Aleafia Health Inc. (ALEAF)

[FUNMAN]

If I recall correctly, the Health Canada's New Brunswick stores lost about $12M last year. That's why they want to get out of the business.

It will be interesting to see how a capitalist retailer does in comparison. Whoever takes over the business should surely improve upon the government's results.

Someone with deeper pockets than Aleafia needs to take it over. Couche Tard might be just the players.

But watch out. If Health Canada really comes through with a speeded up licensing program, a company like Couche Tard would be an immediate player.

For now, I wonder where they intend to get their flower and extracts from? It might be Canopy for everything?

Quebec’s Couche Tard convenience plans to bid on Cannabis NB

By: Jesse B. Staniforth
November 29, 2019

https://www.leafly.com/news/industry/couche-tard-cannabis-nb?fbclid=IwAR0zeoHirSCCqC41cKmiCrVUsN2R50dzT2NOG-QQU8pCpJBbke9USvzRxm4

Massive Quebec convenience store firm Couche Tard, which owns 16,000 stores across every continent except Africa and Oceania, has long aimed to become a major cannabis player.

With New Brunswick seeking a single buyer for its Crown adult-use retail monopoly Cannabis NB, Couche Tard sees opportunity.

“This is effectively an interesting piece of news for us,” said Laurence Leroux, a spokesperson for the company, whose holdings also include Circle K and Mac’s Milk stores.

In 2017, Couche Tard made a serious play to position itself as a key cannabis retail player, hiring a powerful lobbyist to press the Quebec government to open a private retail market in which Couche Tard stores could sell cannabis the way they sell beer, wine, and tobacco.

Quebec Doesn’t Want Cannabis-Infused Beverages to Taste Too Good
When Quebec ultimately opted for a Crown monopoly retail system, Couche Tard chief executive Alain Bouchard railed against the decision, saying, “It insults me to the greatest extent. […] We had no discussion with the Quebec government.”

Defeated in Quebec, Couche Tard made it clear they wished to enter cannabis retail elsewhere, and soon enough the company partnered with Canopy’s Tweed and an Ontario retail lottery winner to open a single store in Ontario.

For several months, the company fell silent on cannabis, until this summer, when they announced they had acquired a controlling 50.1% stake in retailer Fire & Flower for $380 million.

In September, two years after suffering the “insult” of the Quebec government’s choice for Crown control, the company said it intended to become one of the “key players” in the North American adult-use cannabis market.

Through Fire & Flower, Couche Tard plans to make an offer for New Brunswick’s Crown retailer Cannabis NB, which recently put out a tender calling for private companies to bid.

With the acquisition of Cannabis NB, Couche Tard could make a serious advance into cannabis retail by taking over the monopoly for an entire province.

At the same time, taking over Cannabis NB would mean figuring out how to pull the company out of its months of heavy losses.

Toronto retail advisor Bruce Winder warned last week, “Probably whoever takes over the New Brunswick operation is going to continue to see some losses for a few years because the volume just isn’t high enough to justify the business model.”