NLC today released its financial and operational results for the first quarter of fiscal year 2024-25, ended July 6, 2024. All information is unaudited.

NLC reported net earnings for the quarter of $48.0 million, an increase of $0.4 million, or 0.9%, compared with Q1 of fiscal year 2024. NLC paid $44.0 million to the Government of Newfoundland and Labrador in the quarter, a decrease of $4.0 million compared to $48.0 million in the first quarter of fiscal 2024. The difference is due to the timing of payments. An additional $4.5 million was approved and remitted in the quarter which related to fiscal 2023-24.

“NLC has enjoyed a strong start to the fiscal year,” said Bruce Keating, NLC President and CEO. “Market conditions in the first quarter in the previous two years have been more challenging but are much stronger as we begin this fiscal year. Sales in the mature beverage alcohol market are up by more than 5%, and retail sales in the still developing legal cannabis market have increased by more than 25% compared to last year. Our focus remains on providing our customers across the province with the best experience possible, disrupting the illicit cannabis market, and building NLC around a core and expanding pillar of social responsibility.”

Beverage alcohol sales for Q1 were $74.1 million, which is an increase of 5.8% over the prior year. All product categories were higher than Q1 of fiscal 2024. The ready-to-drink (RTDs) category had the largest increase, which was 27.9%.

Sales through NLC’s corporate stores were higher than Q1 of the prior year by 4.3%, while Liquor Express outlets across the province experienced an increase of 8.8% compared with Q1 of the prior year. Sales through licensees were 5.2% higher than the prior year.

In addition to direct sales, NLC earns commissions on the sale of beer through Brewers’ Agents. These commissions for the quarter totalled $15.3 million, lower than Q1 2024 by 6.6%.

During Q1, NLC continued to improve and invest in the customer experience by completing renovations at two corporate stores on Kelsey Drive and Stavanger Drive in St. John’s. Renovations included installing digital monitors as well as lighting and shelving improvements to enhance the store layout and design. These two stores were partially renovated in fiscal 2022.

NLC continued to highlight and support local business throughout Q1 by listing 75 beverage alcohol products from local producers.

Cannabis sales through licensed cannabis retailers (LCRs) totalled $24.2 million in Q1, an increase of 25.8% over Q1 of the prior year. Total retail cannabis sales in Q1 including online sales were $24.3 million. Whole flower remains the top cannabis category representing 37% of total sales, followed by pre-rolls at 22%, and vape products at 14%.

Cannabis NL listed 113 products through local cannabis producers during Q1. As of the end of Q1 there were 55 LCRs in Newfoundland and Labrador, consistent with year end. A Request for Proposals for up to four Tier 1 LCRs was issued in Q2, with results expected by the end of Q2 and stores opened before the end of the fiscal year.

Rock Spirits produced 69,000 cases of spirits and 4,700 cases of RTDs and beer during Q1, a decrease of 10.0% in spirits and a decrease of 14.5% in RTDs and beer over the same period the previous year. The decreases were driven primarily by a reduction in demand for the product of some of our co-packing partners, as well as by the timing of production.

During Q1, Rock Spirits signed a three-year Agreement with Atlantic Spirits and Wine Limited to represent Rock Spirits’ products in NL. In addition, a new RTD, Screech Creamsicle, was launched in the province. Rock Spirits will continue to seek out local and international partnership opportunities.

NLC conducted 922 inspections on liquor establishments and cannabis retailers in Q1, as it continues to work closely with the licensee community. This represents a 7% decrease from the number of inspections conducted during the same period in fiscal year 2024 (998). NLC’s Regulatory Enforcement team did not seize any illicit cannabis product during the period, however, they continue to conduct investigations related to illegal activity. NLC now estimates that 84.0% of the illicit cannabis market has been captured further establishing the legal cannabis industry and marginalizing the illicit market.

NLC is committed to placing Corporate Social Responsibility at the forefront of everything it does. During Q1, NLC carried out responsibilities and programs through its Corporate Social Responsibility platform, Together with Purpose, emphasizing the corporation’s commitment to people, communities, and the planet.

As part of NLC’s commitment as a responsible retailer, NLC launched its newest Social Responsibility campaign, Mindful Moderation, which provides a series of tips on how to stay mindful when consuming alcohol, along with important resources regarding safe consumption and support.

In an effort to further strengthen local communities, NLC launched its Community Donations Program. Eligible charities and non-profit organizations can apply for donations of up to $1,000 to support their local programs and projects. Donations will be awarded on a quarterly basis. Recipients of the first quarterly Community Donations round include Benoit First Nation, Burin Area Food Pantry, and YMCA of Northeast Avalon. NLC continued to support Pride month by raising the Progress Pride flag at its head office, generating awareness through in-store and online messaging, and donating to Pride initiatives across the province. NLC also continued its partnership with Quadrangle NL, providing essential funding towards their mental health programs for 2SLGTBQIA+ community members.

During Q1, NLC filed its first report in compliance with Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act. The report details the steps taken by NLC during the previous fiscal year to prevent and reduce the risk of forced labour or child labour by NLC or those in NLC’s supply chains. NLC will continue its due diligence with this important Act throughout the fiscal year.

In accordance with federal regulations regarding the ban of single-use plastics, NLC made a concentrated effort towards eliminating plastic ring carriers from beverage alcohol products in its stores and ensuring that suppliers were being compliant by providing environmentally friendly packaging. NLC looks forward to working with its suppliers in continuing to promote a more sustainable future within the industry.

NLC is a Crown Corporation of the Government of Newfoundland and Labrador with responsibility through the Liquor Corporation Act, the Liquor Control Act, and the Cannabis Control Act for the importation, sale, distribution and management of beverage alcohol and cannabis. NLC also ensures the delivery of programs that promote safe, responsible consumption.

NLC is one of the largest retailers in the province. Through 28 corporate retail locations, over 140 agency stores, more than 550 Brewer’s Agent outlets, and over 1,400 restaurants, lounges, and other licensees, along with private order services, NLC offers over 4,000 products per year to consumers and its retail partners from more than 20 countries. It also regulates and distributes to 55 licensed cannabis retailers across the province, and offers customers a secure, legal online environment for cannabis purchases via ShopCannabisNL.com. NLC operates a 77,000 square foot distribution centre, as well as a manufacturing operation, Rock Spirits. The facility, which runs world-class blending, bottling and canning operations, ships to more than 30 countries around the world and has been in operation for over 65 years.

NLC operates with the expectation that it will generate revenue for the Government of Newfoundland and Labrador, with 100.0% of its profits reinvested in the province to fund key public services. NLC aspires to build trust in everything it does - with customers, employees, retailers, commercial partners, and communities, along with Government, to ensure a stronger Newfoundland and Labrador.