Premium Brand Leader Upping the Ante for Cannabis 2.0 Products
Ryan Allway
July 21st, 2021
News, Top News, Uncategorized
Canada made whole new classes of cannabis products legal for recreational use in October 2019. Hailed as Cannabis 2.0, the introduction of products such as vapes, oils, and edibles was anticipated to offer a new high-growth category in the already booming legal cannabis industry. Due to a variety of factors, including an uneven regulatory rollout from province to province, it was not the immediate and transformative splash that many had anticipated. Given a little time to find its footing, both with regulators and consumers, the new sector of products is offering the once-promised growth.
According to Health Canada cannabis market data, adult-use extract (including vapes, tinctures, concentrates, and oils) sales have increased 214% from January 2020 to March 2021. Over the same period, adult-use dried flower sales have increased 29%. While dried flower sales still represent 64% of total cannabis sales in Canada, extracts now account for 17% of the market. Prohibition Partners, in its North American Cannabis Report, projects Canadian adult-use flower sales to increase from $1.6 billion in 2021 to $1.8 billion in 2025, while other forms of adult-use products (oil, vapes, edibles) are expected to grow from $645 million in 2021 to $1.2 billion in 2025.
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With that high growth landscape in mind, a few recent announcements from Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF) may be of interest. Decibel is a smaller-scale craft cannabis producer with operations in BC, Alberta, and Saskatchewan and distribution throughout BC, Alberta, Saskatchewan, Manitoba, and Ontario. The company’s premium flower brands have consistently commanded some of the highest prices on the market while regularly selling out. Decibel launched its first Cannabis 2.0 products in Q4 2020 and has been posting ever-increasing market share numbers across its distribution map ever since.
New Product Launches and New Partnership
Decibel recently announced the launch of a new premium concentrate brand, Pressed by Qwest, along with the rollout of several new products across the vape, concentrate, pre-roll, and dried flower categories. Under its leading premium brand Qwest, the company is in the process of introducing three new live concentrate varieties. Under its lower priced General Admission brand, Decibel is introducing two new vape varieties. By the end of 2021, the company expects to have introduced 30 new vape and concentrate SKUs for the year, adding to the 22 launched in 2020.
So far, the results have been impressive. In Q1 2021, Decibel’s Blendcraft by Qwest concentrate line was the top brand in terms of sales, achieving a 21.9% market share across BC, Alberta, Saskatchewan, and Ontario. Decibel’s General Admission line of vapes was rated third in sales in those same provinces for the quarter, hitting a 10% market share for the period. The introduction of new SKUs and a new premium brand should only serve to improve those numbers. As an aside, Qwest-branded flower products achieved 8.4% share of sales across the same four provinces for the quarter, ranking as the #1 premium flower brand.
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Adding to the story, Decibel recently announced a strategic partnership with the extraction experts Union Cannabis Group. Decibel gains access to UCG’s product formulations and IP for the manufacturing of vapes and concentrates that it can use for its own lines. The agreement also has Decibel manufacturing and distributing UCG’s premium Dabstract brand, already successful in key American markets, for the Canadian adult-use market.
The addition of a new brand, coupled with the potential not only for new product lines under existing Decibel brands but for improvement in manufacturing processes and product quality, bodes well for continued growth. “Decibel is committed to continuously raising the bar when it comes to product quality and innovation in the cannabis industry” said Paul Wilson, Chief Executive Officer of Decibel. “This strategic partnership bolsters our product development pipeline in the high growth vape and concentrate product categories while strengthening our brand portfolio by bringing the renowned Dabstract brand to the Canadian marketplace.”
New CEO with Deep Branding and Marketing Experience
These developments, and the company’s commitment to building well-rounded and successful brands, dovetails nicely with the recent appointment of a new CEO. Paul Wilson already had a seat on Decibel’s Board of Directors, and though the company cast a broad net to find a new leader with the right mix of experience and personality the decision came back to Mr. Wilson. Wilson has served at an executive level for a number of consumer businesses, including Canadian Tire, Mark’s, Princess Auto, Spence Diamonds, and Alcanna Nova Cannabis. He has intimate knowledge of Decibel’s business and loads of experience building successful consumer brands.
At this stage of Decibel’s development, a person with Wilson’s type of background makes a lot of sense. Having navigated the startup and licensing phases, and in the process of completing a major expansion of production capacity, Decibel’s most pressing need is to expand its market share and to bring new, loyal consumers into the fold. Wilson’s appointment has the potential to accelerate the company’s already-impressive growth as its house of brands expands to accommodate growing demand for its premium products.
Investors may want to keep an eye on Decibel over the coming months. Right alongside its continued growth in market share, the company has posted three straight quarters of increasing and positive Adjusted EBITDA which is a bit of a rarity in the cannabis industry. The introduction of new products and brands, fueled by greatly increased production capacity, bodes well for Decibel as it fully embraces the promise of Cannabis 2.0.
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The above article is sponsored content. CannabisFN.com and CFN Media, have been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: https://cannabisfn.com/legal-disclaimer/
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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