As the legalization of recreational marijuana is smoldering under review in the Senate, New Brunswick’s finance minister is concerned the province won’t rake in as much green as projected in the 2018-2019 budget.
“If it’s a short-term delay, it will have a smaller, less-significant impact but the longer the delay, of course, there will be an impact on our revenue,” explained Cathy Rogers, the province’s finance minister.
That revenue strain was valued at about $7.2 million but that number could easily be thrown off as the legalization date is shifted from July to at least August.
Nonetheless, Cathy Rogers says provincial retail stores will still be ready to go in July but will only open after the legalization bill receives royal assent.
“We may hire staff later but there are certainly some expenditures that will have to incur regardless.”
The budget projected $6 million in excise tax revenue and $1.2 million in profits from retail stores. Both of those figures are based on a July opening and more than six months of sales.
The provincial opposition is concerned that the $7.2-million figure may have been exaggerated.
“I think they’ve just taken a guess, and the guess could be way understated, it could be overstated — it’s very hard for me to predict and that’s why I was asking them in their business plan how do those numbers roll out and what’s the certainty?” said Progressive Conservative MLA Bruce Fitch.
But what does this mean for the cannabis industry moving forward, as companies like OrganiGram in Moncton begin a hiring blitz ahead of the country’s legalization date.
“We wouldn’t be at the point where we would be sweating the timeline extension at any point right now, and we don’t have any further indications that it’s going to be any longer than early fall so right now, we continue to sort of plan as we were before,” said Ray Gracewood, the chief commercial officer with OrganiGram.
There should be a more clear indication as to timelines at the end of May, after five Senate committees study the legalization bill.