A First Nations leader and 10 New Brunswick-based cannabis businesses are calling on the province to halt the decision-making process to sell Cannabis NB because they fear it will end up in the hands of a single outside company that will stifle the growth of the local industry.
The group, which recently sent a letter to the premier outling its position, says the process to sell the government-owned retailer should be halted until the government consults with First Nations leaders and the companies that make up the province’s multi-million-dollar industry.
The government has been looking to sell Cannabis NB since it issued a request for proposals in 2019 to find a single operator in the private sector to take over the 20 stores. When Cannabis NB began operating in 2018, it lost money but has since become far more profitable.
In an interview with Huddle, Tanner Stewart of Stewart Farms, a co-signer on the letter, says he believes a way forward for the province would be to adopt models used in Ontario and expand retail infrastructure and licensing across the province, allowing private retailers to operate their own stores.
“Ontario is opening almost 30 stores a week right now,” said Stewart. “This government can generate with no investment or by spending any money and they can unleash an economic powerhouse in this province.”
“There’s absolute precedent and proof all through the country how much economic activity this industry is generating.”
The group says the sale process has not been transparent and stakeholders should consulted.
In a statement, Assembly of First Nations Regional Chief Roger Augustine says consultation is essential to evaluate, make judgements, and come to a proper decision.
“An effort to engage the cannabis industry, municipalities, health and safety professionals, the general citizenry, and the First Nations before making a decision on the sale of Cannabis NB should not be too much to ask,” Augustine wrote.
“Citizens of the province should be concerned with this unknown deal and the fact that the government has not involved neither stakeholders nor rightsholders in any form of consultation.”
In the six-page letter addressed to Premier Higgs, the groups say monopolizing the province’s cannabis industry would result in high job losses and have a significant impact on worker’s wages within the province. They say it would forfeit the opportunity to expand the provincial cannabis industry into canna-tourism, cafes, and other distribution models.
“In short,” the letter states “selling Cannabis NB means leaving millions of dollars of economic development potential off the table.”
“We do not object to privatization of aspects of the industry, but have serious concerns about relinquishing total control of a retail environment to a single private sector entity, especially one that may have little to no vested interest in the province of New Brunswick, its people, or local businesses.”
The groups point to examples like the provinces of British Columbia, Alberta, Ontario, and Quebec where maintained full or partial control over their recreational industries have led to success. They say this type of success can also be seen in the current state of Cannabis NB.
“Cannabis NB has frown its financial position from a loss of $16.2M in the first 50 weeks of its operation to third-quarter sales of $19.3-million for the period ending December 27, 2020, a 76 percent increase over the same period the year before with net profits – as of January 13, 2021 – for the fiscal year starting at $7.4-million. This is momentum we feel will be imperilled by a move to a single private retailer which will naturally favour its own financial well-being over the province’s bottom line.”
Stewart says New Brunswick should follow the example of other provinces. British Columbia, Ontario, and Alberta regulations allow both private and public retailers to operate. Manitoba, Newfoundland and Labrador, and Saskatchewan each have stores operated by private retailers with products licensed through their province, with no publicly owned and operated stores.
“The main thing [the government] is missing is basically faith in us as New Brunswickers to turn this industry into a global powerhouse,” said Stewart. “I think they’re missing trust in us New Brunswickers.”
Stewart says that by going from a government-run monopoly to a private monopoly in the province, the industry’s potential will be wasted.
“If it goes that route, it will eliminate hundreds of future jobs for this province, dozens of less entrepreneurs will be able to run businesses in this retail sector and hundreds of millions of dollars in future tax revenues will not be available to New Brunswick as a province if this industry is sold to a single private buyer.”
The letter sent to Premier Higgs was signed by Chief Roger Augustine along with representatives from Best Buds Cannabis Company, Organigram, Zenabis, Stewart Farms, Lady Jane Cannabis, Golden Peak Cannabis, Eco Canadian Organic, New Brunswick Cannabis, Flemming & Singh Cannabis, and the New Brunswick Craft Cannabis Association.