Decision on Cannabis NB's future could be made by end of day
SAINT JOHN, N.B. -- A long-awaited decision about the future of Cannabis NB could be made by the end of Thursday.
A discussion about the potential privatization of Cannabis NB will be a top priority at Thursday's cabinet meeting, according to Finance Minister Ernie Steeves.
"I would suggest that shortly after that you'll get a sense of what's happening," said Steeves while presenting Tuesday's provincial budget.
In an interview with CTV's Steve Murphy on Tuesday, Steeves said it was his own personal preference to privatize Cannabis NB.
"This is the kind of decision that you can only make once," said Brad Poulos, an instructor at Ryerson University's Ted Rogers School of Management. "So you've got to get it right."
This week, two separate letters were set to the Higgs government asking for a pause on any decision being made about Cannabis NB's future.
"The thing that is most bothersome about this whole process is that this is the sale of an entire industry, the whole retail model and distribution model, but nobody within our industry was consulted as to whether this would be good for New Brunswick or not," said Tanner Stewart, founder of cannabis producer Tanner Farms in St. Stephen, N.B.
In its first year of operation, Cannabis NB posted a financial loss of $11.7 million, prompting the PC government to makes moved toward privatizing the Crown corporation.
STARTED MAKING A PROFIT AFTER FIRST-YEAR LOSSES
Earlier this year, Cannabis NB reported sales of $19.3 million for the third quarter of 2020, which was 76 per cent higher than the same quarter in 2019. Cannabis NB's acting president and CEO Lori Stickles said she anticipated ending the fiscal year with a profit of $10 million.
"Cannabis NB has finally figured out how to make it more affordable while turning a profit, and they're doing really well with it," said Jessica Hope, a New Brunswick-based cannabis industry writer.
That profit may be the best incentive to privatize now, according to Poulos, while the corporation is most attractive to the private sector.
"In my view the government doesn't really have any role selling anything to anybody," he said.
The then governing Liberals chose a public operating model about a year before cannabis became legal, Feb. 17, 2018.
'BIT OF A CONFLICT OF INTEREST'
"Crown corporations can put governments in a bit of a conflict of interest," said Tom Bateman, a political scientist at St. Thomas University, noting the provincial government's stated goals of educating citizens about cannabis health risks.
"Yet it wants to sell lots of it because that's what produces revenue," said Bateman. "So the way out of it, I think, is for government to get out of the business of owning cannabis distribution outlets."
In November 2019, the PC government issued a call for private proposals to take over Cannabis NB. In January 2020, the province said it had received proposals from eight companies.
Previously, the provincial government said it would make a decision on Cannabis NB's future before the end of 2020, then the end of February.