These Two Cannabis Producers Will Supply New Brunswick's Recreational Marijuana Market

The government of New Brunswick, Canada has just pulled off the biggest legal recreational marijuana deal in history. Earlier today, the small maritime province announced that it has secured 9 million grams of marijuana to supply the recreational market when it opens for business next summer, when the federal government repeals cannabis prohibition across the country.

"Having reporters here to talk about one of the biggest drug deals in history is pretty exciting," Mark Zekulin, President of Canopy Growth, joked during a press conference in Moncton, New Brunswick. "Today is a historic day for cannabis and for Canada... And I also want to commend Premier Gallant for his leadership on the cannabis file and for recognizing that our industry is making meaningful economic contributions to communities across the country. In a few short years, this has become a world-class industry."

Canopy — a licensed producer (LP) based in Smith Falls, Ontario with a new site opening soon in Fredericton — is the largest legal marijuana producer in Canada. Now they are teaming up with Organigam, an LP based in Moncton, to supply the recreational market for New Brunswick. This is the first time that a province has made an agreement of this kind with cannabis suppliers. 

Supply is key to the success of legalization. Prime Minister Justin Trudeau began the process of repealing cannabis prohibition in Canada with the intention of cutting the black market out of cannabis sales and keeping marijuana away from kids. Ensuring a healthy supply will help New Brunswick achieve those goals, according to Finance Minister Cathy Rogers. During today's press conference, she said that without adequate supply, the province "might not achieve our goal of getting the product out of the hands of criminals and children."

So Organigram will contribute 5000 kilograms of cannabis while Canopy chips in another 4000 kgs. And both stress that their contributions won't be at the expense of serving their primary customers.

"We made a commitment some time ago that we would prioritize our patients over any potential recreational market," Zekulin of Canopy said. "But thankfully there is enough supply to go around to meet the needs of patients and the needs of New Brunswick as well."

"From an Organigram perspective, it's the same," Engel added. "Our top priority is our medical patients. But then we look at New Brunswick as our second priority."

And a third priority is keeping those communities safe. That's why both Canopy and Organigram have agreed to take two percent of their recreational sales from retail operators and contribute it toward provincial campaigns to educate the public about cannabis use.

The only lingering question following the press conference is who those retailers will be. Minister Rogers says that the issue will be decided by a new crown corporation tasked with figuring out the details of the retail market in the coming months. But we should expect the new regime to be tightly regulated and restricted.

"We need to get this right from the outset," Minister Rogers said, adding that studying other markets has taught them that it is "best to start with a tight model, with a crown corporation model so we get direct influence on all of the details, like advertising, location and other details that deal with this issue. This is uncharted territory. Experience will teach us where we want to go from there."

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