Ontario Cannabis Store Marijuana Data Breach Overview:
- Who: The Ontario Cannabis Store reported that some of its sales data was breached, prompting a police investigation.
- Why: The breach included the sales and revenue data of several individual stores in Ontario, which could impact competition within the industry.
- Where: The data breach occurred in Canada.
A recent data breach that saw the sales and revenue information of multiple Ontario cannabis stores published could impact the stores negatively, industry experts say.
The Ontario Cannabis Store (OCS), a Crown agency that distributes marijuana crafted by licensed producers to retailers, announced the data leak May 10, The Canadian Press reports. It says in a letter to retailers that the Ontario Provincial Police are investigating after some of its sales data was “misappropriated, disclosed and distributed unlawfully.”
The data, which includes revenue, number of kilograms of cannabis sold, total units sold and sell-through rates for individual stores in Ontario, is now reportedly circulating within the industry.
The OCS says information such as store names, license numbers and whether the stores are owned independently, by a corporation or by a franchisee is also reportedly circulating.
Ontario Cannabis Store Could Lose Trust From Retailers, Industry Members Say
The OCS said in the letter that the incident was “no failure of IT security or systems.”
Members of the industry told the Canadian Press the data’s release is concerning because sales numbers are typically confidential and, when revealed to rivals, could endanger their business.
The data provides competitive insight and could give a leg up to certain companies, Deepak Anand, founder of cannabis company Materia, told the Canadian Press. He said the most damaging aspect of the breach is sales volumes being publicized. He said other licensed cannabis producers could use that information to target shops that are selling the most, shutting others out.
“Any kind of minor advantage in the market is really, really critical,” Jaclynn Pehota, executive director of the Association of Canadian Cannabis Retailers, told the Canadian Press. “If people can tell from the data which stores are performing best, they can try to copy that business’ model.
“If you’re in a position where everyone else around you is struggling and you’re on the path to profitability, that’s very critical and your intellectual property has now been to some extent exposed,” she said.
Pehota also worried the incident would impact the trust retailers have in the OCS.
“It’s inevitable that this kind of thing will damage the confidence of people who are trusting the government with their business data,” she said.
The OCS said it has quickly launched an investigation to identify the source, restricted access to internal data reports and notified the police.
Since the legalization of recreational cannabis in Canada in 2018, there have been several cannabis class action lawsuits over tainted cannabis, mislabeled cannabis products and cannabis product recalls.
In 2021, Canadian cannabis company CannTrust Holdings Inc. offered to pay $39.6 million into a trust to settle claims brought by investors who lost money following an illicit growing scandal and sanctions that resulted in numerous class action lawsuits.
What do you think of this data breach? Let us know in the comments!
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