Flight instructor reported an airborne conflict with a UAS while in the traffic pattern during a training flight. The student performed a go around to avoid the UAS.

Narrative

Local VFR training flight for a student pilot working towards the private pilot certification. During a pattern lap at ARB encountered an UAS/drone on final to runway 24. Weather conditions: 4 to 5sm viz with smoke and haze; vertical visibility appeared unlimited; winds light approximately 110/04. Flight was in left pattern traffic using runway 24 and on the 4th pattern lap with at least 2 other aircraft making landings in-between laps. Encountered a drone at approximately 300 to 350' AGL and 1/8 to 1/4 mile east of the runway 24 approach end; traveling on a north-easterly heading. Separation was never less than 600 feet straight line. Drone was black and gold; approximately the size of 1 to 2 large fists carrying a small payload suspended about 8 to 12 inches below the drone. While I have never seen a package drone upclose; this was likely too small to be useful in a commercial package type delivery role. My student visually found the drone a few seconds after I noted it's location. The aircraft was descending below the drone altitude at this time. Due to the low altitude distraction; my student elected to perform a go-around. With permission/landing clearance from ATC; we elected to perform a teardrop back to runway 6 and landed to avoid a full pattern lap around to runway 24; potentially putting our aircraft near the drone again. No evasion action was necessary.