On a Saturday afternoon midway through January, it’s about -20 C, and one of Saint John, N.B.’s unlicensed cannabis shops has a huge lineup that almost spills out of the door. 

Down the road, the licensed Cannabis N.B. store has a near-empty parking lot. After a $16.2 million loss in its first 50 weeks, something needs to change. That’s why New Brunswick’s government put out a request for proposals in November with the hope that a private company will take over. Eight companies responded to the call: Canopy Growth; Loblaw Companies; Fire & Flower; Green Stop Cannabis; Kiaro Brands; New Brunswick Association of Cannabis Distributors; RSL NB, and YSS Corp.

The government will evaluate the submissions and choose a winner based on criteria outlined in the RFP — the company with a strong financial offer and which demonstrates knowledge of the business; will make local partnerships with entrepreneurs and First Nations, and who can compete with the unregulated market. Then, the winner will negotiate a deal with the government. No announcement has been made regarding any public consultations, and government reps aren’t saying if that’s part of the plan.

“In the coming weeks, the proposals will be evaluated through an open, fair and accountable process overseen by a third-party fairness monitor,” said finance minister Ernie Steeves in a statement. “The process is flexible in nature, both from government’s and the proponent’s perspectives. Should the negotiations fail, government can walk about and continue to seek efficiencies with the current public sector model or look to another private sector model.”

That’s not to say the public has no concerns. Cannabis consumers and business experts alike say that to turn regulated cannabis sales into a viable market in the province, the cost of products will have to go down considerably. Dr. Devashis Mitra is the dean of the faculty of management at the University of New Brunswick, Fredericton. He says the government’s eagerness to make money was a major part of why Cannabis N.B. failed. 

“Cannabis N.B. priced their products too high,” he says. “The other issue is whether they were creating the products consumers wanted.” 

Fredricton resident Jaden Fitzherbert, 30, says so far, she’s been unimpressed with the government’s efforts.

“Why would I go to Cannabis NB to buy expensive subpar weed when I could just as easily go to the person that I’ve always been going to?” she says. “I know their prices, I trust their quality.”

Cannabis NB opened 20 stores across the province when recreational pot was legalized by the federal government. Photo: Twitter

Jeff Keleher, 35, is another regular consumer living in Saint John, and he says the products don’t speak to him, either.

“I can’t participate under the current laws because I use edibles mostly. Cannabis N.B. is charging eight times the actual market price for these things.” 

Some, like Dr. Anindya Sen, an economics professor at the University of Waterloo, say under the current model, the government never had a chance.

“The government should never have been in the business,” Sen says. He says the government’s initial 20 stores were too many, creating a high overhead cost. Further, the prices are the highest in the country, according to Stats Canada data. Sen says with another monopolist, the risk remains that government-regulated weed still won’t be able to compete with the illegal market’s offerings.

“Right now, it feels like a prison,” says customer Jeff Keleher

“Why would you want to have a monopolist? Why would government not auction off the stores they have, get some returns from that, and people who want to buy the stores can open up the market? I don’t understand why governments across Canada are veering away from competitive markets.” Competition, he says, is required to create innovation and diversity of product. 

Potential customers also have qualms with the level of security around cannabis sales in the province. To enter a Cannabis N.B. shop, one has to navigate through an outer vestibule and present ID. Then, after being buzzed through a locked door and into a small waiting room, customers wait until a staff member is ready to let you in. They’re buzzed in again, through another locked door. All of the product is behind locked glass cases, and as people shop, a staff member prompts even the most knowledgeable customers basic questions, like whether they like indica or sativa. 

“Maybe it could be like the liquor store, and if you look like you’re over 19 because you’re 35, they can just give you the product,” Keleher suggests. “Right now, it feels like a prison.” 

Mitra says both consumers and the province could benefit under privatization. If the successful bidder partners with other, smaller entities, he says, it might have a better chance of selling what people are looking for at a price they’re willing to pay. If something like this happens and the demand for cannabis is stabilized, the government could see higher tax revenue without the added pressure of being its retailer as well. 

In order to quash competition, though, Mitra says the model needs to change. Both he and finance minister Ernie Steeves said, reports CBC, that it would be easier to make changes under private sector ownership.

Steeves said in a statement that a new operator could be announced by spring, and a new model in place by the fall of 2020.

“Whoever takes over,” Mitra says, “they will hopefully learn from the government’s experiences and try not to repeat the mistakes made by Cannabis N.B.”