After 4 years of legalization, Alberta finally turns a profit on cannabis

Four years after cannabis legalization, theAlberta Gaming, Liquor, and Cannabis (AGLC), which supplies the province with cannabis, is expected to generate a profit of $7 million from cannabis sales, according to the 2022-23 provincial budget.

This could represent a change of 18 million $CA in revenue compared to a projected loss of 11 million $CA for the fiscal year ending next March 31, according to the Canadian provincial government.

This announcement comes as the AGLC is preparing to close its retail cannabis website on March 8, thereby relinquishing its monopoly on legal online cannabis sales, which accounted for approximately 1.5 % of Alberta’s legal market.

At the same time, the Alberta government tax revenue Revenue from private cannabis sales is expected to rise from a projected $145 million for the current fiscal year to $157 million in 2022–23, representing an increase of 8%.

By comparison, these $157 million represent well more than double the $73 million expected from the province’s tourism tax, but are well below the $644 million in tobacco and smoking taxes projected for the coming year.

The AGLC and at least one cannabis retailer have stated that part of theexpected increase in revenue can be attributed to a new 6% increase in the wholesale price of products, which took effect on Friday and will be passed on to consumers, who have so far been enjoying very low prices for their cannabis.

«It’s fair to say that Alberta has the cheapest cannabis in the country and that it will always be cheaper than in British Columbia, Manitoba, and certainly Quebec,» said Ryan Roch, owner of Lake City Cannabis, to the Calgary Herald. According to him, the tax will add about 1 $ to the price of a pack of pre-rolled joints.

An industry that has been growing rapidly since legalization.

«Net revenue from cannabis is expected to remain strong in 2022–23 and includes the implementation of the wholesale markup,» the AGLC said. «The cannabis industry has continued to increase its revenue since legalization, with expanding product lines and growing retail networks.»

The a growing number of cannabis stores In the province—which has now authorized 752 retail outlets, representing half the number of liquor stores in Alberta—plays a major role in access to cannabis. At the same time, the number of cannabis users has not increased significantly over the past four years.

Federal regulations that limit the THC content of edibles and concentrates also benefit illicit sellers.

According to Statistics Canada, cannabis sales in Alberta last December increased by 3% compared with the previous year.

While some businesses were closed or subject to strict restrictions during the waves of the COVID-19 pandemic, cannabis and alcohol stores were considered as essential services and allowed to operate almost normally.