New Brunswick

Opposition pushes for details on pot prices for New Brunswick

New Brunswick's plan to buy its cannabis from three producers is at risk if a decision isn't made soon about the retail price, Progressive Conservative MLA Kirk MacDonald says, since growers need to be able to plan.

MLA argues Liberals will put public money at risk if they don't finalize details soon

Tory MLA Kirk MacDonald pushed Finance Minister Cathy Rogers to tell a legislative committee Wednesday what recreational cannabis will cost once it’s for sale in government-owned stores next summer. (CBC)

The Progressive Conservative Opposition is speculating that legal cannabis sales in New Brunswick could lead to an Atcon-style financial fiasco.

Progressive Conservative MLA Kirk MacDonald made the comment after trying to get Finance Minister Cathy Rogers to tell a legislative committee what recreational marijuana will cost once it's for sale in government-owned stores next summer.

He said the province's plan to buy its supply from three producers is at risk if there isn't a decision soon about the retail price, which he said the growers need so they can plan ahead.

"If the minister in eight months' time is looking to have stores open and be the premiere purveyor of pot here in N.B., then working backwards, they're soon going to need to know what seeds to put in the ground," he said.

"If this is all going to roll out on July 1, they're soon going to need to know what to plant and what price they're going to get for their crop to determine if they're going to want to plant it at all."

PCs remember Atcon 

One of the suppliers, Zenabis, received $4 million in subsidies for its Atholville plant in 2016. Another producer, Organigram, will get payroll rebates for jobs it creates in its Moncton facility.

MacDonald said the Liberals are putting public money at risk if they don't sort out the details properly.

"This has the potential to make Atcon look like a marijuana seed in the wind, because the numbers are so much larger," he said.

That's a reference to the 2009 bankruptcy of the Miramichi-based Atcon group of companies, a collapse that cost taxpayers $70 million in lost loans and loan guarantees.

Minister won't rush process

Rogers says the process of creating a regulated market for recreational marijuana is complicated and can't be rushed. (CBC)

Finance Minister Cathy Rogers said MacDonald raised "a number of good points" but that creating a regulated market for a newly legalized product from scratch is complicated and can't be rushed.

The government has five bills before the legislature to regulate legal cannabis. Rogers was taking questions on one of them, to create a new company to oversee the retail stores, during a committee session Wednesday.

"There are a number of things being worked on," she said. "This is a new area. It's a new regulated market. … That is why we're trying to be very, very careful. It's why we don't have contracts immediately."

So far, the government only has memorandums of understanding with the three suppliers, with no fixed price.

"We've moving forward to have a legislative environment for New Brunswick to be ready to enter into more formal contracts," Rogers said.

Companies release own estimates 

The three companies themselves estimated in the fall what its supply would be worth.

Zenabis says it will sell the province four million grams with a retail value of $40 million to $50 million, Canopy Growth expects to see four million grams worth $40 million, and Organigram will supply five million grams worth $40 million to $60 million.

MacDonald says that works out to between $9.20 and $11.54 per gram.

He said based on testimony at consultations that a committee of MLAs held over the summer, a gram can cost $3.75 on the illegal market in New Brunswick.

That calls into question whether someone will be willing to pay a far higher price for government-sold legal marijuana, he said.

But Rogers said MacDonald's numbers amounted to guesswork.

"The member, I would say, is incorrect in the assumptions regarding price because that price has not been set," she said.

The figures from the three suppliers were only estimates, she said, and it's not clear yet how federal legislation, including a proposed $1-per-gram tax, will affect the price.

"It doesn't matter what numbers are thrown out there," Rogers said. "We can't say what it includes and doesn't include."

A study for the federal government in 2013 put the average price of a gram of marijuana in New Brunswick at $6.38, the second-lowest in Canada after Quebec.

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