Crown to over­see mar­i­juana sales

Gov­ern­ment signs deals with two sup­pli­ers to se­cure sup­ply for mar­ket

Journal Pioneer - - ATLANTIC - BY KEVIN BISSETT With files from Ross Marowits

The New Brunswick gov­ern­ment has cre­ated a new Crown cor­po­ra­tion to over­see the sale of recre­ational mar­i­juana, and signed deals with two sup­pli­ers. Fi­nance Min­is­ter Cathy Rogers said Fri­day the deals with Or­gan­i­gram and Canopy Growth Corp. se­cure a sup­ply for the New Brunswick mar­ket in time for the July 2018 launch. The fed­eral gov­ern­ment has in­tro­duced leg­is­la­tion to le­gal­ize recre­ational weed by July 1, but left dis­tri­bu­tion and reg­u­la­tion to the prov­inces.

On­tario was the first out of the gate, an­nounc­ing a de­tailed plan last week that would re­strict sales to res­i­dents 19 and older from as many as 150 ded­i­cated stores run by the prov­ince’s liquor con­trol board or through the In­ter­net.

A New Brunswick leg­is­la­ture com­mit­tee rec­om­mended sell­ing mar­i­juana through gov­ern­ment-op­er­ated stores to any­one 19 years or older, but Rogers said the gov­ern­ment has yet to make a fi­nal de­ci­sion on a re­tail model.

“The cre­ation of this new provin­cial Crown cor­po­ra­tion pro­vides the flex­i­bil­ity and lays the ground­work for the even­tual

re­tail model once fi­nal de­ci­sions around that have been made,” she said.

Rogers said the Crown cor­po­ra­tion will not di­rectly con­duct re­tail oper­a­tions, but will even­tu­ally work with an­other en­tity or en­ti­ties to pro­vide that frame­work.

Said Health Min­is­ter Benoit Bourque: “Your gov­ern­ment is com­mit­ted to en­sur­ing a seam­less ap­proach to the le­gal­iza­tion of recre­ational cannabis, an ap­proach that will pri­or­i­tize pub­lic health and safety con­cerns.”

Monc­ton-based Or­gan­i­gram said it signed an agree­ment Thurs­day to al­lo­cate about a quar­ter of its pro­duc­tion - or a min­i­mum of five mil­lion grams per year - to the prov­ince’s adult recre­ational mar­ket.

The re­tail value of Or­gan­i­gram’s sup­ply deal for recre­ational cannabis is es­ti­mated at be­tween $40 mil­lion and $60 mil­lion a year, it said in a news re­lease. Mean­while, Canada’s largest li­censed cannabis pro­ducer, Canopy Growth Corp. (TSX: WEED) of On­tario, said it had also signed a sup­ply me­moran­dum of un­der­stand­ing for cannabis prod­ucts with New Brunswick.

Canopy es­ti­mated that the two-year sup­ply agree­ment, in­clud­ing four mil­lion grams of cannabis and cannabis de­riv­a­tive prod­ucts for the first year, is ex­pected to have an es­ti­mated re­tail value of $40 mil­lion in its first year.

“New Brunswick has led the coun­try in its ef­forts to at­tract cannabis jobs and in­vest­ment and Canopy Growth is proud to be uti­liz­ing lo­cal trades and to hire in New Brunswick for the site we are es­tab­lish­ing in Fred­er­ic­ton,” said Mark Zek­ilin, pres­i­dent of Canopy Growth.

A Deloitte re­port last fall sug­gested recre­ational mar­i­juana could be worth about $22.6 bil­lion to the Canadian econ­omy. The New Brunswick gov­ern­ment an­nounced in March it has made weed part of its eco­nomic strat­egy, and plans to “build a ‘best-in-class’ hub of in­fra­struc­ture and re­search clus­ters to at­tract new in­vest­ment” in mar­i­juana. It is giv­ing pro­duc­ers fi­nan­cial in­cen­tives and de­vel­oped a com­mu­nity col­lege pro­gram for cannabis tech­ni­cians.

CP PHOTO

Grow­ing cannabis plants in­tended for the med­i­cal mar­i­juana mar­ket are shown at Or­gan­i­Gram in Monc­ton, N.B.

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