Cannabis NB Reports Quarterly Profit Of $3.3M

The CEO of Cannabis NB says his team has done an exceptional job of turning the business around.

On Thursday, the Crown corporation reported $3.3 million in profit during the second quarter of 2020-21. That is an increase of 154 per cent over the past quarter and 314 per cent year-over-over.

“A year ago, we were asked to fix Cannabis NB, and we did. I remain very confident in our potential moving forward and our focus remains on working hard for the taxpayers of our province,” said Patrick Parent during a news conference in Fredericton.

It was the third straight profitable quarter for Cannabis NB, which had been plagued by multimillion-dollar quarterly losses since its opening in October of 2018.

The corporation reported $1.3 million of profit in the first quarter and $500,000 in the fourth quarter of 2019-20.

Parent said the “exceptional turnaround” is thanks in part to an increase in sales, which hit $20.1 million in the second quarter — an 87 per cent increase year-over-year.

Dried flower sales made up much of the increase, up more than 53 per cent or $4.8 million compared to the same quarter in 2019.

“It was imperative that we negotiated lower price points with our suppliers and our valued customers. Those improvements had to be passed on to the customer as we understood that we needed to become more competitive,” said Parent.

“To that extent, we were the first cannabis retailer in the country to offer a $100 ounce and most of our flower formats are the cheapest in the country.”

Cannabis NB also reported $4.26 million worth of sales in concentrates, edibles and topicals during the second quarter. Those products were not legal during the same period last year.

Parent said the Crown corporation also managed to reduce its operating expenses by 24 per cent over the past year.

“We had to look at various elements, from the infrastructure costs to the back office support. Also, there was some management restructuring that took place a year ago,” he said.

Cannabis NB has repaid a “significant amount” of its startup costs — one-quarter of it in the past year, said Parent — and expects the entire amount to be repaid within the next two or three years.