Vancouver Island’s first government-operated cannabis store opened in Campbell River on July 31. About a dozen people were on hand for the opening. Photo by Marissa Tiel/Campbell River Mirror

B.C. selling less legal cannabis than any province other than P.E.I.

Alberta has sold the most legal pot, raking in $123.7 million from its dozens of licensed stores

B.C. sold less legal cannabis than any province other than Prince Edward Island in the first nine months of legalization and officials blame supply shortages and a slow rollout of retail stores.

Statistics Canada data shows B.C. sold $19.5 million worth of legal pot from October 2018 through June 2019. The only province that sold less was P.E.I., which took in $10.7 million with only a fraction of B.C.’s population.

In its annual report, B.C.’s liquor distribution branch said problems with supply and slower than anticipated provincial and municipal approvals resulted in the province’s cannabis industry evolving at a slower rate.

“Managing inventory levels in an environment of product shortages and unknown customer demand is very challenging,” the branch said. ”The LDB is currently building inventory levels in anticipation of future public and private retail stores.”

Alberta has sold the most legal pot, raking in $123.7 million from its dozens of licensed stores. Ontario, which only began opening brick-and-mortar shops in April, sold $121.6 million while Quebec sold $119.2 million.

Saskatchewan and Manitoba sold $38.2 million and $32.2 million respectively. The Atlantic provinces also sold more than B.C., with Nova Scotia raking in $47.9 million and New Brunswick nabbing $25.9 million.

B.C.’s liquor distribution branch said in its report that Statistics Canada estimates $2.2 billion worth of cannabis was sold in the fourth quarter of last year across the country, but 65 per cent of it was purchased illegally.

The branch report said its strategy on pricing is focused on being competitive with the illegal market and there were 212,000 retail transactions through store and online sales, with an average transaction value of $74.38, in the first six months of legalization.

When edibles are introduced, the industry will need to adapt again, it said.

Branch CEO Blain Lawson said it had a $2 million revenue shortfall this year, due mostly to the upfront costs of adding the distribution and retail sale of cannabis to its operations.

PROVINCIAL POT: Growing B.C. bud in the era of legalization

The national supply shortage has held back legal sales across the country, but B.C. was slow to open stores and it also has the strongest black and grey market in Canada, said Michael Armstrong, an associate business professor at Brock University in St. Catharines, Ont.

Vancouver and Victoria granted business licences to illegal dispensaries in the years prior to national legalization, and some of those shops have remained open despite not being authorized under the new regime, he noted.

“If there are hardly any stores, yeah, some people will go to the government website, but most people … if they’re already getting good service, they’ll just keep going to their grey market or black market retailer,” he said.

He said price and quality are the two biggest factors in a cannabis consumer’s decision of where to shop. Price isn’t playing a big role yet because the product shortage means legal stores sell out no matter what, he said.

“There are enough consumers who are willing to pay the roughly 40 per cent extra for the legal cannabis,” he said. “As product supply improves … then the price competition will be much more important.”

As for quality, Armstrong said legal cannabis has an advantage when it comes to consistency and safety. But illegal pot users frequently report that legal weed isn’t as potent as the best that’s available on the black market, he said.

Legal edibles are expected to become available toward the end of this year, he added, and the industry has been putting a lot of money into developing products that aren’t really available in the black market, such as cannabis drinks.

Some think these products will boost the legal market, but others aren’t convinced people will switch from drinking a beer to a weed cooler, Armstrong said.

Provincial governments, particularly in B.C. and Ontario, should focus on opening more stores, he said, and Health Canada needs to continue issuing licences to growers so they can scale up production.

Once the market is more competitive next year, governments need to reconsider their tax regimes, particularly the complicated excise tax, which differs by jurisdiction and creates challenges for industry, he added.

“On a more average $10-a-gram product, a $1 excise tax is a big chunk and if you want to compete with black market prices that are $5 or $6 a gram, it’s very difficult for the legal industry.”

Laura Kane, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Sixty Sooke homes needed to host Japanese students

Homestay program offers visitors a taste of life in Canada

One-man Frankenstein show coming to Craigdarroch Castle

The Halloween special will kick off at the beginning of October

Backyard burning allowed in Sooke after Oct. 1

It’s important to know the rules

Tour de Rock kicks off on Saturday morning

The 22nd annual Cops for Cancer Tour de Rock ride will take two weeks to complete

Crown alleges resentment of ex-wife drove Oak Bay father to kill his daughters

Patrick Weir alleged in his closing arguments that Andrew Berry is responsible for the deaths of his daughters

PHOTOS: Young protesters in B.C. and beyond demand climate change action

Many demonstaers were kids and teens who skipped school to take part

Former B.C. lifeguard gets house arrest for possession of child porn

Cees Vanderniet of Grand Forks will serve six months of house arrest, then two years’ probation

How to react to Trudeau’s racist photos? With humility, B.C. prof says

‘We are now treating racism as a crime that you cannot recover from’

‘I’d do it again,’ says B.C. man who swam naked, drunk in Toronto shark tank

David Weaver, of Nelson, was drunk when he went to Ripley’s Aquarium in Toronto on Oct. 12 2018

VIDEO: Fire destroys Williams Lake strip club targeted by past arson attempts

Diamonds and Dust Entertainment Lounge destroyed by fire, as well as New World Tea and Coffee House

SOOKE HISTORY: Remembering Sooke’s 1953 soccer team

Elida Peers | Contributed When Milne’s Landing High School opened in 1946,… Continue reading

Trudeau seeks meeting with Singh to apologize for blackface, brownface photos

‘I will be apologizing to him personally as a racialized Canadian,’ Trudeau said Friday

Sixty Sooke homes needed to host Japanese students

Homestay program offers visitors a taste of life in Canada

Charges stayed against Alberta RCMP officer in alleged off-duty Whistler assault

Const. Vernon Hagen instead completed an alternative measures program

Most Read