New Brunswick signs multi-million dollar deal with licensed cannabis producers

Policy makers in New Brunswick have struck a deal with two licensed producers to supply the province’s recreational market once cannabis is legalized.

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Policy makers in New Brunswick have struck a deal with two licensed producers to supply the province’s recreational market once cannabis is legalized.

The first, Organigram, operates out of Moncton, and said in a news release that it will ‘allocate approximately 25 percent of anticipated production to support the adult recreational market in New Brunswick.’

Organigram has committed to supplying New Brunswick with a minimum of 5 million grams per year, with an estimated retail value of $40 million to $60 million per year.

Canopy Growth Corporation based out of Smith Falls, Ontario signed a two-year deal with the province, and said it will supply another 4 million grams of cannabis and derivative products in the first year. The parent company of brands including Tweed, Mettrum, and Bedrocan is currently constructing a new facility in Fredericton.

‘Today we take the next step towards the future of cannabis in New Brunswick with a truly historic MOU [memorandum of understanding],’ said Canopy Growth President Mark Zekulin in a press release.

Finance Minister Cathy Rogers said MOUs with the two companies will ensure that cannabis will be ready for the retail market by July 1, 2018.

While the province did not provide details on plans for distribution, it did announce that it will create a separate Crown corporation to oversee the retail sale of legalized recreational cannabis.

This comes after a legislature committee recommended, among other things, that cannabis be sold through government-operated retail storefronts. Rogers said the corporation will work with ‘another entity’ to carry out the actual sale of the product, adding that policy makers have yet to decide on the final model.

‘This new crown corporation will ensure that health and safety remain the top priority,’ said Health Minister Benoit Bourque.

During a question period, it was clarified that other producers will likely be added to the supply chain in the future.

Both Organigram and Canopy Growth have said this new commitment will not cut into their medical supply for Canadian patients. (In January, Organigram was forced to recall nearly a year’s worth of cannabis after tests conducted by Health Canada showed that it contained banned pesticides.)

The news comes one week after the province of Ontario announced that it would create a provincial cannabis control board and erect 150 government-run storefronts by 2020, while eliminating all existing cannabis dispensaries in the province.

While the B.C. government has yet to make any significant announcements, John Horgan recently lauded dispensaries for proving ‘to be an effective way of attracting attention’.

Finance Minister Mike Farnworth, on the other hand, recently told the Straight that if existing dispensaries would be allowed to participate in distribution in B.C., they would have to undergo significant changes.

“They’ve got a model that works right now but there is now a law of the land, a federal model with which the province has to operate under,’ he said.

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