The crown corporation that manages cannabis in New Brunswick, Cannabis NB, announced today a $1.4 million profit from March 30, 2020 – June 28, 2020.
Total sales in the province in that time period were $16.3 million, which is 78.7% increase compared to the same timeframe last year.
The announcement, posted at cannabis-nb.com, notes that the last seven periods have all been profitable for the cannabis retailer, and that earnings before interest, taxes, depreciation, and amortization growth over the past year is $3.5 million. It also noted a decrease in expenses of $1.1 million, likely because of fewer costs associated with the development of the provinces retail system.
The announcement of continuing and increasing profits comes as the new provincial government continues to consider selling off the provincial retailer to a private company, with an announcement possibly later this year after being delayed due to COVID-19.
On November 14, the New Brunswick Government issued a request for proposals (RFP) for a “single private operator” to take over the operation, distribution and sales of recreational cannabis in New Brunswick. A week after that, the province introduced amendments to their provincial regulations to allow the potential change from the current provincially-owned model.
“This was the best way to stop losing money at this point,” Finance Minister Ernie Steeves said earlier this year in regard to the proposal to sell the Crown Corporation.
“We are responsible for the taxpayers’ money, and we have to be prudent with it. This is part of our efforts to energize the private sector, get our financial house in order and maximize the benefits for taxpayers and the government,” the minister said in a government press release.
“After a careful and thorough review of the current business model for the sale of recreational cannabis and an analysis of alternative options, we came to the conclusion that the best approach for New Brunswick taxpayers and government is to turn to the private sector.”
However, Patrick Parent, President and CEO of Cannabis NB, says the organization is showing a significant turnaround now.
“Cannabis NB has made a very positive turnaround to date,” said Parent in the government’s press release. “Starting the fiscal year off with a positive net income growth of over a million dollars is a direct result of aggressive cost cutting measures, renegotiating prices with our suppliers which were passed on to our customers as well the addition of weekly promotions.”
The province does currently list many “promotions” on their website, including several showing price cuts of up to around 25%.
“We continue to diversify the products we carry to offer our customers’ a wide selection at various price points. We are adding new products like topicals, beverages and various concentrates and doing so at a price point that is competitive with the illegal market,” added Parent.
The report also included several “key trends” from the most recent quarter, compared to the first quarter of last year (April 1, 2019 – June 30, 2019):
- Online sales represented 3.3 per cent of sales for the quarter compared to 2.2 per cent last year.
- In store sales represented 96.7 per cent of sales for the quarter compared to 97.8 per cent last year.
- Dried flower sales increased 49.1 per cent, up by $3.8 million.
- Accessories sales increased 62.3 per cent, up by $0.2 million.
- Extracts sales increased 7.1 per cent, up by $0.07 million.
- Seeds sales decreased 42.3 per cent down by $0.008 million.
- Concentrates represented 14.4 per cent, of sales for the quarter at $2.3 million.
- Edibles represented 4.6 per cent of sales for the quarter at $0.8 million.
Featured image via reddit.com