Black Market Hurts New Brunswick Cannabis Growers | Cannabis: the effects of legalization

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The black market is hurting cannabis producers in New Brunswick | Cannabis: the effects of legalization

Solargram Farms is the largest regulated outdoor cannabis grower in New Brunswick, located in Saint -Antoine.

In New Brunswick, cannabis producers believe their industry is in crisis and blame the black market for eating up much of their profits.

Marc LeBlanc is the President of Solargram Farms, the largest regulated outdoor cannabis grower in New Brunswick, Saint-Antoine.

We've been running for three years, and the harvest is great this year, he says.

Marc LeBlanc, president of Solargram Farms in Saint-Antoine

The company operates 35 greenhouses to grow cannabis and produces between 3,000 and 4,000 kilograms of dried cannabis, destined for large supply chains in Ontario and Western Canada.

With his associates, the entrepreneur invested millions of dollars in this project. But the profits are not as expected.

No one is in a position of profit right now, we pay our bills, we keep rolling, we hope that one day things will turn around. x27; improve, but at some point people will stand up and say why are we doing this?

“It's still a turnover of about thirty employees, a significant investment and then we want the benefits of that. Right now the industry is falling, seriously falling.

— Marc LeBlanc, President of Solargram Farms

In New Brunswick, companies Zenabis and Organigram saw their shares drop 98% and 88% respectively during the of the last three years. In Fredericton, the subsidiary of Canopy Growth has permanently closed its doors.

Organigram is one of the biggest players in the entertainment market right now and we're barely making a profit, that gives you an idea of ​​what's going on across the industry, says Organigram CEO Beena Goldenberg.

Cannabis producer Organigram's facilities in Moncton, New Brunswick.

In the early years of cannabis legalization, Beena Goldenberg remembers an immature market and the problems of product glut.

Today, the issue is the black market. It continues to thrive, as regulated companies must adhere to tough federal rules and pay onerous taxes.

At the end of the day, our prices have to be the same as the black market to keep customers, it's a huge challenge for the whole industry, she says.

Marc LeBlanc says his cannabis should be sold for $20 a gram. But on the black market, a gram sells for $8, which forces the producer to lower its prices.

Solargram Farms operates 35 greenhouses to grow cannabis and produces between 3,000 and 4,000 kilograms of dried cannabis, destined for large supply chains in Ontario and Western Canada.

He does not understand why the authorities tolerate the existence of illegal dispensaries in indigenous communities.

It's like no one sees this or no one acts, so recently I sent letters to the RCMP to put in a formal complaint. These establishments are illegal, they hurt us, it's still a public safety issue because they have very high concentration products, he explains.

RCMP says enforcement of the Cannabis Act in First Nations communities in Canada is complex and works with communities, partners police and the Department of Justice Canada on this subject.

“The black market is putting a lot of pressure on the legal market in terms of pricing and it is putting pressure on us growers.

—Marc Leblanc, President of Solargram Farms

Organigram's CEO also believes in improving black market enforcement.

To be honest, I don't think consumers who buy products online, I don't even think they know what's in the product listing on those sites, she says.

About 220 people were laid off in Moncton in July 2020 at Organigram.

Marc LeBlanc also believes that Canada Post has a role to play.

Immediately, Canada Post, they have to stop transporting this cannabis outside the country, it will have a huge impact on the black market because they are the networking to allow this product to go everywhere in Canada, he explains.

The entrepreneur also points out that products available on the internet cost less, by about half. However, he questions whether these products are safe.

That's why we developed a cannabis industry, to make it safe!

The Cannabis Council of Canada says that New Brunswick is not tracking economic losses caused by the illicit cannabis market. It is therefore difficult to quantify the losses, but the industry advocacy group estimates that the black market continues to account for at least 50% of cannabis sales in the country.

Approximately 220 people were laid off in Moncton in July 2020 at Organigram. The company points out that the pandemic explains these job losses and that its cannabis production plant is here for good.

It now has 800 workers, it is acts as one of the largest employers in the region.

We have invested over $300 million in this facility. It is one of the largest, if not the largest indoor grow facility in Canada. Our production capacity is more than 80,000 kilograms per year.

The facilities of cannabis producer Solargram Farms in Saint-Antoine. The president, Marc LeBlanc, operates 35 greenhouses there and plans to expand his facilities soon.

Marc LeBlanc also wants to continue to do well. He plans to expand his business and even wants to develop a processing plant.

We are in the process of brewing cannabis at the best quality and the best possible price, so that puts us in a very interesting position in the long term, but we are still in the thank you for the suppliers to whom we must answer, because they have financial difficulties, he maintains.

Based on the report by Nicolas Steinbach

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