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Canadians Spent Big Money on Cannabis Products in 2020, and New 2.0 SKUs Could Boost Sales Higher

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NEW YORK, March 3, 2021 /PRNewswire/ -- After overcoming some significant roadblocks since legalization in 2018, the Canadian regulated cannabis industry had a huge year in 2020. Canadians more than doubled their purchases from 2019, buying $2.6 billion worth of cannabis and cannabis products last year—a 120% increase year over year. While lockdowns stemming from the public health crisis undoubtedly gave a major boost to the industry's growth, the increases also represented a maturation of its providers gaining footing and beginning to overtake the black market. Under the 'Cannabis 2.0' banner, cannabis companies were able to roll out an expanded list of regulated products, with perhaps the biggest benefactors being the extractors, including Pure Extracts Technologies (CSE:PULL) (OTCPK: PRXTF), Aurora Cannabis Inc. (NYSE:ACB) (TSX:ACB), Aphria Inc. (NASDAQ:APHA) (TSX:APHA), Hexo Corp. (NYSE:HEXO) (TSX:HEXO), and Canopy Growth Corp. (NASDAQ:CGC) (TSX:WEED).

More products are potentially on the way, as Pure Extracts Technologies (CSE:PULL) (OTC:PRXTF) submitted multiple SKUs to Health Canada for approval, including THC vapes, CBD vapes, 1:1 blended vapes, and 3 different flavors/formulations of gummies.

"We create products that are in high demand by provincially authorized distributors and retailers nationwide, and are looking forward to having our high quality, FSO products in consumers' hands early in Q2 of this year," said Pure Extracts CEO, Ben Nikolaevsky.

The new products will be launched under Pure Extracts' 'Pure Pulls Vapes' and 'Pure Chews Gummies' branded product lines.

Operating out of its all-new, state-of-the-art processing facility located within 20 minutes of the resort town of Whistler, British Columbia, Pure Extracts Technologies continues to develop its portfolio of cannabis 2.0 products. Much of the company's cannabis emphasis has been on its 34 proprietary formulations of 'Pure Pulls' branded full spectrum oil (FSO) vape products and on their new line of 'Pure Chews' edible gummies, which are manufactured under license from Taste-T, LLC, the manufacturer of the popular Fireball cannabis gummies.

The Whistler-based Company is coming off of a newly-signed cannabis 2.0 distribution deal with Canada House Wellness Group Inc. to distribute cannabis concentrate products.

"We've been extremely impressed with the Pure Extracts team and the brand presence they have established particularly in the western provinces," said Chris Churchill-Smith, Canada House CEO. "We look forward to supporting their commercialization efforts in a mutually beneficial way."

At the core of the Pure Extracts business model is its state-of-the-art, plant-based extraction technology. Recently, the Company announced its first commercial sale of CBD oil on the wholesale market, further bolstering the supply for other developers of cannabis 2.0 products. At 85% purity levels, Pure Extracts' high-purity CBD distillate is ideally suited for use in most cannabis 2.0 products, including edibles, vape pens, and beverages.

"We are excited to have completed our first commercial order and we are proud of the quality of distillate that our extraction team has produced in our new, world-class facility," remarked Nikolaevsky.

Among the top cannabis 2.0 products available, the top seller is vape pens.

To that end, one province over in Alberta, Aurora Cannabis Inc. (NYSE:ACB) (TSX:ACB) began ramping up talk of its cannabis 2.0 strategy back in 2019. By May, the company had already begun building up inventory in anticipation of the legalization of edibles and vaping products—more than a year ahead of schedule.

The head start paid off, as Aurora's Drift brand topped the edibles category with 27% of sales online, and 25% in retail stores.

But with perhaps a bigger edge over Aurora in the cannabis 2.0 race came from the moves made by Canopy Growth Corp. (NASDAQ:CGC) (TSX:WEED) when it signed a deal with partners Constellation Brands, with plans to launch innovative cannabis-infused beverages.

That concoction became a reality last summer, when the partnership unveiled its beverage called Tweed to the market. Canopy has also supplemented its cannabis 2.0 offerings with such products as the Martha Stewart line of CBD products, which includes gels and oils and involves a line of CBD products for pets.

Canopy wasn't the only cannabis producer that partnered with a giant bottler to produce new beverages. Hexo Corp. (NYSE:HEXO) (TSX:HEXO) has secured a top spot in the cannabis-infused beverages category in Canada, through its Truss line of beverages co-developed and marketed with Molson Coors.

The duo followed up the offering into the USA, with the launch of Veryvell, a new line of non-alcoholic, sparkling CBD beverages, exclusively available in Colorado.

Product innovation seemed to benefit Aphria Inc. (NASDAQ:APHA) (TSX:APHA) greatly in 2020. Sales from its products pulled even with its distribution business for the first time in the first quarter, and it's been a successful run since.

"[During that period] the company successfully launched over 30 new vape SKUs into the Canadian market with positive reviews from control boards and consumers alike," the company stated in a note upon the release of those results.

Aphria was buoyed by its success with vape products, which it focused on among its cannabis 2.0 categories. Vape pens currently represent approximately 13% of the total Canadian retail cannabis market, according to the company, and it believes that share will reach at least 20% looking ahead.

As vape products and other cannabis creations gain in popularity, extraction companies like Pure Extracts benefit from a first-mover advantage in an industry that appears to be steadily growing.

To get more information on Pure Extracts Technologies, please click here.

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