New Brunswick will not privatize recreational cannabis

Published Mar 29, 2021 12:00 p.m. ET
iStock / ronniechua

Premier Blaine Higgs has halted the province's recreational pot shops switch to private ownership. He will maintain the government NB model for marijuana sales to continue across the province of NB. The interest in privatizing recreational pot shops in NB was proposed in November 2019. The government put out feelers for private companies interested in taking over the provincially owned Crown corporation. Ever wonder what happened?

Due to privacy concerns, the government cannot publish who the top companies were to come back with proposals. However, it is understood that eight companies, including Canopy Growth and Loblaw Companies Ltd., were among the top contenders. After Premier Higgs was involved in discussion with the top competitors, it was deemed that the province would stay with the Cannabis NB model.

According to the Premier, continuing the retail model's economic and social implications boosts the confidence of serving the NB taxpayers. According to Finance Minister Ernie Steeves, the current NB model's continued improvements show validity for the support.

There’s money in it

When the province first looked at privatization, the government-run business was not profitable. Since then, things have changed. The pandemic has also added to the government's thought change by exposing a scrambled economic path for the cannabis industry. According to the Cities of New Brunswick Association president, the Crown corporations are now profitable recreational dispensaries.

The crown corporation lost revenue in the first six months of operation after its launch in 2018.  Twelve million dollars was the recorded amount of loss for that period. However, Finance Minister Ernie Stevens saw the improvement of sales from following the NB model. Recently sales from Cannabis NB have been reported around the 19 million dollar mark for the last quarter of 2020. This represents a profit of 2.8 million green dollars and a 76 percent increase.

By overcoming the early supply shortages and uncompetitive prices, the Crown corporation is now reaping the benefits of a profitable future. The NB provincial marijuana laws state that an adult's only option to purchase legal weed is through Cannabis NB, an NB Liquor Corporation subsidiary.  It appears as if alcohol and weed are guided by the same head, the NB government.

There are currently 20 licensed retail stores opened across the province of NB. To enable a further spread of availability of cannabis in NB, a website has been set up for adults who are of age to purchase cannabis products online.

Final words

It’s 2021, and there has been no opening for the private sector to be part of the green cannabis industry in NB. The provincially owned weed shops in NB have made a considerable green profit of 2.8 million Canadian dollars in the last quarter of last year. Online sales only accounted for 1.6 percent of the revenue in this quarter.

So, suppose we believe Cheryl Hansen, the deputy minister of finance and clerk of the executive council. In that case, the NB government is in the final stages of negotiations to privatize the cannabis industry in NB. But alcohol and weed or Cannabis NB, the subsidiary of NB Liquor, could at any time pull out of the talks, according to the NB senior civil servant.

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