Canada cannabis patients boost Aurora edible sales as rivals target recreational market

[December 19, 2019]  By Nichola Saminather

TORONTO (Reuters) - Aurora Cannabis Inc this week became the first major Canadian company to sell edibles and vapes for medical use, a small base that nevertheless helps shore up margins and paves the way for sales in the much larger European medical market.

Medical marijuana has been legal in Canada since 2001, and recreational use since October 2018, but derivatives - products from cannabis extracts, like edibles - were only approved for sales this week for both medical and recreational use.

"If you're looking to launch a product into markets like Denmark or Germany, you are required to be selling it in the medical market in Canada first," said Deepak Anand, chief executive of Materia Ventures, a Europe-focused cannabis distribution company.

Aurora executive Cam Battley acknowledged this was a consideration in boosting its medical menu.

Canada's second-biggest marijuana producer added gummies, mints and vapes to its medical menu on Monday. Aurora declined to give the value of medical sales so far but said it had to replenish gummies supplies on its website and saw an uptick in patient registrations.

Aurora, like its rivals, will also sell recreational edibles, which have shipped but must make their way to store shelves through government-controlled wholesalers in most provinces. In contrast, companies can ship medical marijuana products directly to registered patients now.

Large Canadian provinces like Ontario, Quebec and Alberta will not begin sales until at least January.

Of the 51 companies that Health Canada allows to supply derivatives for recreational use, 47 can also sell them in the medical market but few are doing so now.

A spokeswoman for No. 4 producer Aphria Inc said it will add three vape products specifically for patients in January as part of its medical brand. Canada's other major cannabis firms, Canopy Growth Corp and Tilray Inc, said they are focusing on existing medical products but that could change in future.

Aurora's method "is one way to get a little bit of a head start on sales," said Andrew Kessner, an analyst at William O'Neil & Co. "And selling anything to medical patients is higher margin."

(Reporting by Nichola Saminather; Editing by Lisa Shumaker)

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