The SQDC is estimated to make advances against the black market despite the COVID-19
The canadian Press
MONTREAL – If the COVID-19 cause him a few problems, the quebec Society of cannabis (SQDC) believes that the health crisis seems to at least encourage a growing number of regulars at the black market to turn to it in order to get supplies.
The State company does not have accurate data to this effect, but in the light of comments received from the staff of its network of 41 branches, its chairman and chief executive officer Jean-François Bergeron is estimated that the pandemic has given a certain boost.
“People are quite transparent and they speak to us. In stores open for a year, we see new faces,” he explained during a telephone interview with The canadian Press to make the point about the financial year that ended at the end of march.
In a context of health crisis, where we repeated the instructions of distancing physical, some have opted for SQDC and its products sold in sealed packages, in an environment where the rules were respected, ” added Mr. Bergeron.
According to the most recent data, the State-owned company is estimated to have ripped off about 40 % of the illicit market.
“The bulk of the capture of the black market is done in the branches, said Mr. Bergeron. Customers want to see the rate of product concentration of production to the other and it is more difficult to assess on the web (where about 10 % of sales are made).”
It is difficult to say what has been the effect of the COVID-19 on the performance of the SQDC, since the same time last year, it had only 13 stores that had to close their doors a few days a week because of supply problems.
At the end of its first full fiscal year, the SQDC has realized a gross profit of approximately $ 70 million. After fees and other expenses, it is a dividend of $ 26.3 million, which was paid into the coffers of the State – beyond the target of $ 20 million previously mentioned by Mr. Bergeron.
On their side, sales were $ 311,6 million $, of which $ 286 million $ in the network of shops. The dried flowers have represented 288 million $ sales.
In the previous fiscal year, which were only six months, had resulted in a deficit of $ 4.9 million primarily attributable to start-up costs. The turnover was of $71 million.
After a start marked by shortages of stock due to supply problems, the SQDC has opened 28 branches in the last year, which allows him to have a physical presence in 13 administrative regions. Mr. Bergeron, who hopes to be able to generate a profit of $ 50 million this year, wants to add the same number of institutions in the network.
However, the pandemic, which has temporarily crippled some sectors of the economy, such as construction, could change the game.
“The health crisis has slowed down the deployment of projects which is our main source of growth (branches), said Mr. Bergeron. Like last year, I have the impression that this is going to come pushing and shoving in the second half of the year.”
Slowly, the edible products are installed at the SQDC, but unlike elsewhere in the country, we do not find chocolates, gummy bears and other sweets because the legislative framework is more restrictive in Quebec. The offer should continue to be limited to teas, different types of carbonated water, as well as hashish.
Given that many producers have invested for some types of edible products, they may want to recoup their investments before to enhance their portfolio and provide what is sought by the corporation.
“Some products could make their arrival this year, but I don’t have an example, said Mr. Bergeron. In addition to the beverages, we have no products that are the subject of research and development with the producers.”
All products combined, the average price of a gram of cannabis was with 7.64 $ at the end of the year at the SQDC. On the black market, the average is 6 $ a gram, explained Mr. Bergeron, adding that the State-owned company offered more than 40 products with an average price below this threshold.
The SQDC is not planning to price increases, but its leader recalled that it is also the responsibility of the producers. Since some are in a more precarious financial situation, rates could be revised according to the increase of the share of the latter.