Despite selling 9.9 tonnes of cannabis since October 17, the Société Québécoise du Cannabis (SQDC) lost money saying it was due to ongoing supply challenges along with high build-out costs.
The majority of sales went through their government-run 12-store network, which sold $57.6 million or 8 tonnes of products. The average sale was $51.07 (including taxes) and they completed approximately 1.3 million transactions. Sales on the SQDC’s site were $13.7 million, corresponding to 1.9 tonnes of cannabis. Around 257,000 transactions were completed, with an average shopping cart of $61.06 (including taxes).
According to Statistics Canada data, Quebec led the country in sales, in both dollars and volume, for the first few months of legalization.
Slow Start to Sales
Soon after launching its store network, the SQDC decided to cut the stores’ opening hours to four days a week in response to supply challenges faced across Canada. As of March 31st, all stores were open five days a week, and they are now open all seven days.
On the Way to Profitability
The SQDC reported that expenses included non-recurring start-up costs around $4.9 million, so excluding those costs the company would have broken even. In addition, government revenues from the company in the form of consumption and excise taxes totalled about $29.7 million.
Based on budget forecasts and producers’ supply cycles, the SQDC expects to become profitable in the coming fiscal year. The Quebec government’s 2019-2020 budget lists the SQDC’s expected net earnings as $20 million. Taxes would be on top of that amount.
All profits made by SQDC will be reinvested in prevention and cannabis research.