The SQDC posts a profit of $15.1 million for the second quarter of its 2020-2021 fiscal year

Montréal, November 17, 2020 – The Société québécoise du cannabis (SQDC) ended its second quarter on September 12, 2020, with sales of $120.2 million, a $56.6 million increase from the second quarter of the preceding fiscal year. The SQDC also reported net income of $15.1 million for the quarter, up $10.1 million from the second quarter of fiscal 2019-2020. At the end of the first 24 weeks of its current fiscal year, the SQDC posted net income of $24.8 million, compared with $6.3 million for the same period last year, all of which will be remitted to the Gouvernement du Québec and reinvested primarily in cannabis research and prevention.

Based on Québec’s total annual consumption, assessed at 150 metric tons, the SQDC estimates it has captured nearly 50% of the illegal market while continuing to adhere to its mission of distributing and selling cannabis with a focus on health protection and converting users from the illegal market without encouraging cannabis use.

The SQDC’s significant growth is largely attributable to its retail deployment plan, with the company having 45 stores in operation on September 12, 2020, as opposed to 20 stores on the same date last year. It should be noted that new store openings, which were put on hold last spring due to the complete shutdown of the construction industry, are once again under way, with three new stores being opened in the second quarter.

Despite the COVID-19 situation, the SQDC remains confident of reaching its current-year targets.

Government revenue from operations in the form of excise and consumer taxes totalled approximately $40.8 million for the second quarter and $78.6 million for the first 24 weeks of the fiscal year.

The results at a glance

• The SQDC recorded sales of $120.2 million for the period from June 21 to September 12, 2020. This corresponds to 20,830 kg of cannabis sold legally during the quarter.
• • The store network sold 19,139 kg of cannabis, with sales totalling $111.4 million. Around 2.3 million transactions took place.
  • Online sales reached 1,691 kg of cannabis for a total of $8.8 million. Some 100,000 transactions were involved.
• Net expenses amounted to $14.7 million or 12.2% of sales.
• In addition, government revenue from operations in the form of consumer taxes and excise taxes (collected from producers) totalled around $40.8 million.

Quarterly highlights

• During the second quarter, three new points of sale were added to the network, specifically in Saint-Eustache, Mont-Laurier and Sept-Îles. All the new employees underwent rigorous training developed in collaboration with the Ministère de la Santé et des Services sociaux.
• Always striving to better fulfill its mission, the SQDC made improvements in customer support. For example, visitors to its website can now check product availability in each store. Also, same-day delivery has been extended to the city of Laval. Originally offered only on the island of Montréal, the service may soon be introduced in other regions.

COVID-19

The SQDC continues to apply the latest hygiene and physical distancing measures in all its stores. No COVID-19-related incidents have been reported to date. The pandemic otherwise had little impact on the SQDC’s financial results for the quarter. After experiencing a rise in sales during the first weeks of the pandemic, sales volumes returned to expected levels. However, the slowdown in construction did force the SQDC to postpone the openings of several new stores.

Interim financial report

The interim financial report for the 12-week quarter ended September 12, 2020, is now available (in French) in the Publications section of SQDC.ca.