Cannabis legalization hasn't hurt the black market in N.B.
FREDERICTON -- If the legalization of cannabis was supposed to hurt the black market, the new head of Cannabis New Brunswick says it hasn't happened.
In fact, he believes more illegal dispensaries have opened up in the province, and that's curtailing the province's profits from cannabis.
Patrick Parent has been on the job for just over two months, but says the province won't be making money off cannabis this year.
"At this point, I do not see ourselves being profitable this year, however, we have made improvements," said Parent, the CEO and president of Cannabis NB and NB Liquor.
Parent faced a committee of MLAs Tuesday, answering often pointed questions about the Crown corporation's disappointing record one year after legalization.
So far, Cannabis NB has taken on a $16-million loss.
Parent blames the black market and says he's not seeing any evidence that dealers are being hurt by legalization.
"The illegal market is growing," said Parent. "We are made aware of dispensaries on a weekly basis."
Progressive Conservative MLA Stewart Fairgrieve says the province needs more information.
"We need to understand the extent of illegal selling," says Fairgrieve. "We really don't have a measurement of the black market, better understanding perhaps of the grey market, we don't know what's coming into New Brunswick online from other jurisdictions. I think there are just a lot of uncertainties there that I would feel more comfortable if we had answers."
Staff have been cut, operational efficiencies put in place, and prices slashed to be more competitive with illegal dispensaries.
"It's about price," said Liberal MLA Andrew Harvey. "So Cannabis New Brunswick is negotiating with their suppliers now on better price so they can lower the price, so that hopefully more people will buy at a cannabis retail store versus the black market. That's part of it."
There's also concern the buildings are weighing down the Crown corporation.
Most of the 20 storefronts are under 15-year lease contracts. If those contracts were paid out today, it would cost in the range of $44 million.
"Nova Scotia has made a small profit," Parent said. "It is not the norm across the country. I think you see multiple different models, whether it's Ontario, Quebec or ourselves, (it's) very different and we all have our fair deal of struggles."
Parent does say there will be no more staffing cuts or store closures for now.
The hope is that edibles will be on shelves in time for Christmas.