In ‘historic’ deal, New Brunswick to buy CA$100 million of cannabis

New Brunswick entered into separate agreements with two of Canada’s largest licensed producers to buy 9,000 kilograms of cannabis per year worth 100 million Canadian dollars ($82 million) to meet demand for its recreational market when adult-use marijuana is legalized next summer.

The groundbreaking deals could be a harbinger of things to come for Canadian provinces choosing a monopoly model to retail recreational cannabis in their legalized markets.

Organigram, based in New Brunswick, said in a news release it will supply at least 5,000 kilograms of cannabis per year. The cannabis is estimated to have a retail value of about CA$50 million and represents about a quarter of the company’s anticipated production.

Smiths Falls-based Canopy Growth, meanwhile, agreed to allocate 4,000 kilograms of cannabis to New Brunswick’s recreational market for an estimated annual retail value of CA$40 million.

In a news release, the company said the deal – which it called “historic” – won’t affect its ability to fill medical marijuana prescriptions.

New Brunswick’s recreational cannabis blueprint could be released later today, and is expected to involve a government-run monopoly, leaving licensed producers out of distribution and making them strictly wholesalers. Ontario, Quebec and Prince Edward Island have all either announced or are leaning towards a similar government system.

Organigram, traded on the TSX Venture Exchange under the symbol OGI, was up 10% Friday morning. Canopy, traded on the TSX Exchange under the symbol WEED, was up about 1.5%.

To sign up for our weekly Canada marijuana business newsletter, click here.

Daily News | Briefs | Canada Marijuana News | Cultivation

 3 Comments

  1. johnny September 15, 2017
  2. Don September 15, 2017
  3. Tito September 18, 2017

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note: Comments are moderated by our editors who do their best to approve comments ASAP. As Marijuana Business Daily is focused on business, we approve comments that are specifically relevant to industry professionals. General opinions and questions about cannabis may not be posted.