fail following negotiations with a federal conciliator,there could be a strike or lockout by July 2.

Hamilton said that if a deal isn't struck before then, orders made after Mondaywith Canada Post could get stuck in a warehouse.