When Canada opened the legalization floodgates in 2018, a mosaic of regulations was quickly enacted from coast to coast, with rules surrounding everything from cultivation to consumption.

One province in particular, Quebec, stood out as the nation’s most cautious and restrictive framework. This included a legal age of consumption of 21 years, prohibiting cannabis use in most public places, a ban on home cultivation, advertising and packaging rules that exceeded federal requirements, and other regulations. 

Despite all of this, Quebec is one of the largest markets for cannabis sales in Canada. As we approach the sixth anniversary of legalization, what does the landscape look like for French Canada moving forward?

“Our biggest challenges were the fact that we were so different from the rest of the provinces,” said Suzanne Bergeron, President and CEO of the SQDC. “Now, six years in, I see that more as an opportunity.”

Bergeron explained that Quebec has been able to capture the same market share as the rest of the country, even with their continued restrictions. “We have a cap on our THC, and we don’t have candies and chocolate, but with that being said, we still capture 62 percent of the market.” She added that they have been able to harmonize a commercial strategy with their number one priority, the responsibility toward the health of their consumers.

Stick to your vision

The health and safety approach is one that Quebec has consistently said is its primary mandate, and it’s hard for anyone to argue otherwise. Other provinces have gone through significant changes in licensing, advertising, and government involvement in retail. In contrast, Quebec stayed with its original course of strict government control and a focus on public health as opposed to profit margins. When asked about balancing public consumption and profitability, Bergeron was quick to point out that profitability is something they are not making a priority.

“Although we have a commercial output for what we do as the cannabis retailer in Quebec, we definitely don’t have any kind of pressure around profitability,” she said. Bergeron added that their job is to run the organization efficiently and intelligently, and their profitability is linked to them doing the job right.

“We are transitioning the illicit market to the SQDC and that’s how we get that profitability. Our main and only focus is our mission of [capturing] that market and making sure our consumers are being counselled correctly.”

Information is power

Six years into legalization, Bergeron feels that the SQDC has a significant amount of information on the preferences of their consumers and what criteria may be useful in getting someone to transfer from the unlicensed cannabis market to their retailers. They use this intel to continually adapt to the ongoing expansion of the cannabis industry.

“We’re starting to get a good amount of data on consumer preferences, what they like and dislike, [as well as] what keeps them in the illicit market vs coming into the SQDC,” she said. “Knowing that, we’re able to refine the strategy on how we’re going to adapt our stores so when they come in they feel welcome.”

Regarding the number of retailers the province considers suitable, they just passed the 100 store mark and it sounds like they are coming to the end of their physical expansion. “We’re probably closer to the end of completing our market coverage,” said Bergeron. “We’re still opening a few in the next 18-24 months.”

She added that when they opened the stores at the beginning of legalization, it was a one-size-fits-all model. Since then, the SQDC has decided to customize its product offerings by region to better serve the particular preferences of its customers. This goes for the stores as well.

In more rural areas, Bergeron suggested that perhaps the stores could be smaller but still serve the specific needs of that portion of the population. As for the SQDC’s internet presence, they are taking the same approach to product availability and accessibility. “[Clients] responded very well to our 90-minute delivery offer, so we will continue to see if we can expand that, as it’s in some regions but not all.”

Where will we be in 5 years?

Bergeron reiterated that the SQDC does not have any further plans for expansion after the upcoming retailers are created, so they mainly intend to continue adapting to the needs of their customers for an ongoing better experience.

“I don’t expect us to be much bigger in terms of stores, we’re not going to be a 200 or 300 store organization,” she said. “All we want to continue building is a place where our clients and consumer base can come and purchase their cannabis, or even come and just ask questions. [A place] where they feel welcome and respected.”

Related Articles

A tale of two markets: The future of retail cannabis in Ontario and Quebec

August 27, 2024

Quebec cannabis report shows 70% of purchases now at least partially from legal market

October 27, 2021

Quebec brought in $23.3 million profit in retail cannabis sales in most recent quarterly report

March 1, 2021