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  • Canadian Cannabis Companies Now Offering “Value Brands”

In order to compete with the illicit market, Canadian cannabis companies are beginning to offer “value brands” to their customers. Canopy, Tilray and Aurora have all launched lower-priced marijuana products as cannabis stocks have plunged more than 60% over the past year and companies have blamed lower than projected revenue largely on slow retail launch.

 

“All of this is designed to draw consumers from the illicit market and into legal channels,” said Adam Greenblatt, Canopy’s business development lead. “It’s there to provide more variety and more of a value offering to ideally mature the market. Low-cost cannabis attracts bulk purchasers, people on the illicit side who would buy their cannabis by the ounce. People who buy cannabis by the ounce have been toughest to convert.”

 

Canopy’s value brand, Twd., is launching in April a one-ounce product called “Twd. 28” that will average a THC count of 13-25% at approximately $4.00 per gram.

 

Tilray’s brand The Batch is a “new no-frills cannabis brand focused on delivering quality cannabis flower and pre-rolls at competitive prices,” said Tilray’s Chief Marketing Officer Adine Fabiani-Carter. “We expect our new product format and offerings to increase revenue and profitability over the long term.”

 

Daily Special, Aurora’s value brand, will be sold in a variety of sizes at a maximum of 15 grams and will have a THC count of 15-21%.

 

 

Although Canada’s legal cannabis market saw a growth of 107% in 2019, the illegal market still accounts for at least 70% of sales, according to data from StatsCanada. Overall cannabis sales also reduced by 7% from the previous year. Illegal sellers carried 86% of the market.

 

“We haven't disrupted the black market significantly,” Mike Serr, the head of the Association of Chiefs of Police, told the Canadian Broadcasting Corporation (CBC) last year. “If there is a strong vibrant dark market out there selling illegal drugs, people will go to that and we need to direct them to the legal market.”

 

“The public don't know that when they're going online, typically the first three or four sites that will come up online will be illegal sites to purchase cannabis,” said Serr. “We're working nationally to try to find some solutions.”

 

These new “value” cannabis brands raise questions on quality. According to High Park Holdings Ltd, a subsidiary of Tilray, Inc., The Batch is a value brand “dedicated to delivering quality cannabis flower and pre-rolls at competitive prices.”

 

Frequent dispensary goers may be familiar with the shelf system, where the top quality products are sold at a higher price point. What is to be seen is whether these products can strike a balance between price and standard.

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Canadian Cannabis Companies Now Offering “Value Brands”
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