Cannabis 2.0EdiblesRetailVapingCannabis 2.0 products blast off shelves in holiday release blitz

‘We’re selling through all the product categories,’ says Delta 9 CEO
Nick Laba Nick LabaDecember 23, 20195 min

Busy employees, which one can only assume were rosy-cheeked and full of holiday cheer, prepared Canada’s first batch of cannabis 2.0 products just in time for the busiest shopping season of the year.

Consumers, who have patiently waited for a legal vape puff or an edible treat, came out in droves during 2.0’s first retail week.

Delta 9 Cannabis Inc. (TSX: DN and OTCQX: VRNDF) reported record retail sales in December 2019, which improved by $52,957 — or 9.5 per cent — from the newly available 2.0 goods over the past five days.

These figures are among the first indications of the retail performance of next generation cannabis products, which many weed companies are hoping will boost revenues after a disappointing first fiscal year in the legal recreational market.

Read more: Cannabis 2.0 products won’t hit shelves till early January: Canopy

Normally, Delta 9 says it does around $450,000 in monthly sales, but has done closer to $550,000 this month.

The company operates four retail locations and a production facility in Manitoba, and said in a press release Monday that it has made a gross margin of 31 per cent on cannabis 2.0 products.

Delta 9 first cannabis 2.0 products
The first cannabis 2.0 products to hit Delta 9 stores last week were Tweed and Tokyo Smoke chocolates, which sold out within four hours. Photo courtesy of Delta 9.

CEO John Arbuthnot told Mugglehead the Tweed and Tokyo Smoke chocolates that were the first items available for sale on Dec. 18 sold out in the first four hours.

He said all the cannabis 2.0 products are selling out faster than his stores can stock them.

“Unfortunately, because the order sizes are so small, we’re selling through all the product categories,” Arbuthnot said. “With cannabis 2.0 products rolling out during the busiest shopping season of the year, you couldn’t ask for better timing as a retailer.”

A lot of customers have been coming into stores saying, particularly about edibles, that they’ve been waiting for them, according to Delta 9.

Even when it had sold out of vape batteries, the company said its customers continued to buy vape pen cartridges, which are filled with cannabis oil made specifically to be vaporized.

The product mix of 2.0 products based on sales has been 51 per cent vapes and 49 per cent edibles, Delta 9 said.

So far, the sales are incremental and not cutting into the dried flower market, but Arbuthnot said he expects to see cannabis 2.0 products start to cannibalize some flower sales overtime.

The new products lines in Delta 9 retail stores include: re-useable or single use vapes, cartridges and batteries from Aphria, Cronos, MedReleaf, High Park Holdings, Aurora Cannabis, Organigram and Dosecann, which is a wholly owned subsidiary of Auxly Cannabis.

Edible products from MedReleaf, High Park Holdings, Aurora Cannabis, Tweed and Dosecann.

 

nick@mugglehead.com

@nick_laba

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