SQDC scales back expansion plans three months after opening
13 strains of indica cannabis are stored on shelves in an SQDC store in St. Hubert Plaza, ready for opening day (CTV Montreal/Cindy Sherwin)
Published Wednesday, January 23, 2019 7:58AM EST
Last Updated Wednesday, January 23, 2019 8:46AM EST
Facing multiple supply problems the government-owned marijuana sales company is scaling back its original plans to have dozens of stores opening across the province by 2020.
The SQDC also expects some of its supply problems will be worked out by June of this year.
The SQDC now expects to have 40 stores open by March 2020, instead of the 50 that were originally projected.
Some of the new stores will be in Brossard, Gatineau, and Joliette, while a store planned for eastern Montreal has been cancelled because it would be too close to schools.
The decision to slow the creation of new stores is due to the lack of cannabis supply.
When cannabis was legalized in Canada last year many companies said they would struggle to supply the market, and that prediction has come true in every province across the country.
Within two weeks of opening, the SQDC realized it could not keep stores open seven days a week and maintain stock inhouse. At the moment the supply of cannabis is so tight that there are no plans to open stores every day.
The head of the SQDC, Jean-Francois Bergeron, told the Canadian Press that new stores will open this year, even as the agency is struggling with its supply.
"I think it's better for customers to have a larger network at four days a week than a seven-day network. When branches are open, it's easier to gradually add a day of operation," said Bergeron.
In the first three months of operation the SQDC has sold 5.7 tonnes of cannabis for about $40 million.
That's estimated to be 35 percent of all non-medicinal cannabis sold in Canada since the drug was legalized.
In December the SQDC put out a new call for suppliers and products in hopes of fixing the supply problem.
The SQDC has 110 products in its catalogue, but they are not all available at the same time. About 15 products are being sold online, while about 50 are being sold in stores at any given moment.
That supply problem in the new industry has also enabled the black market to continue, and according to Bergeron the black market is selling pot for less, although he believes prices everywhere will have to increase.
"With lower supply than demand, it creates a huge upward pressure on prices," he said. "Producers know that the market is not balanced. This may create upward pressure in the short term."