Whitehorse Daily Star

Image title

Photo by Whitehorse Star

POSITIVE FISCAL NEWS – The Yukon government made a profit on the sales of cannabis from its now-closed store on Industrial Road (above) and its website sales, it was announced Wednesday.

Image title

Photo by Whitehorse Star

John Streicker and Kate White

Cannabis sales proved financially fruitful: Streicker

The Yukon government made a profit on cannabis sales this year, according to John Streicker, the minister responsible for the Yukon Liquor Corp.

By Gabrielle Plonka on November 7, 2019

The Yukon government made a profit on cannabis sales this year, according to John Streicker, the minister responsible for the Yukon Liquor Corp.

Cannabis Yukon, the government-operated cannabis store, closed last month. The store’s assets were sold to the private sector for $200,000, bringing the liquor corporation into the black on the cannabis file.

The store sold $3.3 million in cannabis products, returning a net profit of $192,000.

The goal of the venture, Streicker said Wednesday, was to break even at the store.

“Overall, we have been not necessarily counting on that revenue,” he said.

Cannabis Yukon was approximately $8,000 in the red before the sale of the assets.

“In terms of sales, (the store) did a great job of paying off the $750,000 investment,” Streicker said.

“If you look at any store that’s out there, it doesn’t usually pay off its initial investment in the first year.

“Not only did we pay off that investment, we made additional money.”

Streicker said he is pleased with how legalization rolled out in the territory. He credited some of the Yukon’s success on the liquor corporation’s nine supply agreements which maintained stock levels and helped keep prices as low as possible.

“So far, I’ve been really impressed overall with how cannabis has been done,” he said.

“Across the country, there were hiccups everywhere, but here in the Yukon, it went really smoothly.”

Streicker told the legislature that legal sales appear to have displaced a chunk of the illicit market.

The estimation is based on a National Cannabis Survey stating that cannabis usage has not changed since legalization in the Yukon on Oct. 17, 2018.

The estimate for overall consumption in the Yukon is between 900 and 1,100 kilograms per year.

In the first year of legalization, approximately 370 kilograms of cannabis were sold in legal stores, Streicker said.

These numbers suggest that 35 to 40 per cent of cannabis sales were purchased legally.

“This is significant,” Streicker said.

He noted that measuring the illicit market is challenging.

NDP Leader Kate White suggested that more Yukon-centric data should be taken to better assess the state of the illicit market through the territorial Bureau of Statistics.

Streicker responded that he would look into the suggestion.

White also suggested that to further push out the illicit market, legal pot prices should be as low as possible.

Speaking to reporters, Streicker agreed that lowering prices is a key goal for the liquor corporation. He said there has been expressed interest in local cannabis production, and this might be the key to securing cheaper stock.

“We’ll work with the private sector,” Streicker said. “I’ll wait and work with them, to see what creative ideas they have, and we’ll bring ours. We all agree, the lower the cost, the more we’ll penetrate the illicit market.”

In the meantime, Streicker said, the liquor corporation is working to improve security of supply to ensure private retailers have access to the amount and type of stock they need.

“Right now, I think the first step is to make sure our private sector is well supported,” he said.

Comments (7)

Up 10 Down 4

Thunberg on Nov 11, 2019 at 10:16 am

John says a lot of cotton candy words, with little substance.

YG believing that they've captured 35-40% of the market is a great indication of how out of touch they are with reality. 370kg of product sold equals $277,500 for Yukon's share of the excise tax. Where did that money go?

The only way prices will come down is through competition (hard to do when the Gov't only works with 8 suppliers), and by reducing the government's take. Yukon charges the highest wholesale markup in Canada (22%, plus $0.50/g "cost of service" tax). But go ahead John, put it on the private retailers. They'll figure it out. Sure, local production will solve the problem. So where are the local producers?

Comparing yourselves to the worst rollout in Canada (Ontario) isn't a good look. Try Alberta, 275 stores and $125m in sales in the first 8 months.

Up 6 Down 9

Moose on Nov 9, 2019 at 12:01 pm

To all of those mocking the government for how it rolled this out. Keep in mind that Doug Ford in Ontario lost 40 million doing the same thing. So a little perspective is needed instead of salty comments.

https://www.cbc.ca/news/canada/hamilton/pot-sales-rosenthal-1.5286351

Up 18 Down 4

Dave on Nov 8, 2019 at 3:34 pm

Good to know the territorial government can be semi- successful as the Yukon’s sole drug dealing cartel.

Up 20 Down 3

Arthur on Nov 8, 2019 at 3:06 pm

What are the odds? A legal monopoly on selling cannabis for a year, with zero chance of getting arrested, and they were able to turn a small profit? I used to run a hardware store and had to compete with Canadian Tire, Home Hardware, Pro Hardware, and back in the day, Nelson’s Hardware! And the RCMP never threatened to arrest any of them!

Up 24 Down 6

Groucho d'North on Nov 8, 2019 at 9:32 am

Closing up shop and selling off assets to balance the books is not a good measure of a successful enterprise.

Up 14 Down 4

Matthew on Nov 7, 2019 at 8:17 pm

Hahaha sounds about right, thinking $8000 in red on $3.3M in sales is great.. silly government..

Up 17 Down 11

jc on Nov 7, 2019 at 5:45 pm

Just wonder how many vehicle accidents were profitable, as a result of Cannabis. Now, I do expect a lot of down arrows on this comment.

Add your comments or reply via Twitter @whitehorsestar

In order to encourage thoughtful and responsible discussion, website comments will not be visible until a moderator approves them. Please add comments judiciously and refrain from maligning any individual or institution. Read about our user comment and privacy policies.

Your name and email address are required before your comment is posted. Otherwise, your comment will not be posted.