New Brunswick

Province won't face penalty for backing out of Cannabis NB deal, Higgs says

The New Brunswick government has cancelled plans to sell Cannabis NB, the Crown agency that got off to a shaky start but has done much better during the pandemic.

Progressive Conservative government drops plan to turn cannabis operations over to private sector

Cannabis NB has posted four consecutive profitable quarters and expects to exceed $10 million in profit for the year, according to a spokesperson for the Crown agency. (Elizabeth Fraser/CBC)

Cannabis NB will not be sold and the provincial government won't face any penalties for backing out of negotiations, said Premier Blaine Higgs.

Speaking to reporters at the legislature on Friday, Higgs said the decision to no longer sell the Crown corporation was made following a negotiation process that was done independently of him or any of his cabinet colleagues.

"This process was a very independent one," he said.

"So we just in the last week or so got to know, kind of OK, what were the options? And then we had the discussion with the team and... the decision was that we would maintain the status quo."

New Brunswick Premier Blaine Higgs speaks to reporters at the legislature on Friday, March 19, 2021, about his government's decision to not sell Cannabis NB to a private company. (Ed Hunter/CBC)

According to a news release Friday, the government received eight responses by the Jan. 10, 2020, submission deadline for proposals to take over its cannabis operations.

This winter, the government has been in final negotiations with one company.

"While we were pleased with the level of interest and engagement from the private sector, Cannabis NB's performance over the past few months, as well as careful consideration of the social and economic implications of the retail model, has given us confidence that New Brunswick taxpayers and consumers can be well served through continued improvements within the current model," said Finance Minister Ernie Steeves, in the release.

The decision comes after Cannabis NB turned quarterly losses in its first year of business into quarterly profits over the last year.

It also follows several groups and opposition parties voicing objection to the sale, a process that got underway with a request for proposals in November 2019.

'We told them so,' says Liberal leader

Liberal Leader Roger Melanson said his party has been trying to tell Higgs that like any business, Cannabis NB just needed some time after opening before the profits began rolling in.

"We told them so," said Melanson, speaking to reporters at the legislature Friday.

When the possibility of privatization was raised in November 2019, Cannabis NB was losing money. Since then, however, the agency has posted four consecutive profitable quarters and expects to bring in more than $10 million of profit for the year, Cannabis NB spokesperson Thomas Tremblay said in February.

"Thank God that the premier came to his senses and understood the benefits of having Cannabis NB as a Crown corporation," Melanson said. "Not only from from an operations point of view and generating revenues that can go into into social programs that's needed, but also from a regulations point of view where it is safer."

Sell — just not to single buyer, Austin says

People's Alliance Leader Kris Austin agrees with the government's decision to cancel the sale, but only because it was to a single buyer. 

He never wanted to see "one company holding a monopoly on marijuana sales in this province," Austin said.

"When the government first announced its plans to allow one private company to sell cannabis in this province, I objected to this plan because I knew it would only serve to benefit the company which was awarded the contract and would do little to deter black market cannabis sales," he said in a news release sent out Friday morning after the government announcement. 

He believes sales should be done through the free market and independent retailers.

That way, he said, the province would make money from the provincial sales tax while maintaining oversight through regulation, without the overhead of operating retail stores.

"I am once again calling on the government to send Cannabis NB to the private sector and issue licences through a free-market model to a variety of independent retailers," Austin said. "It's time to get government out of the retail business and end the monopoly of  cannabis sales."


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