N.W.T. falls short of cannabis revenue targets by more than 80%

The territorial government made only a fifth of the cannabis revenue it budgeted for — just over $1.3 million out of the expected $5 million.

Territory reports only a fifth of the revenue expected from cannabis after legalization

A woman takes a look at the cannabis offerings at the Yellowknife liquor store on 49 Street. (Gabriela Panza-Beltrandi/CBC)

Turns out legal cannabis wasn't the revenue generator the N.W.T. thought it would be.

While the territorial government budgeted for almost $5 million in revenue from cannabis, it actually received just over $1.3 million — a shortfall of more than 80 per cent.

The Northwest Territories Liquor and Cannabis Commission reported its cannabis revenues for the 2018-19 fiscal year in an annual report tabled last week at the legislature. The report notes that the fiscal year represents the first time cannabis was legally available for sale.

"It was not known the potential revenue that would be generated," reads the report. "Further, revenues were largely affected by the availability of supply across Canada."

Cannabis retailers struggled with supply issues for months after legalization. Yellowknife's cannabis store ran out of stock twice in its first week of operation.

The meagre revenue resulted in even slimmer profits — just $552,000, more than a million dollars short of projections.

Residents have purchased just over 85 kilograms of dried cannabis since it was legalized on Oct. 17, representing 85 per cent of product sold. The commission also sold just over 67 litres of cannabis oil.

Cannabis seeds were less popular — the report says the commission sold just nine packets.

This sign appeared on the doors of the N.W.T.'s liquor and cannabis store after it sold out of stock Oct 17. Supply shortages affected cannabis retailers across the country in the months after legalization. (Hilary Bird/CBC)

Online store not popular, numbers show

Brick-and-mortar cannabis stores exist in only five communities in the N.W.T. — Yellowknife, Fort Smith, Hay River, Fort Simpson and Norman Wells.

Despite the difficulties of purchasing cannabis in the territory's 28 other communities, the commission's online store brought in $44,000 of sales — less than any of the brick-and-mortar retailers.

The numbers also reveal the markup the territory is applying to cannabis products, which at the low end retail for around $13 per dried gram.

Sales numbers are about 75 per cent higher than the reported "cost of goods sold," meaning it costs the territory, on average, about $9.75 per dried gram.

The markup on dried cannabis appears to be significantly higher in the online store, where the cost to consumers was almost double the cost of goods sold.

A spokesperson for the N.W.T.'s Department of Finance, which oversees the commission, was unable to comment as of Friday evening, but said the department would respond to questions Monday morning.


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?