Nfld. & Labrador

AG to investigate N.L. marijuana industry — including Canopy Growth deal

Newfoundland and Labrador's auditor general plans to take a broad look at the players and policy connected to legal cannabis in this province.

Auditor general Julia Mullaley says the time frame is not yet set

Julia Mullaley, the auditor general, says the weed industry is worth looking into. (Eddy Kennedy/CBC)

After months of questions and controversy over the province's legal cannabis deals, the auditor general is planning to take a broad look at the players and policy involved in the industry.

"I think it's just really an important public policy issue," Julia Mullaley said about her decision to investigate.

Her office will review systems, regulations, contracts and compliance mechanisms associated with the legalization of cannabis.

Exact investigation parameters  — and a time frame — haven't been set yet, but the $40 million dollar supply contract awarded to Ontario-based Canopy Growth will be looked into.

"The fact that there were some concerns around a particular contract — those are things we can look at once we actually undertake the work — but I think it's the broader aspects of the public policy side that would be important for us," Mullaley said Wednesday. 

Seven and a half months after legalization and five-and-a-half after the PCs called for an investigation, the auditor general in Newfoundland and Labrador is looking into the province's cannabis industry. (CBC)

The Progressive Conservatives raised suspicion around the Canopy contract during the last few sittings of the House of Assembly and requested the auditor general investigate. The party repeatedly used its time in question period to ask the Liberal government why it was investing in an industry that had the potential to make handsome profits without a break on remittances.

We do not have access into private companies, only their particular dealings with government.- Julia Mullaley

The Tories also concentrated on the owners of a numbered company leasing a production facility site to Canopy at significant cost, making the accusation that friends of Premier Dwight Ball's Liberals were benefiting.

Ball and his caucus, now in a minority government, said the $40 million dollar contract was crucial to ensuring a marijuana supply in time for legalization and that the party doesn't know who's behind the numbered company because that information isn't publicly available as per legislation.

Auditor general's authority

Mullaley said she'll investigate the selection process for all cannabis companies with government dealings.

But, she said, her report won't reveal the owners of the numbered company as the landlords work with Canopy directly — not the province.

Construction on the production facility being leased to Canopy Growth is expected to be completed sometime this year. (Katie Breen/CBC)

"From our legislation point of view, we have, certainly, access to all government records in any of the departments and any of the crown agencies, and as companies do business with government, we certainly have an ability to look at the various contracts and any money flowing to companies," said Mullaley.

"We do not have access into private companies, only their particular dealings with government."   

Why weed?

The auditor general's office works independently and chooses which public sector matters to investigate.

Suspicion around one deal, Mullaley said, isn't why she chose to look into the industry.

Jeff Ryan, left, a vice-president with Canopy Growth and Christopher Mitchelmore, minister of business, break ground on the site of the production facility in St. John's in May 2018. (Terry Roberts/CBC)

Her job is to keep the province financially accountable and improve government's overall effectiveness. She said the uncharted territory of a new and sizable industry is worth reviewing to ensure everything is running efficiently.

Mullaley hasn't committed to a time frame for the cannabis investigation but says she'll be adding it to the list.

She is already expecting to put one report out this month and said there are a number of others in the works.

"All I can tell you is that it is something that I think is a really important area of work, so we will be looking at that, as resources become available."

Read more from CBC Newfoundland and Labrador

About the Author

Katie Breen

Reporter

Katie Breen works for CBC in St. John's.

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