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Aurora Launches Edible Safety Campaign across Canada

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On October 17, the one-year anniversary of its legalization of recreational cannabis, Canada implemented Cannabis 2.0. This second round of cannabis legalization allows for the sale of derived cannabis products such as edibles, vapes, and concentrates. In anticipation of the second phase of legalization, many cannabis players have invested in the development of derivative products. Aurora Cannabis (ACB) is utilizing its Aurora Air and Aurora Polaris facilities to manufacture cannabis-infused vapes and edibles.

Aurora has already submitted its products to Health Canada for approval. The approval process takes 60 days. During this period, the company can’t yet sell its products. Instead, it will introduce them by mid-December.

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Aurora launches a safety campaign

To provide information on safely storing cannabis-infused edibles away from children and pets, Aurora Cannabis has launched Ready for Edibles, a national safety campaign. The company has targeted cannabis retail outlets across Canada and digital assets to run the campaign to connect with customers.

The campaign also focuses on teaching existing and new customers about responsible consumption. It covers topics such as signs of excess consumption, exercising caution when mixing cannabis products with alcohol, and not driving while intoxicated.

In a press release, Aurora’s CEO, Terry Booth, stated, “The roll-out of Aurora’s next generation of high-quality cannabis products is very exciting and we are proud to be able to offer new forms like vapes, concentrates and edibles.” He added, “We want to make sure consumers have the information they need to understand the differences in these products, how to consume them responsibly, and most importantly, that they should be kept away from children and pets.”

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Edibles are vital to the cannabis sector

Recent vaping-related illnesses and deaths, higher operating losses, a thriving black market, and the expectation of lower sales in the second half of 2019 have dragged the cannabis sector down. YTD (year-to-date), the ETFMG Alternative Harvest ETF (MJ) has fallen 22.1%. In comparison, the S&P 500 Index is up 21.5% in the same period.

Currently, cannabis products consist of dry flowers, leaves, oil, and capsules. These products have lower margins. However, with the legalization of derivative products, the companies will be able to command higher prices on their derived products, which could improve their margins. Also, the increased availability of cannabis-derived products could negatively affect the black market.

In June, Deloitte projected that the cannabis-infused edibles market could be worth $1.6 billion per year. A survey showed that 59% of respondents were interested in trying cannabis-infused edibles. More people expressed interested in trying edibles than any other product type.

Other cannabis players

Looking at the opportunity available, many cannabis players are entering the derived product market. Earlier this week, BNN Bloomberg reported that Canopy Growth (CGC) (WEED) was planning to introduce 30 cannabis-infused products in the market by the end of this year. These products consist of beverages, edibles, and vapes. The company is also hoping to add 20 more products by the end of next year. For more information, check out Canopy Growth Is Set to Launch New Products.

Earlier this month, BNN Bloomberg reported that Truss Beverage Company, a joint venture between HEXO Corporation (HEXO) and Molson Coors, would introduce a portfolio of cannabis-infused beverages later this year.

Cronos Group (CRON) also considers infused edibles to be an essential segment for its growth. It appointed Todd Abraham, who has over 35 years of experience in the consumer goods sector, as its chief innovation officer in July 2019.

Aurora’s stock performance

On October 30, Aurora stock rose to a high of 4.85 Canadian dollars before closing the day at 4.75 Canadian dollars, up 1.1% from its previous day’s closing price. YTD, Aurora Cannabis has lost 33.3% of its stock value. Its lower-than-expected fourth-quarter revenue, its analyst downgrade, and sector weakness appear to have dragged its stock down. During the same period, its peers Canopy Growth, HEXO, and Cronos Group have fallen 27.6%, 36.9%, and 23.9%, respectively.

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