Volume and new stores help legal Cannabis revenue soar in BC, despite price declines
BC had 490 cannabis stores at end of September, 8,4% more than one year earlier.
Legal cannabis sales in B.C. continue to soar five years after the first legal cannabis stores opened in Vancouver.
The problem for operators is that there is much more competition, and prices for the products have fallen.
"We're selling more but making less," Evergreen Cannabis owner Mike Babins told BIV this afternoon.
His venture was the first private cannabis retailer to get a provincial licence to operate, in December 2018. He then had to delay opening until Jan. 5, 2019, because of what he said at the time were bureaucratic delays with the City of Vancouver.
City Cannabis, near East 57th and Fraser Street, was the second private cannabis retailer to get a provincial licence to operate in Vancouver but was the first one to open its doors: on the evening of Jan. 4, 2019.
Owner Krystian Wetulani told BIV on Jan. 4, 2019 that he planned to open his store on Jan. 5, 2019. He then changed his mind and opened in the evening of Jan. 4, 2019, in order to win bragging rights for selling the first legal gram of cannabis in Vancouver.
A second legal City Cannabis store, at 610 Robson Street, had been set to open on Jan. 8, 2019, but Wetulani told BIV today that this opening was slightly delayed.
City Cannabis separately obtained city-issued licences to operate illicit cannabis stores in Vancouver before the Canadian government legalized cannabis for adult use countrywide, on Oct. 17, 2018.
A government-run store in Kamloops sold the first legal cannabis in B.C. on that date.
Revenue soars despite falling retail prices
The most recent British Columbia Liquor Distribution Branch (BCLDB) data show cannabis sales are booming, and demand is high.
The government sold a whopping 40.9 per cent more grams of cannabis to wholesale customers, or 33,879,347 grams, in the three months ended Sept. 30, compared with the same quarter one year earlier. Those sales were to government and private retail stores.
By dollar value, however, BCLDB's wholesale revenue was only up 24.3 per cent, to $137,126,714. The reason why revenue was not up by a higher percentage is because cannabis prices on average fell 11.7 per cent year-over-year, according to the BCLDB.
Executives or principals at cannabis stores told BIV that they have not seen their own sales spike, largely because there is more competition.
B.C. had 490 legal cannabis stores in the quarter that ended Sept. 30, up 8.4 per cent from the 452 stores that were open one year earlier, according to the BCLDB.
Babins told BIV that his business is profitable although it is making less money than it did during the pandemic.
Crimped household budgets mean customers are buying larger quantities less frequently in order to get bulk discounts. Customers are also trading down to lesser priced products, he added.
Wetulani told BIV this afternoon that his company, now going through receivership, has seen lower sales year-over-year.
Wildflower Brands bought City Cannabis for $45 million in stock in April 2019. Wildflower then entered receivership in April 2023, and reciver Ernst & Young is likely to soon sell Wildflower's City Cannabis assets, Wetulani said.
"The taxes we pay still make it more expensive for us to operate, when you're competing against the illicit market," he said. "The taxes are ridiculous."
Industry frustration with high taxes is something that has not changed in the past year, as it was a point of contention last January.
