New Brunswick

Cannabis sales in New Brunswick fall far short of expectations — and other provinces

Cannabis NB is on track to miss its own projections for the first half-year of legal recreational cannabis sales by as much as 50 per cent.

New Brunswick sales per capita are lowest of all Atlantic provinces

Cannabis NB sales between Oct. 17 and Dec. 23 totalled $8.6 million, according to unaudited results released Friday. (Julia Wright / CBC)

Cannabis NB is on track to miss its own projections for the first half-year of legal recreational cannabis sales by as much as 50 per cent.

The Crown corporation's sales between Oct. 17 and Dec. 23 totalled $8.6 million, according to unaudited results released Friday.

Online sales revenues totalled just $400,000, while in-store sales revenues amounted to $8.2 million.

In the months leading up to legalization, projections were for sales of $272,700 per day over the first 165 days — a total of $45 million by March 30.   

Supply issues have have a 'significant impact' on sales, according to general manager Lara Wood, 'not only in terms of the volume of product that we can access, but the breadth of product and the portfolio.' (Julia Wright / CBC)

But actual results have been less than half of that — sales of just $126,500 per day as of Dec. 23 — the first 68 days of operations.   

The financial results have been uniquely poor in New Brunswick, a report from Statistics Canada suggests. 

On Wednesday, Statistics Canada reported sales over a shorter period — between Oct. 17 and Nov. 30 — totalled $5.2 million in New Brunswick, or about  $6.76 per resident, over those two months. 

Those are the lowest sales recorded in Atlantic Canada by a wide margin, 40 per cent less than per capita sales in Nova Scotia ($11.21) over the same period and 50 per cent lower than per capita sales in PEI ($13.59).

Not profitable this year

Cannabis NB's figures for its first 68 days in business include the first two days of operations, when a curious public bought nearly $1 million worth of product over 48 hours.

They also include most of the Christmas shopping season — a traditional high point for all retailers, including NB Liquor, of which Cannabis NB is a subsidiary.

In October, CEO Brian Harriman said achieving projected sales targets would only allow Cannabis NB to break even in its first year.  

Cannabis NB CEO Brian Harriman predicted in October the Crown corporation would see sales of $45 million between Oct. 17 and March 30, its first corporate year. (CBC)

"We're looking at around $45 million in the first year — the first corporate year so between Oct. 17 and March 30 …  we may break even, we may be slightly negative on a profit and loss perspective," Harriman said.

But with sales 54 per cent below projections so far, Cannabis NB general manager Lara Wood declined to comment on how much money the Crown corporation is losing.

"It's not realistic that we'll be profitable this year, but we do anticipate being profitable next year," Wood said.

'Multiple issues'

Dried bud was the most popular product, according to Cannabis NB, representing 87 per cent of total sales.

Oils and capsule sales brought in $800,000, while accessories — like vaporizers, pipes, grinders, and papers - amounted to just $300,000.

Expenses for its board of directors and CEO amounted to $19,291.

The provincial cannabis authority has been plagued by unanticipated supply problems.

Customers searching for products like Liiv Kinky Kush, pictured, might be disappointed. Dozens of cannabis products listed on Cannabis NB's website are sold out in all retail locations. (Cannabis NB)

"There are multiple issues that are causing difficulties in getting product into the store," Wood said, including the time involved in manually applying excise stamps, packaging equipment that can't be automated, and lab-testing times.  

Dozens of products remain sold out and unavailable at any of the 20 retail locations across the province.

Sales 'significantly' affected

The supply issues have had a "significant impact" on sales, Wood said, "not only in terms of the volume of product that we can access, but the breadth of product and the portfolio."

"Certainly there has been frustration with the supply issues," she said.

When customers come into the stores "they are looking for specific products, so there is lost opportunity there."

Sales of accessories such as the vaporizers, pipes, grinders and papers pictured here on a Cannabis NB store shelf in Fredericton amounted to just $300,000. (Maria Jose Burgos/CBC)

"What we also have seen is that when we have products, especially specific products, they are moving through really quickly and there is a strong demand for them," she said.

It's difficult to say what the supply problems have cost, Wood said, "because we don't have a normal supply situation to compare to, because everything is so new."

"The national supply shortage continues to be our biggest challenge," Harriman said in a release, adding that supply is "slowly moving in a positive direction."

Layoffs, decreased security

Earlier this month, Cannabis NB announced it had laid off about 60 workers across the province.

Workers, according to Harriman, each received about 100 hours of training before starting work  in the stores.

There were long lineups on Day 1 of recreational cannabis sales in Rothesay, but crowds subsided significantly in the ensuing weeks and months. The corporation has cancelled its third-party, temporary security contract. (Julia Wright / CBC)

Cannabis NB has also cancelled its third-party, temporary security contract.

"We were trying to understand if we did need a security presence in the stores," Wood said, "always with the understanding that we would evaluate it as we went."

The majority of laid-off employees were on seasonal contracts, but some part-time and full-time employees were also affected.

Part of the letter Cananbis NB retail workers received advising them that their employment would be terminated. (Submitted)

"At the beginning, to try to manage that expectation, we did bring in a lot of people on contract," Wood said.

"Certainly, if the scenario had been different, we would love to have kept those people on. They are all people that we would welcome back into the organization if things changed."

Still, Harriman said in a release, "we are pleased with how the stores and the experience have been received by customers as we enter in a new legalized channel of retail."

"The feedback we have received from customers about the education and the experience at Cannabis NB has been largely positive."

Despite that, sales have fallen far short of anticipated targets, Wood agreed.

"I'm glad that $8.6 million isn't in the black market," she said.



 

About the Author

Julia Wright

Information Morning Saint John host

Julia Wright is a lifelong Saint Johner and the host of Information Morning Saint John. She has been with the CBC since 2016.

With files from Robert Jones

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