Aug 10, 2021

Exclusive news and research on the wine, spirits and beer business August 10, 2021 In the second part of our interview, Kindred Partners executive vice president and general manager David Prodanovic discusses the development of Canada’s retail cannabis market and recent additions to the Kindred portfolio. SNDC: How has Canada’s cannabis retail and e-commerce market developed over the past year? Do you see any changes from the pandemic creating lasting changes in the way consumers buy cannabis? Prodanovic: The Covid lockdown increased volume buys and, subsequently, consumption as consumers had more time to experiment. Early on, retailers were forced to adopt e-commerce platforms to support click and collect or delivery in order to keep their business alive. As we come out of the pandemic, retail foot traffic is increasing while click and collect orders are slowing down, but I don’t think you’ll see them go away. Allowing brick-and-mortar retailers into the online space gives them opportunity to grow their menus and their business. Delivery is another area that’s growing as many provincial governments across Canada have been supportive of easing restrictions around delivery to help retailers connect with consumers. SNDC: What product segments are especially dynamic in the flower, pre-roll and vape categories? Prodanovic: In dried flower, the 28g format is a powerhouse with consumers taking advantage of the slope available on a per gram basis. It’s much more dynamic in 3.5g formats where you see more premium and craft products along with the value offerings. SNDC: Kindred has made some additions to the portfolio lately, including Skosha and Ayurcann. What do those brands bring to the fold, and what types of products/companies are attractive as you continue to build out the portfolio? Prodanovic: Skosha brings a high-quality, responsive and competitive player into our portfolio. The biggest differentiator for Skosha is transparency and accountability. More and more customers and retailers are expressing interest in what producers are doing for their community and their environment and Skosha is one of the few that is willing to speak up on these points. Ayurcann adds a true value player to the market and has been a great partner for us. For retailers, they have the success story of already providing 17% of the distillate in the Canadian market. This proven success means their products will have pre-sold customers upon entry to the market. Most importantly both companies have great people that view the market in a very similar way to Kindred. These relationships are critical to building successful business outcomes and something we pride ourselves on. When we talk about products, it’s less about category and more about differentiation. There are lots of similar products out there and we need to make sure our partners are prepared to compete not only with their product offering but with price, promotion, and marketing while leveraging our best-in-class data and analytics.