Over the course of the pandemic, Newfoundland and Labradors’ residents consumed notably more cannabis than in the previous year, the region’s regulator says, despite long delivery times and a strike that temporarily banned shoppers from over half the N. L’s marijuana retailers.
Bruce Keating, president and Chief Executive of the N.L Liquor Corporation, said sales of cannabis products have grown like a week over the last 12 months. Sales of bud, tinctures and oils totaled more than $50 million, compared with only over $37 million the previous year.
“We’re up about 35 or 36 percent over the prior year,” he said.
The rise in sales happened despite 2020’s strike by Dominion workers in the region, which saw the temporary closure of 10 sites that sell cannabis stuff.
“Those stores were actually on strike, and were not open for about a 10- or 12-week period during the summer,” said Keating.
By comparison, cannabis outpaced even the growth of alcohol sales, which went up by 6%, Keating said. The inconsistency is
“not surprising … [cannabis] is still a new and evolving industry.”
Despite the rise in provincial sales during the pandemic, the vast majority of business comes from in-store purchases rather than the existing online ordering system.
“If you look at 100 percent of the sales over the past year, roughly two percent of that has been through that online channel,” Keating said.
There are 30 licensed cannabis retailers in the region, with the many of them based in St. John’s and the metro area.
NLC aims for 48-hour delivery
Whereas storefront concentration on the Avalon may appear like it would be addressed by online distribution, orders have been quite low, with some customers choosing to drive longer distances to retail stores or acquiring their stuff via illicit means.
Requests for proposals for new retailers were sent out this past week, Keating added, and whereas the NLC hopes to raise the number of stores in N.L by 50%, they additionally want to update the existing distribution system to meet those gaps.
“What we’re going to start doing,” he said, “is warehousing cannabis products in the distribution centre.”
Canadian suppliers currently ship to retailers in the region alone.
As per NLC data, if an individual is placing an order today on the current platform, it could take up to 9 days if distributors are shipping directly to consumers.
Once they start warehousing products, Keating said, they will be able to distribute directly to local retailers, which will imply a wider selection of suppliers for stores, and dramatically reduce shipping times for consumers.
“It’s been as much as 21 days during COVID, because of backlogs in postal services,” said Keating.
“Once we put it into our distribution centre, we will be able to guarantee delivery within 48 hours anywhere around the province to a consumer.”
As per Keating, in the time since legalization, Newfoundland and Labrador have gone from only a few players in the sector to 18 suppliers, with intentions to add more and an aim of at least 45 retailers.
“The whole supply chain is getting much more complex,” he said.
With the sector growing bigger, Keating added that centralizing the distribution for retailers will streamline the whole supply chain and hopefully place the sector for future expansions.
“We’re even exploring ways that we would … be able to get that down lower than the 48 hours.”