New Brunswick’s cannabis retail evaluation back on track

The COVID-19 pandemic has impacted New Brunswick’s recreational cannabis retail evaluation, but the process is back on track, a government spokeswoman confirmed to Marijuana Business Daily. 

“We can confirm that the work has resumed,” according to Vicky Deschênes, senior managing director of corporate communications for the province.

“Our interest in exploring alternative retail models for cannabis has not changed.”

New Brunswick, which operates 20 government-run cannabis stores, previously said it anticipates executing an agreement early this summer.

“The RFP process will help us determine if the private sector approach would better position the province to achieve both an enhanced financial return for tax payers, as well as a safe and secure business model that is more agile to compete with the illegal market,” Deschênes said this week.

“The process is flexible in nature.”

However, should negotiations fail, the government reserves the right to walk, instead seeking efficiencies with the current public sector model, or look at alternative models.

Last year, New Brunswick issued a request for proposals (RFP) for a single operator to run a cannabis retail system in the province starting in 2020.

“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,” the RFP document reads.

If a private company is chosen, it will not be required to maintain all 20 stores.

Cannabis NB ended its most recent quarter with a profit of 500,000 Canadian dollars ($352,000) – its first positive quarter.

In its financial results released this week, Cannabis NB reported sales of CA$14.0 million for the 13 week period ending March 29.

That is an increase of 27% over the previous quarter’s CA$11 million.

The only legal retailer of recreational cannabis in the province said the COVID-19 pandemic contributed to higher revenue for the quarter.

“It is estimated that the impact of COVID-19 on sales was during the last two weeks of the quarter was an increase of approximately five per cent,” it said in a press release.

Online revenue represented only 1.4% of Cannabis NB’s sales in the period, up from 1.1% in the quarter ending Dec. 29, 2019.

Concentrates accounted for 12% – or CA$1.7 million – of sales, the first full quarter they were available.

An additional CA$600,000 of edibles were sold, representing 4% of sales.

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected].

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