Cannabis NL looking to add several new stores

Newfoundland and Labrador is looking to expand their retail network with several new cannabis store locations in the province. 

Cannabis NL says they recently issued a request for proposals for the following communities: Clarenville, St. Anthony, Pasadena, Rocky Harbour, Springdale and Twillingate. Cannabis NL will also be reviewing other opportunities throughout the province in Q4 of this fiscal year. 

The province currently regulates and distributes to 40 licensed cannabis retailers across the area through the Newfoundland Labrador Liquor Corporation (NLC), which oversees Cannabis NL.

The province also began allowing the sale of cannabis vape pens in September, a move the government says will help its legal stores better capture market share from illegal cannabis operators, noting that such products represent about 20% of total sales in other legal markets. 

Cannabis sales through licensed cannabis retailers (LCRs) in Newfoundland and Labrador totalled $17.7 million in Q2 of 2022, an increase of 10.2% over Q2 2021. Online sales brought the total to $17.8 million.

This was also an increase from Q1 2022’s sales of $15.4 million

Effective October 1st, 2022, the NLC also increased commission rates paid to Tier 1 and Tier 2 LCRs from 15% to 20%. The province has four different retail “tiers” of cannabis retail licences, with Tier 1 stores operating as stand-alone cannabis-only locations, while Tier 2 stores are cannabis-only stores that are located in an existing non-cannabis retail location. 

Tier 3 stores operate within non-cannabis retail locations but have their own separate counter, while Tier 4 stores sell cannabis at the same counter as other non-cannabis products. For example, the island of Newfoundland currently has 11 “C Shop” cannabis stores located inside larger shopping centres. 

The provincial regulator hopes the new commission rate will help these stores to “mitigate the specific challenges of this store format compared with other tiers and improve the viability of these specialized stores in our local cannabis industry.”

The province originally approved 24 retail locations and has been slowly adding new stores over time. Earlier this year NLC began allowing cannabis clone sales at select retail locations. 

In October 2021, in order to better manage a growing number of retailers and demand, the NLC began warehousing and selling cannabis to LCRs. Prior to this, cannabis producers sold and distributed cannabis directly to retailers.