The loss comes on the heels of a previous loss of $11.7 million during the first six months of legalization.

Cannabis N.B. is reporting a $2.2 million loss for the first quarter of 2019 and the provincial cannabis retailer has pointed its finger squarely at the culprit: the illicit market.

The loss comes on the heels of a previous loss of $11.7 million during the first six months of legalization, CTV News Atlantic reports.

A Cannabis N.B. spokesperson noted in a recent statement that unlicensed dispensaries in the province were monopolizing the cannabis retail trade.

“The emergence of many illegal dispensaries—up to 40— throughout the province continues to be the biggest risk and threat to a safe, legal cannabis retail industry,” reads the statement. “And the continuing stabilization of the portfolio and having access to full product offering is improving, but still not at our originally anticipated levels,” it adds.

The deficit has left the province scrambling to come up with a solution that provides New Brunswick residents access to legal cannabis from licensed producers, but doesn’t continue bleeding cash.

The prospect of privatizing the embattled retailer was first raised following the conclusion of its first fiscal year, although no final decisions have been made. Also mentioned as options were closing stores that don’t perform or hiring experienced “experts” to take over the business. Again, a final decision on that is not expected to be made until the end of the year.

Former Cannabis N.B. president and CEO, Brian Harriman, who resigned in April, had initially predicted sales of approximately $45 million in the first fiscal year of operations. It was expected the retailer would turn a profit, or a least break even.

New Brunswick is far from the only province that has posted losses since legalization. Quebec’s SQDC (Société québécoise du cannabis), for example, posted a $4.9 million loss in its first fiscal year, despite selling more cannabis than any other province in Canada.

Update: A previous version of the article stated the Nova Scotia Liquor Corporation (NSLC) was among provincial retailers yet to turn a profit. The NSLC, which does not separate cannabis and alcohol sales in its reports, posted an overall profit for the latest fiscal year.

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