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

| David Brown

The Société Québécoise du cannabis (SQDC) ended its third quarter for cannabis sales on January 2, 2021, bringing in a record of $173 million in sales, with a profit of $23.3 million. 

This represented a $62.2 million increase in sales from the same period a year prior. The SQDC brought in $11.6 million in profits from sales in the same quarter of 2019-2020.

The provincial retailer brought in $48.1 million in net sales at the end of the first 40 weeks of its 2020-2021 fiscal year, compared to $17.9 million from the previous year. Quebec reinvests its profits into different provincial programs, including prevention and research in the field of cannabis.

To this net income is added to Quebec’s revenues from its operations in the form of consumption tax and excise duties, which amounted to approximately $48.5 million for the third quarter and nearly $127.1 million for the first 40 weeks of the fiscal year. 

Quebec attributes much of the growth in revenues to the deployment of 11 new retail locations, for a total of 56 provincially-run SQDC stores currently operating, as well as what the province says is the lowest average retail price for cannabis in Canada.

The SQDC estimates they have captured about 50% of the previously-illicit cannabis market since legalization began in October 2018. 

Although it has some of the lowest prices in Canada, Quebec has some of the strictest cannabis rules in Canada, with a ban on edibles and most extracts, including all vape pens, and the highest age of access, at 21. 

The province also banned home production of cannabis, although a court struck down the rule in 2019. The province is currently appealing that ruling. 

Brick and mortar stores in Quebec sold 26,239 kg of cannabis, with sales totalling $159.2 million. Around 3.3 million transactions took place. Online sales reached 2,075 kg of cannabis for a total of $13.8 million. Some 170,000 transactions were concluded.

In 2016, Quebec’s Finance Minister said the province wanted nothing to do with selling cannabis.

“I will never have the obligation to commercialize (cannabis) even if it becomes legal. It’s not up to the province of Quebec to do that,” said Quebec Finance Minister Carlos Leitao.