Nova Scotia elected a new Progressive Conservative government into power on August 17, run by their new Premier Tim Houston. Houston’s party replaced the Liberal government of Ian Rankin, the first Progressive Conservative government the province has seen since 2009.
While Nova Scotia has established a publicly-run cannabis retail system in the province, NSLC Cannabis, Houston has said in the past he feels the best model for the province is a privately run distribution system, with private retail franchises.
At the time the province was establishing their own cannabis regulations in 2018, Houston, then Leader of the Opposition, said he felt the public distribution and sales model was a mistake.
“One of the things that they could be doing – many people would talk about, why don’t we have a private distribution model?”, said Houston, at the time. “Why don’t we let entrepreneurs sell cannabis? Why are we putting it through the Nova Scotia Liquor Corporation system? I know the various parts of that argument. There’s good and there’s bad, but there’s no doubt that the sale of cannabis should be highly regulated, and I think one of the opportunities that this government had was to think a little bit out of the box, use their imagination just a little smidgen, and come up with an idea that would be a more effective distribution model.”
Instead, he said the province should look at a “franchise model” for retailers, while still overseeing and monitoring cannabis sales through a mandated product tracking system, while also controlling the price.
“I’ve been thinking about this model where the government could franchise locations to sell cannabis. They could have used a franchise model. People are familiar with the franchise model. We’re familiar with fast-food franchises. They operate quite successfully.”
“So, if the government wanted to involve private interest, private enterprise, in the sale of cannabis, they could have. They could have put franchises out there, and the government could have then stipulated what computer system to use, so they could have some insight and some oversight into the amount of product that was being sold. The pricing could have been controlled to a certain degree. The training of staff could have been pushed down from a franchisor. I imagine we’d have a course at the Nova Scotia Community College, training employees in the sale of cannabis.”
Instead, he accused the then Liberal government of taking the easy way out.
“These are the types of opportunities that were in front of this government, and this government chose just to look for something that was cheap, easy, and quick, instead of trying to find a real solution, instead of seeing an opportunity and again, it is one of the disappointments that we have in this government.”
In an interview later that same year, Houston doubled down on his franchise model, as well.
“If the PC Party had been in government and was able to determine the cannabis delivery model, I would have pursued a franchise model. The government would still regulate the product and ensure safe distribution of the product, but it would be sold by private business.”
Now that the sales and distribution model is nearly three years old, it’s uncertain if Houston still feels this private franchise model is worth pursuing. His office has not responded to several requests from StartCann to clarify his stance.
Nova Scotia has added new cannabis stores
Nova Scotia will be opening six new cannabis stores in April and May, adding to the current 24 NSLC retail cannabis locations across the province.
In April, Berwick and Sydney Mines stores will begin cannabis sales, followed by Mahone Bay, and Bayer’s Lake and Novalea (both Halifax) in May.
The Nova Scotia Liquor Corporation, the Crown corporation which manages cannabis in the province, started off with 12 retail cannabis locations on October 17, 2018. In February 2020, plans for renovations to 14 new stores were announced. All but three of those have since opened. Three of the six new locations—Berwick, Mahone Bay, and Sydney Mines—are from last year’s announcement.
The province’s decision to open more stores last year was in part due to the low uptake in online sales compared to retail locations. Less than 1% of total NSLC sales for cannabis or alcohol were from online sales according to the NSLC’s most recent quarterly report.
“We have said all along that we will move slowly and safely and need to be socially responsible and we are ready to take the next step, said Finance and Treasury Board Minister Karen Casey in a press release last year. “We have recognized that online sales so far have not addressed areas of the province where there was a gap and it is apparent that new customers want the in-store experience. We feel that opening more stores is the most effective way to deal with the illicit market, protect our children and keep communities safe.”
Nova Scotia has a population of just under a million, with about half in and around the capital of Halifax, served currently by seven stores (soon to be nine). Towns like Berwick and Mahone Bay only have a population of a few thousand, while Sydney Mines on Cape Breton Island is about 15,000. All profits from the NSLC go back to the province.
When New Brunswick elected a Progressive Conservative government in 2018, they did begin looking at selling off the province-run cannabis retail chain CannabisNB. The government put out an RFP in 2019 seeking a single potential buyer to take over the numerous cannabis stores in the province and only after over a year of pushback from the industry and public did the government announce their decision to keep the crown corporation in March 2021.
When the government first announced the proposal, it said it was doing so because Cannabis NB was not yet turning a profit. This was, of course, due mostly to initial startup costs, the same as any other similar provincial retail model or private retailer. Cannabis NB has since turned a profit over several consecutive quarters.
The argument for selling off the crown corporation was that it was not turning a profit, but since that time CannabisNB has become profitable. Despite the entire process costing the province around $200,000, New Brunswick Finance Minister Ernie Steves said the decision to look at selling the crown corporation was a prudent decision of the Higgs government to look into selling the crown corporation that has a monopoly on retail cannabis sales in the province.
But since then, Steves has been promoting CannabisNB, and the province has even launched their first CannabisNB Cup and recently announced a farmgate model to allow producers to sell their own products through their own retail store, on-site.