N.W.T. falls short of cannabis revenue targets by more than 80%
Territory reports only a fifth of the revenue expected from cannabis after legalization
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."
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.
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.