Cannabis sales in N.L. hitting highs through pandemic, says NLC
Corporation hopeful revamped distribution will boost online sales, cut shipping times
Over the course of the pandemic, Newfoundlanders and Labradorians consumed notably more cannabis than in the year prior, the province's regulator says, despite long delivery times and a strike that temporarily barred shoppers from over half the province's marijuana retailers.
Bruce Keating, president and CEO of the Newfoundland and Labrador Liquor Corporation, said sales of cannabis products have grown like a weed over the past 12 months: sales of bud, oils and tinctures totalled over $50 million, compared with just over $37 million the year before.
"We're up about 35 or 36 per cent over the prior year," he said.
The increase in sales occurred despite last year's strike by Dominion workers in the province, which saw the temporary closure of 10 locations that sell cannabis products.
"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 crept up by six per cent, Keating said.
The disparity is not surprising, he said.
"[Cannabis] is still a new and evolving industry."
Despite the uptick in provincial sales during the pandemic, the majority of business comes from in-store purchases, rather than the existing online ordering system.
"If you look at 100 per cent of the sales over the past year, roughly two per cent of that has been through that online channel," Keating said.
There are 30 licensed cannabis retailers in the province, with the majority based in St. John's and the metro area.
NLC aims for 48-hour delivery
With storefronts concentrated on the Avalon Peninsula, online distribution would seem to be poised to pick up the slack elsewhere, but orders have remained low, with some consumers opting to drive longer distances to retail locations, or obtaining their products through illicit means.
Requests for proposals for new retailers were sent out last week, Keating said, and while the NLC hopes to increase the number of stores in the province by 50 per cent, they also 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 province individually.
According to NLC data, if someone places an order today on the current platform, it could take up to nine days if suppliers are shipping directly to consumers.
Once they begin warehousing products, Keating said, they'll be able to distribute directly to local retailers, which will mean a broader selection of suppliers for stores, as well as dramatically lower 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."
According to Keating, in the time since legalization, the province has gone from just a few players in the industry to 18 suppliers — with plans to add more — and a goal of at least 45 retailers.
"The whole supply chain is getting much more complex," he said.
With the industry growing larger, Keating said centralizing the distribution for retailers will streamline the entire supply chain, and hopefully set up the industry for future advancements.
"We're even exploring ways that we would … be able to get that down lower than the 48 hours."
With files from The St. John's Morning Show