Quebec’s cannabis store operator posts CA$66.5 million profit

Quebec’s government-run cannabis store operator, the Société québécoise du cannabis (SQDC), generated net income of 66.5 million Canadian dollars ($55 million) in its recently concluded fiscal year, according to its annual report.

The SQDC reported annual sales CA$537 million for the 2020-21 fiscal year, a substantial increase over the previous year’s CA$ $311.6 million in sales.

The SQDC attributed the increased revenue to its expanding network of stores, which grew by 25 points of sale last year to 66 outlets.

In the fiscal year, the government-run cannabis store operator said it sold 91,529 kilograms (91.5 metric tons) of cannabis, about two times more than the previous year’s 46,863 kilograms.

In-store shopping accounted for the vast majority of sales.

Store network sales were CA$486.7 million, or 90% of overall sales.

Online sales were CA$50.5 million.

The SQDC said it steered nearly 53% of the illegal cannabis market to regulated channels.

“The company is thus fulfilling its mission of drawing users away from the underground cannabis market,” according to a news release.

“The 53% figure is based on the annual demand for cannabis in Quebec, recently estimated at 173 metric tons by the Quebec Finance Department.”

The SQDC says it will continue expanding its store network in the coming fiscal year.

Quebec’s regulated cannabis market was led by Montreal, where CA$217 million of adult-use cannabis was sold in calendar 2020, the second-highest total in the country, according to Statistics Canada data.

Quebec City’s sales that year were CA$67.9 million.

The SQDC said it transferred CA$49.6 in excise taxes to the federal government and CA$188 million to the provincial government.

All profits from cannabis sales in Quebec are sent to the Cannabis Prevention and Research Fund, managed by the Quebec Finance Department, which reinvests primarily in cannabis-related prevention and research.