On an annual basis, NLC offers its suppliers an opportunity to provide a re-quote of their products, based on current costs. NLC has recently completed this process for both cannabis and beverage alcohol suppliers, with cannabis price changes having taken effect April 1, 2022 and beverage alcohol changes taking effect May 1, 2022.
With respect to cannabis, prices have reduced by an average of 6.0%, largely driven by the fact that this is still a new and emerging market, all licensed producers are located in Canada (thus negating international shipping and supply chain concerns), and there is a significant oversupply of product currently in the market. The decrease in retail prices on cannabis will also assist NLC and its partners in further disrupting the illicit market.
With respect to beverage alcohol, while price changes will vary by product and category, the average overall increase will be approximately 3.9%. This change recognizes the significant impact to beverage alcohol suppliers of higher costs of goods and services, increased freight surcharges, increased federal excise tax and the strain on global supply chain and logistics – increases that have contributed to Canada’s most recent inflation rate of 5.7%.