Province hopes to have private operator in place by the summer.
The lineup has officially formed for the right to operate New Brunswick recreational cannabis retail, wholesale/distribution and e-commerce.
Eight companies got their applications in for control of the province’s struggling cannabis industry before last Friday’s deadline. They will now be examined by a third-party to ensure fairness, according to CBC.
“We will be diligently reviewing the submissions in order to identify the overall best proposal that focuses on public health, education and safety and offers the best value for the New Brunswick taxpayers,” said Finance and Treasury Board Minister Ernie Steeves.
The companies that have thrown their hats in the ring represent a mix of talent and experience from within the province and across the country. They are Canopy Growth Corporation (Ontario), Fire & Flower Inc. (Alberta), Green Stop Cannabis Ltd. (Nova Scotia), Kiaro Brands Inc. (B.C.-based), Loblaw Companies Limited (Ontario), New Brunswick Association of Cannabis Distributors (New Brunswick), RSL NB (New Brunswick) and YSS Corp. (Alberta).
New Brunswick operates 20 Cannabis NB stores across the province, but it is unclear what will become of them since they were excluded from the provincial offering.
“This is not a sale of the existing business, Cannabis NB, but rather the sale of the rights to operate recreational cannabis retail, wholesale/distribution and e-commerce in the Province of New Brunswick on an exclusive basis over a period of 10 years, with two five-year renewal periods,” noted the province’s request for proposal.
But there’s still plenty to get excited about, said Theo Zunich, president and CEO of YSS Corp. ,who grew up in New Brunswick and is eager to return.
The company currently operates 16 retail stores in Saskatchewan and Alberta. “It’s a great opportunity for us to expand into a new province,” Zunich said Monday. “We’re very confident that this can be a profitable endeavour for the province, that we can capture that black market.”
The province is looking at a number of factors when examining proposals, including experience selling recreational marijuana (and the ability to offer diverse products at competitive prices), a plan to fight off the black market, access to funding and, of course, a strong financial offer for the rights to a potentially lucrative business.
It won’t be easy — applicants will be vying for success in an environment where the province failed miserably. When asked previously why Cannabis NB was unable to reach profitability, Steeves did not hold back. “I think it was a bad business model,” he said, but directed reporters to talk to “the previous government” about the details.
Cannabis NB lost more than $11 million in its first six months of operation. Michael Armstrong, an associate professor at Brock University’s Goodman School of Business in Ontario, said that Cannabis NB could turn a profit with fewer outlets and more competitive prices.
New Brunswick, which currently has 215 full- and part-time employees working at Cannabis NB, expects an agreement on a new retail system to be in place by early July.
Written by David Yasvinski