SQDC sells $40M in cannabis so far, but not yet profitable

Despite supply shortages, Quebec's cannabis retailer is one of the biggest legal sellers in the country.

In the three months since legalization, the Société québécoise du cannabis has made about $40 million in online and in-store sales.

SQDC president Jean-François Bergeron estimates this amounts to 35 per cent of legal cannabis sold in the country by weight.

On Oct. 17 last year, the province's first 12 outlets quickly sold out of many of its products, with hopeful customers waiting in line for hours in Montreal.

Initially open seven days a week, the retail outlets are now only open Thursday to Sunday to put less of a strain on in-store supplies.

Bergeron says the SQDC now aims to have 40 stores open by March 2020, down from 50 in its original expansion plan.

He says the retailer will also use this time to adapt to the new cannabis legislation that Premier François Legault has said is a priority for his government.

This includes raising the legal age of consumption to 21 and blocking stores from opening near CEGEPs and universities.

However, he said the retailer is still planning on opening stores in Brossard, Joliette and Gatineau by the summer.

And the supply issue should improve in the spring, he said, when more cannabis from licensed producers becomes available.

"I think it's better for customers to have a larger network open four days a week rather than a more restricted seven-day network," he said.

"Once the stores are open, it's easier to progressively add a day of operation."

He predicts the retailer, which has a monopoly over legal cannabis sales in Quebec, to be profitable by the spring of 2020.

The average price of cannabis is $7.27 per gram, including taxes, compared to the Canadian average of $9.70.

However, Bergeron says the price on the black market is lower still — at $5.50 per gram.

Due to demand outpacing the legal supply, Bergeron says the market faces pressure to raise prices in the short-term.

"The producers know the market is not balanced," he said.

The SQDC is looking to buy an additional seven to 10 tonnes of cannabis this year, but Bergeron says that, for now, there is not enough product available from growers approved by the province to fill that need.