PAX Labs, known for their innovative approach to vaping, secured partnerships with four different licensed producers this week. PAX made exclusive agreements with Organigram Holdings (TSXV:OGI) (NASDAQ:OGI), Supreme Cannabis (TSX:FIRE), Aurora Cannabis (TSX:ACB) (NYSE:ACB), and Aphria Inc. (TSX:APHA) (NYSE:APHA) last Friday to launch new extracts within their existing PAX Era platform.
The PAX Era is a pen-and-pod vape combination for oils and extracts that allows users to control the temperature, flavor, and potency of their cannabis. The Era pen originally launched in 2016 and can connect via bluetooth to the PAX Vapor app, which is where consumers can adjust their potency and flavor preferences. The Era pen is only compatible with Era Pods. Per the new agreements, each LP will be bringing their own unique brand of cannabis oils to the Era Pods. Supreme Cannabis will be selling their 7ACRES brand of oils exclusively for the PAX Era, and Organigram will be offering their Edison Cannabis Co. brand for the vape.
"We have been working hard to ensure Canadian consumers will be able to enjoy quality cannabis concentrates in a convenient pod-format," said Tim Pellerin, the Canadian General Manager for PAX, in the company’s press release on Friday. "That is why we are excited to launch our immersive PAX Era experience with quality products from four powerhouse cannabis companies—Aphria, Aurora, Organigram, and Supreme Cannabis. As the market grows, we will continue to bring on more brand partners, offering our consumers a selection of products on the PAX Era platform."
So far, PAX has sold 500,000 Era pens in North America, a number expected to grow exponentially once the infused markets open up in Canada later this year. Irwin Simon, interim CEO of Aphria, expects this market to make up almost thirty percent of Canada’s cannabis market by 2021.
"The expected legalization of vapes and concentrates will mark a significant turning point in the Canadian market, providing more choice and new experiences, while opening the door to a range of new consumers," Simon said in Aphria’s press release. "Our strategic alliance with PAX sets the stage for our broad portfolio of vapes and concentrate products to come."
Where does PAX Labs stand in the market for cannabis oils and concentrates?
Last year, nearly $3 billion worth of cannabis concentrates were sold in the United States alone, leading BDS Analytics and Arcview Market Research to call concentrates “the hottest product category in cannabis.” By 2022, research suggests that the concentrate market could be worth close to $8.5 billion. With numbers like that, concentrates will soon dwarf flower sales in North America within the next decade.
Vaping is quickly becoming the most popular way to use cannabis concentrates, but standing out in this market is no easy task. Competition is fierce in the vaping category, with companies releasing new products and new concentrates on a regular basis. Being technologically savvy is one way PAX Labs is standing out in this industry, especially with their line of PAX Era pens. The bluetooth enabled, SimpleClick designed vape pen gives consumers more control over their cannabis consumption, and now with exclusive partnerships with the top LPs in the industry, consumers have even more variety when it comes to their choice of product. In a market where people are constantly looking for new and innovative ways to enjoy cannabis, this variety will be key.
In anticipation of their new partnerships, PAX Labs secured $420 million in funding from Tiger Global, Tao Capital Partners, and other new and existing investors in April. PAX used the financing to invest in new markets, including international growth into Canada in anticipation of the new concentrate market launching in October. According to PAX CEO Bharat Vasan, the company is investing heavily into its branding in order to capture a piece of this new market.
“This financing round allows us to invest in new products and new markets, including international growth in markets like Canada and exploring opportunities in hemp-based CBD extracts … We are hiring and investing heavily in our people, who power PAX’s mission of establishing cannabis as a force for good,” Vasan said in the press release.