SQDC expansion woes don’t worry Legault

My goal is not to make profits with cannabis and the Société québécoise du cannabis.

Premier François Legault says the profitability of Quebec’s government-run cannabis outlets is of little concern to him because he is focused on the rules governing the substance’s sale and consumption.

In a news briefing Wednesday on the first day of his economic mission at the Davos Economic Forum in Switzerland, he noted his government was busy raising the legal age to purchase cannabis to 21.

Among the other terms of the bill tabled last month, Quebec intends to prohibit the consumption of cannabis in all public places, including parks and playgrounds.

“My goal is not to make profits with cannabis and the Société québécoise du cannabis,” Legault said.

Three months after opening for business, the SQDC, the provincial agency that oversees the province’s network of recreational cannabis sales outlets, says it has recorded $40 million in sales but continued supply problems have forced it to curtail plans for expansion.

The SQDC now intends to have a network of 40 stores in the province by 2020, 10 fewer than the 50 envisioned in the original expansion project.

Soon after the legalization of recreational cannabis on Oct. 17, the shelves of SQDC outlets were bare — a situation seen elsewhere in the country.

Re-supply was so problematic that the agency reduced the operating hours of its 12 outlets to four days a week.

EXPANSION ‘ON ICE’

“We have put (the outlet expansion) on ice,” SQDC president Jean-François Bergeron told Presse Canadienne, adding that the agency hopes to have enough time to adapt to the requirements of the Legault government that forbid stores from being close to CEGEPs or universities.

Bergeron said he hopes to see an improvement in the supply situation by the spring. Despite these problems, the SQDC is still planning to establish three new branches — in Brossard, Joliette and Gatineau — by summer.

“I think it’s better for customers to have a larger (sales) network open four days a week than a smaller one open seven,” said Bergeron. “Once those branches are open, it will be easier to expand store hours an extra day.”

Bergeron did not want to speculate about revenues or profits realized in the short term, but indicated he expects to end the first full year of operations — which would end in March 2020 — with a surplus.

The SQDC accounts for about 35 per cent of legal cannabis sales in Canada, Bergeron said. The average price for a gram in Quebec is $7.27, taxes included, while the Canadian average price is $9.70.

However, Bergeron acknowledged that the black market continues to undercut the legal industry, selling its wares for about $5.50 a gram.