The New Brunswick government says it has formed a new Crown corporation to oversee the sale of recreational marijuana.

Two cannabis producers, Organigram and Canopy Growth, have signed agreements to be suppliers, the province announced Friday.

​'If we reflect for a second, we have all these reporters and cameras here to talk about one of the biggest drug deals in Canadian history.' - Mark Zekulin, president of Canopy Growth

Finance Minister Cathy Rogers said the government chose a Crown corporation model so it would have clear oversight of how recreational pot will be sold.

But she also told reporters the Crown corporation won't run retail operations.

Instead, it will work with "an other entity" that will, Rogers said.

Details of the retail model, how and where sales of legalized pot will be carried out, and what the "other entity" will be are to be worked out in the coming months, Rogers said.

"This is uncharted territory," she said. "Experience will tell us where to go from there."

The new government arm was incorporated last week as a numbered company and has no other name yet. Other details, such as how the corporation will function, were not available Friday.

'Historic day' for pot companies

Through agreements with the province, the two suppliers will provide at least nine million grams a year for sale in the adult recreational use market.

​Mark Zekulin, president of Canopy Growth, said the deal marks a historic day for the company.

"If we reflect for a second, we have all these reporters and cameras here to talk about one of the biggest drug deals in Canadian history," he said. "I think this is pretty exciting."

Greg Engel, Organigram's chief executive officer, said the deal will require the company to at least double the amount of employees over the next six to eight months. It currently employs about 100, he said.

Opposition reacts

Ross Wetmore, a Tory MLA for Gagetown-Petitcodiac and a member of a select legislature committee on cannabis, said he was disappointed by the announcement, arguing the province would be better off using a private model.

With the Crown corporation model, the government assumes all the liability for how sales go and the costs of distributing pot, such as opening stores and training employees.

"We don't know how the sales are going to go, it's going to be legal all across the country," he said. "People aren't going to flock to New Brunswick."

Committee toured province

Growing flowers of cannabis intended for the medical marijuana market are shown at Organigram in Moncton. (Ron Ward/Canadian Press)

In early September, the select legislature committee on cannabis said the majority of New Brunswickers it spoke with favoured having a Crown corporation, rather than private retailers, manage the sale of marijuana.

Its report said most people who appeared before the committee favoured age 19 as the minimum legal age, in part because it would streamline enforcement.

However, some had concerns over whether selling pot and alcohol in the same stores could impact people's health.

"Some are fearful this would encourage co-consumption and would pose a danger of relapse for recovering drug and/or alcohol dependencies," the report said.

Still others were concerned that having separate retail locations would be a waste of resources, the report also said.