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People Want Cheap Weed, And Aurora Cannabis Is Paying The Price

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Canadians want cheap weed, which isn’t great for companies that want to make expensive cannabis.

Cannabis companies in Canada have long promised “super premium” products, some going as far as predicting demand for $100 grams of the plant. Canadian consumers are heading the other way, however, as Aurora Cannabis Inc.  outlined Thursday in an earnings report that revealed quarterly losses of more than C$1 billion.

Chief Financial Officer Glen Ibbott said in a conference call that 17% of the Canadian cannabis market was purchases of cheap weed — less than C$9 ($6.79) a gram — as of December, up from just 2% over the summer. Meanwhile, premium pot went from a market share in the mid-30% range to 17%.

“So, [it took] a hard turn,” Ibbott said in the call.

Aurora focused on high-grade cannabis at its Whistler facility and in specific brands under Chief Executive Terry Booth and former Chief Corporate Officer Cam Battley. Aurora changed its leadership, however, and executives said Thursday that it plans to launch a cheaper brand called Daily Special.

See also: Aurora Cannabis covets California’s weed culture, but can’t pronounce one word correctly

Aurora’s statements in the call Thursday reflect a broad trend in the sector across Canada, in every jurisdiction — people who enjoy and buy cannabis want cheap, strong weed and will speak with their wallets, according to PI Financial analyst Jason Zandberg. Pressure for inexpensive pot was nearly inevitable, he said, but Zandberg and industry executives were caught off-guard by how quickly the demand arrived.

Source: https://www.marketwatch.com/story/people-want-cheap-weed-and-aurora-cannabis-is-paying-the-price-2020-02-13?mod=cannabis-watch

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