During the last year, there has been a substantial increase in the amount of cannabis 2.0 products that are available for sale in Canada.
The growth of this vertical has served as a catalyst for many Canadian Licensed Producers (LPs), retail outlets, and brands. Going forward, we expect the cannabis 2.0 trend to become more significant with consumers, retailers, and operators. The high-margin nature of this trend is expected to improve profitability and we are bullish on the potential impact that is associated with it.
Two Leading Canadian Cannabis 2.0 Companies
Auxly Cannabis Group Inc. (XLY.V) (CBWTF) is one of the Canadian LPs that have capitalized on the cannabis 2.0 market and we were impressed with the growth that was recorded in the second quarter.
Earlier this week, the Canadian cannabis company released quarterly financial results where the sales consisted of approx. 75% of cannabis 2.0 products. During the last few years, the company has formed strategic relationships with high-profile cannabis brands and consider this to be a key growth driver for the business in future quarters.
In 2021, Auxly is working on executing on a strategy that is centered around building upon its success as a leading cannabis 2.0 product company and expanding its dried flower, pre-roll, oil, and capsule product offerings. By the end of the year, the company wants to be generating positive Adjusted EBITDA and we will monitor how the business continues to grow.
Indiva Limited (NDVA.V) (NDVAF) is another operator that benefited from the cannabis 2.0 opportunity in Canada. When compared to other Canadian LPs, the company has taken a different approach to growth by forming relationships with high-profile cannabis brands.
Two of the US brands that Indiva works with are of Bhang® Chocolate and Wana™ Sour Gummies, which are considered to be leading chocolate and gummy brands in Canada. By bringing these brands to market, Indiva has been able to capture significant market share of the cannabis 2.0 market and we are bullish on the growth prospects that are associated with the products on a going forward basis.
Earlier this week, Indiva announced the launch of Slow Ride Bakery Cookies which is its first product in the baked goods edibles market. The strategy with the brand will be different from Bhang® and Wana™ in the sense that Slow Ride Cookies are produced in Ottawa by Slow Ride Bakery which is a craft producer of edibles.
During the last few months, Indiva has launched the products in Ontario and plans to expand the distribution of Slow Ride Cookies to other provinces and channels in the near-term. We will monitor how the brand benefits the business and will continue to follow Indiva.
If you are interested in learning more about companies that are levered to Canada’s cannabis 2.0 market, please send an email to email@example.com with the subject “Canadian Cannabis 2.0 Companies” to be added to our distribution list.
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