NLC today released its financial and operational results for the third quarter of fiscal year 2024, ended December 30, 2023. All information is unaudited.

NLC reported net earnings for the quarter of $58.1 million, an increase of $2.5 million, or 4.5%, compared with Q3 of fiscal year 2023. The dividend paid by NLC to the Government of Newfoundland and Labrador totalled $53.5 million for the quarter, $1.0 million lower than Q3 of the prior year. The lower dividend for Q3 of this year is due to the timing of payments.

“Beverage alcohol and cannabis market conditions have been quite different,” said Bruce Keating, NLC President and CEO. “We are experiencing lower beverage alcohol volumes, driven by the maturity of beverage alcohol, more challenging economic conditions that are impacting consumer spending, and an ongoing return to pre-pandemic consumption levels. Cannabis, on the other hand, is experiencing double-digit growth, which reflects the increase in legal cannabis retail locations, the outstanding work of our Regulatory Services team in tackling the illicit cannabis market, and our ongoing public education efforts. Overall, we’re pleased with the financial results this quarter, and with the work being done by staff in all parts of the business to make NLC even better.”

Beverage Alcohol sales for Q3 were $88.0 million, down 1.1% vs prior year, with decreases in spirits and wine. Compared with Q3 of 2023, RTD (ready to drink) increased 4.8%, beer sales sold through NLC corporate stores increased 1.6%, spirits decreased 1.2%, and wine decreased 2.8%.

Sales through NLC’s corporate stores were down 1.2% compared to Q3 of the prior year, while Liquor Express outlets across the province were down 0.5%. Sales through licensees such as bars and restaurants were higher than the prior year, increasing to $4.4 million for the quarter, an increase of 4.7% compared to Q3 of 2023.

In addition to direct sales, NLC earns commissions on the sale of beer through Brewers’ Agents. These commissions for the quarter totalled $17.3 million, higher than the third quarter of fiscal year 2023 by 11.8%.

During the quarter, NLC continued to improve and invest in the customer experience, completing the renovation of two Liquor Store locations, in Bay Roberts and Clarenville. Upgrades included new flooring, energy efficient lighting, digital monitors, and enhanced store layout and design.

NLC continued to support local business throughout Q3 by listing 75 beverage alcohol products from local producers. Local businesses and beverage alcohol products were also highlighted in the Fall-Winter edition of NLC’s Enjoy Magazine, which included a Keeping it Local section, along with features on local restaurants and a local distillery.

Cannabis sales through licensed cannabis retailers (LCRs) totaled $22.1 million in Q3, an increase of 18.7% over Q3 of the prior year. Total retail cannabis sales in Q3, including online sales, were $22.2 million.

Cannabis NL was pleased to welcome six new LCRs - in the towns of Burgeo, Cape Broyle, Cow Head, Lanse au Loup, Port Saunders, and Robert’s Arm. As of the end of Q3 there were 52 LCRs in Newfoundland and Labrador compared to 41 at the beginning of this fiscal year.

Rock Spirits produced 88,000 cases of spirits and 3,500 cases of RTDs and beer during Q3 - a decrease of 8% in spirits and a decrease of 64% in RTDs and beer over the same period the previous year. The decrease in spirits, RTDs, and beer was driven by a reduction in demand for the product of some of our co-packing partners, as well as by the timing of production.

Rock Spirits signed an agreement with Fog Distillery Co. and began producing Fog Vodka during Q3. Rock Spirits also released an extension to the Screech Rum brand, Screech Snowball liqueur. Rock Spirits continues to seek out local and international partnership opportunities.

NLC conducted 640 inspections on liquor establishments and cannabis retailers in Q3, as it continues to work closely with the licensee community. NLC’s Regulatory Enforcement team did not seize any illicit cannabis product during this period, which is an encouraging sign that customers are continually moving to the legal market. NLC estimates that the cannabis industry in the province is now 81% legal. NLC’s focus is on continuing to shrink the illicit market.

NLC is committed to providing systematic and thorough regulatory oversight and education to its licensees and the public, while encouraging the responsible sale and consumption of controlled products and public safety in the province. Throughout November, NLC’s Regulatory Services team held five educational sessions for beverage alcohol and cannabis licensees from across the province. The sessions which were attended by close to 300 representatives from local bars, restaurants, cannabis retailers and other licensees, provided key knowledge and training to help ensure the safe, legal, and socially responsible retailing of alcohol and cannabis throughout the industry.

NLC is continuing to build on its Corporate Responsibility strategy, encompassing social responsibility, community giving, sustainability, a compelling workplace, and corporate governance.

As a responsible retailer, distributor, and regulator of beverage alcohol and cannabis, NLC is committed to providing information and programs on the importance of responsible beverage alcohol and cannabis consumption. Leading up to the holiday season NLC unveiled a new awareness campaign, End Impaired Driving, to help bring attention to the permanent effects of impaired driving, and the impact on those left behind. To further efforts towards public safety, NLC will continue to engage with and support community partners who work daily to prevent impaired driving, including the Royal Newfoundland Constabulary, the Royal Canadian Mounted Police NL, and MADD Canada.

“Any tragedy related to alcohol or cannabis impairment is a loss that lasts a lifetime for those left behind,” said Bruce Keating, NLC President and CEO. “The End Impaired Driving campaign is a message to everyone that the choice to drive impaired or to allow someone else to drive impaired affects more than just yourself - potentially in the most devastating way. We want Newfoundlanders and Labradorians in every part of the province to take responsibility by consuming alcohol and cannabis moderately, acting responsibly, and ending impaired driving to ensure that everyone gets home safe.”

NLC is also committed to giving back to the community and supporting causes that reflect its corporate values. In December, NLC launched the 12 Days of Giving initiative in support of the Community Food Sharing Association and its member food banks. Thanks to the incredible support of supplier partners, along with the generosity of NLC customers, close to $78,000 was raised, helping to provide holiday food hampers to people in need across the province. NLC matched $15,000 of customer donations. Along with the funds raised in-store, staff across all areas of the business from NLC’s corporate offices, Distribution Centre, retail locations, and Rock Spirits collected both monetary and food donations towards the cause.

NLC continues to focus on creating the most compelling workplace possible for employees. During the quarter, NLC completed its bi-yearly Employee Engagement Survey which confirmed that significant progress is being made in a wide range of areas across the business, including 4 interest in our employees’ overall well-being; promotion of diversity, inclusion and belonging; recognizing staff for achievements; work-life balance; and making NLC a better place to work. The feedback also provides valuable input from our province-wide team to set future priorities and actions.

During the quarter, NLC also continued to work closely with and support our local business partners, including beverage alcohol producers, Liquor Express operators, bars, restaurants, gas stations, convenience stores, licensed cannabis retailers, and cannabis producers and processers, to provide beverage alcohol and cannabis products in a customer-focused, safe, and responsible manner. As Keating said, “The markets for beverage alcohol and cannabis are continuing to change, but the effort we make with our local business partners across the province to focus on our customers will not.”

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, and for the delivery of programs that promote safe, responsible consumption of alcohol and cannabis.

NLC is one of the largest retailers in the province. Through 29 corporate retail locations, over 140 agency stores, more than 600 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 52 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% 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.