While expanding its retail operations, Quebec’s province-owned weed monopoly nearly doubled its profits in less than four months.
Monday morning, the Société québécoise du cannabis released its interim financial report for the 16 weeks ended Jan. 2., posting a 54 per cent increase in quarterly profits and adding 11 new stores.
The SQDC reported record sales of $173 million, up 44 per cent from $120.2 million in the second quarter.
Third-quarter net income was a reported $23.3 million, compared to $15.1 million in the second quarter and $11.6 million in the same quarter last year.
“The SQDC’s significant growth is largely attributable to its retail deployment plan,” the provincial Crown corporation said in its statement.
During the quarter, the SQDC added 11 stores including two in Montreal at Le Village and Avenue du Mont-Royal; one in Sherbrooke’s Fleurimont; and other towns including Est a Malbaie, Coaticook, Saint-Félicien, Varennes, Sainte-Anne-de-Beaupré, Thetford Mines, Cowansville and Pincourt.
The company offers same-day delivery in the city of Laval and jurisdictions in Montreal’s south shore, and in the western Montérégie region.
The SQDC operates a total 56 stores, adding 23 more over the previous year. In its previous report, the provincial retailer said new store openings had been delayed due to a pandemic-related shutdown of the construction industry last spring, but has since followed through in completing the planned locations.
A total 28,254 kilograms of cannabis was sold both in-person and online.
In-person stores reported sales of 26,239 kilograms, totalling $159.2 million from 3.3 million transactions.
Online sales, via approximately 170,000 transactions, distributed 2,075 kilograms of cannabis for a total of $13.8 million. Net expenses for the quarter totalled $20.2 million or 11.7 per-cent of sales.
More than 17 million transactions have taken place since the SQDC opened two years ago.
All of the SQDC’s profits go to the Cannabis Prevention and Research Fund, in accordance with its mission of selling weed without encouraging its use while stopping illegal sales in the province.
By the end of the quarter, the public corporation estimated it captures around 50 per cent of the illegal cannabis market, which it attributes to its product strategy and offering the lowest prices for legal weed in Canada.
“The SQDC remains confident of exceeding its current fiscal year targets and of continuing to carry out its mission of converting users from the illegal market while maintaining a focus on health protection,” reads its statement.
Quebec’s cannabis monopoly continues to expand its operations and increase profits while other large provinces — which control provincial distribution with a mix of public and private sales — struggle to make money.
The British Columbia Liquor Distribution Branch reported $135.9 million of sales in its 2019-2020 fiscal year report, and the Ontario Cannabis Store lost $42 million in the last quarter of 2020 ended Jan. 2.
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