The Société québécoise du cannabis (SQDC) got its 2020-2021 fiscal year off to a strong start. For its first quarter, which began March 29, 2020, and ended June 20, 2020, the company had sales of $110.4 million, an increase of $65.3 million from the first quarter of its preceding fiscal year. The SQDC reported net income of $9.7 million for the quarter, an increase of $8.4 million over the corresponding quarter of fiscal 2019-2020. The entire amount will be remitted to the government and reinvested primarily in cannabis research and prevention. The SQDC’s impressive growth is largely related to its retail deployment plan, with the company having 42 stores in operation on June 20, 2020, versus 16 on the same date last year.
Despite the COVID-19 situation, the SQDC remains confident of being able to reach its objectives, in particular those relating to the expansion of its store network. While adhering to its mission to distribute and sell cannabis with a focus on health protection and convert users from the illegal market, all without encouraging cannabis use, the SQDC estimates that it has acquired more than 40% of the illegal market, based on an estimated total annual consumption of 150 metric tons for Quebec.
The Results at a Glance
- The SQDC’s sales totalled $110.4 million for the period from March 29 to June 20, 2020. This corresponds to 18,922 kg of cannabis sold legally during the quarter.
- The store network sold 16,131 kg of cannabis, with sales totalling $94.6 million. Around 2 million transactions took place.
- Online sales reached 2,791 kg of cannabis and a total of $15.8 million. Some 190,000 transactions were involved.
- Net expenses totalled $16.4 million or 14.9% of sales.
- In addition, government revenues from operations in the form of consumer taxes and excise duties (collected from producers) totalled around $37.8 million.
Launch of express delivery on the Island of Montreal
Always with the aim of moving users from the illegal market to the legal market, in mid-July the SQDC began offering same-day delivery on the Island of Montreal for purchases made on the SQDC.ca website. Following this first step, the company plans to expand coverage to other areas with a population density sufficient to support the service.
Impact of the COVID-19 pandemic
COVID-19 has led to a decrease in the number of transactions but also to an increase in the average in-store shopping cart, which may be due to customers visiting stores less frequently during the pandemic. Online, the number of transactions rose sharply early in the quarter before gradually returning to a more normal growth rate late in the quarter. The opening of new stores was delayed by the mandatory shutdown of all construction sites during the lockdown. Actually, the company opened only one new store (in Val-d’Or) during the quarter, as opposed to the five originally planned.
The interim financial report for the 12-week quarter ended June 20, 2020, is now available (in French) on SQDC.ca.
The SQDC is a government corporation mandated to distribute and sell cannabis in Quebec with a focus on protecting customers’ health and safety. For more information, visit sqdc.ca.