New Brunswick receives 11% of cannabis products ordered from cultivators ‘consistently’

Published February 4, 2019 | By Matt Lamers

(This story has been updated to include a statement from Organigram.)

New Brunswick’s cannabis wholesaler is receiving a fraction of the 352 cannabis products licensed cultivators agreed to supply the province on a regular basis, new data shows.

“In August of 2018, we ordered 352 products; to date we have received 187. Of those 187, we have had consistent inventory for only 39 products,” Cannabis NB spokeswoman Marie-Andree Bolduc told Marijuana Business Daily.

“The other 148 have shipped in varying quantities and at varying frequency.”

Cannabis NB is the government-owned retailer of adult-use cannabis in New Brunswick.

Supply has been an issue since Canada legalized cannabis last October, with the federal government, provincial wholesalers, retailers and licensed producers scaling up resources to meet significant demand in this newly regulated industry. (The federal government recently said there is “sufficient supply to meet and exceed existing demand” and provinces “still have much work to do (to) establish their wholesale and retail distribution systems.”)

New Brunswick says it should receive a minimum of 400 kilograms (880 pounds) of product per week to fully stock store shelves and keep up with customer demand.

However, Cannabis NB said it is receiving only about 105 kilograms per week for its 20 stores.

Ahead of legalization, the province inked memorandums of understanding with licensed producers, including:

“The national supply shortage continues to be our biggest challenge,” Cannabis NB CEO Brian Harriman said. “This impacts not only the quantity of product available but the variety of products that Cannabis NB is able to offer.

“The retail portfolio has been limited since launch and has made it difficult to offer the breadth and variety of products that some customers are looking for.”

Here are some of Cannabis NB’s key sales trends through the end of 2018:

  • Online sales revenue was CA$400,000 ($304,500).
  • In-store revenue was CA$8.2 million.
  • Dry flower sales represented 87% of sales, or CA$7.5 million.
  • Oils and capsules represented 9% of sales, or CA$800,000.
  • Accessories sales accounted for 4%, or CA$300,000.

Hamish Sutherland, CEO of White Sheep, a commercial operator and strategic investor in cannabis assets, said the industry is still learning best practices from those who have been growing legally since 2013.

“The market expected too much, too soon,” he said.

“We are a nascent industry with many excellent professionals who are working with complex environments, economics, legacy infrastructure – repurposed greenhouses – and we are working through the issues as an industry – with safety at the forefront, in partnership with Health Canada,” he said.

“In a few years, all will be forgotten, supply will be resolved, supply chain will be established and retail sales accessible and affordable.”

Organigram said in a statement it is working with partners across the country, including Cannabis NB, to ensure that annual supply obligations are met.

“As a new industry, we recognized well before legalization that this process would likely encounter some challenges, so issues related to supply are not unexpected,” the company said. “They simply require LPs and our partners to continue to collaborate on effective solutions, so that is where our efforts focus at the moment.”

Matt Lamers can be reached at [email protected]

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