Cannabis sales through licensed retailers in Newfoundland and Labrador totalled $19.3 million in Q1, up 25.7% over Q1 of the prior year, according to data released by Newfoundland and Labrador Liquor Corporation (NLC) for the first quarter of its fiscal year 2024 ending July 1, 2023.
Overall Results
NLC reported net earnings for the quarter of $47.6 million, an increase of $0.2 million or 0.5% compared with Q1 of fiscal year 2023.
The dividend paid by NLC to the provincial government totalled $48.0 million for the quarter, $5.0 million lower than Q1 of the prior year. The dividend is lower in Q1 of this year due to the timing of payments.
“We’re happy with our accomplishments in the first quarter,” said Bruce Keating, NLC President and CEO. “Despite more challenging marketing conditions for beverage alcohol that mirrors what we’re seeing in other jurisdictions, we were able to deliver a small increase in net earnings. As well, we saw double-digit growth in cannabis sales, as we work to disrupt the illicit market, thanks in part to the approval of cannabis vape products late last year as well as strong regulatory insight.”
Cannabis Sales
Total retail cannabis sales in Q1 including online sales were $19.4 million.
Category growth was driven by vape, ground/milled, and whole flower products. Cannabis vape products, which launched in Q3 last year sold $2.1 million in Q1 this year and represented 11% share of sales.
In June, the Maritime provinces saw the biggest sales increases out of the Canadian provinces. Sales were up 6.03% in Newfoundland and Labrador to $6.63 million.
Four new licensed retailers opened this quarter in the towns of Clarenville, Harbour Breton, St. Anthony, and Twillingate. As of the end of Q1, there were 43 stores in the province, compared to 40 one year prior.
Enforcement Activity
929 inspections on liquor establishments and cannabis retailers were conduced by NLC in Q1, a 7% increase compared with the number of inspections conducted during the same period last year. NLC’s Enforcement Team did not seize any illicit cannabis product during the period, however, they continue to conduct investigations related to illegal activity.
Penetrating the Illicit Market
NLC says the lack of seizures may also be an encouraging sign that the legal sale of cannabis by licensed retailers is successfully penetrating the illicit market. Elsewhere in the Maritimes, some provinces are struggling to do the same. In June, Cannabis NB said it continues to face real challenges to shift the illicit customer base to the legal market.