On Oct. 17, 2018, Newfoundland and Labrador became one of the first provinces in Canada to have physical cannabis stores open. Now, about nine months into legalization, the province is the first to have its auditor general (AG) announce a review of its cannabis industry.
Newfoundland and Labrador’s AG Julia Mullaley announced in early June that her office would review the industry broadly, though the parameters of that review have not yet been specified.
Generally speaking, the AG review would look at whether regulations around cannabis are being followed properly in the province, and if things are working as they should regarding contracts, licensing, regulations, and other factors, Mullaley said.
The review is warranted because the cannabis industry represents a major societal sea change, Mullaley said, and given the public health considerations, it’s important to ensure things are operating as they should.
“In addition to the public health and societal aspects, an area [of interest] for the province was [how] to support new business opportunities,” she said. That aspect of cannabis in Newfoundland and Labrador could also be part of her office’s review, Mullaley said.
NDP support for the review
Alison Coffin, a member of the house of assembly and the provincial NDP leader, welcomed the review, saying that there were a lot of questions remaining about the contracts awarded, the companies involved in the industry, and how things were working for the local market.
“These are very important concerns to be addressed and it’s nice to see that in a non-partisan way,” Coffin said.
Another important area is not in recreational cannabis but on the medical side, she said, particularly concerning accessibility and whether medical cannabis could be covered under health insurance.
“People consume marijuana for a variety of reasons,” said Coffin, including medical ones. She hopes to see some movement on better coverage for medical applications, either through private insurers or the province’s health coverage.
“I’d really like to see a move toward that because that’s one of the reasons for the legalization,” she said.
As well, Coffin said she hopes the review looks at the effect of existing cannabis policies on local business, including suppliers and retailers.
“What we’ve seen happen here in the province was there was some rational around, ‘We need to go with these large companies,’ who are going to produce an enormous amount because we need to ensure our supply,” she said.
The result of the decisions prioritizing supply mean that profits are going to companies outside the province, said Coffin, who added that she hopes there’s a way to move forward to ensure that more of the money made in the cannabis industry stays in Newfoundland and Labrador.
Criticism about supply deals
The deals with Canopy Growth and Biome Grow were a source of criticism against the provincial Liberal government during the province’s recent election campaign, and the Progressive Conservatives wrote to Mullaley to request a review of the cannabis industry in November.
PC leader and MHA Ches Crosbie told NTV News that he was pleased about the review and felt that the public wanted to know there had been no favouritism or discrimination in the awarding of cannabis licenses and contracts to companies like Canopy.
The Liberal government awarded a $40 million tax break to Ontario-based Canopy Growth to ensure cannabis supply, and there have been questions about the land deal concerning the company’s St. John’s production facility.
Biome Grow also made a deal with the provincial government to build a production facility in Western Newfoundland, and the company will receive $52 million in remittances from the Newfoundland and Labrador Liquor Corporation, which oversees the cannabis industry, as part of that deal.
For his part, Premier Dwight Ball, whose Liberal government was re-elected in a minority in May, said he also welcomed the review—because he was sure it would find nothing untoward. Ball told VOCM News the contracts are above board and that he believes the review will counter the “misinformation” coming from the opposition about them.
Mullaley said that the questions around the Canopy Growth and Biome contracts were not the impetus for the review, which currently has a wide scope that she said will narrow once the audit begins and priorities become clear.
There is no timeline yet for the review, Mullaley said, or for its next step. Her office handling several reviews in different stages, she said, but this one is a priority.