September 13, 2019

CANADA CANNABIS SPOT INDEX — September 13, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published September 13, 2019

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

The CCSI was assessed at C$7.22 per gram this week, up 6.3% from last week’s C$6.79 per gram. This week’s price equates to US$2,479 per pound at current exchange rates.

 

This week we examine the Q2 2019 cannabis usage data collected by Statistics Canada through the National Cannabis Survey (NCS).  The survey is conducted each quarter by the government to better understand usage habits and monitor societal changes that might have occurred as a result of legalization. The survey targets Canadians aged 15 and over, and the data for Q2 was collected after the fact, between August 14 and September 12. 

 

According to the report, 4.9 million – or 16.1% – of Canadians used cannabis during the three months ending June 30. With data going back to the beginning of 2018, we can see more Canadians are using cannabis. In Q1 2018, 4.2 million – or 14% – reported using cannabis. We calculated the compound annual growth rate (CAGR) in this metric to be 10.9% when reviewing the data over the past 18 months.

Source: Cannabis Benchmarks, Statistics Canada

The same data for the four largest provinces, which can be seen in the chart below, shows Ontario accounting for the bulk of Canadian cannabis usage. Ontario CAGR was calculated to be 16.9% over the past 18 months, while Alberta also had significant growth with a CAGR of 15.4%. We expect the upward trend in usage to continue as more retail outlets open to increase availability; legal products expand to include edibles, extracts, beverages and topicals; and cannabis education continues to develop.

Source: Cannabis Benchmarks, Statistics Canada

The survey also breaks out usage habits by gender. Although it dropped from Q1, male consumption has continued to grow overall with 3 million Canadian males reporting using cannabis in the last quarter. Growth in male consumption has been robust, with a CAGR of 18.7% since the beginning of 2018. Female usage has been relatively flat with 1.9 million females reporting using in Q2 2019, and a CAGR of only 0.2%.

Source: Cannabis Benchmarks, Statistics Canada

The data from the NCS also drills into the differing methods of both obtaining and consuming cannabis products post-legalization. The data clearly shows that males are more likely to consume cannabis more frequently for non-medical use, buy their cannabis, and smoke flower over other derivative products. Meanwhile, only 12% of females report using cannabis and are more inclined to use to alternatives such as lotions and orally consumed products.

Source: Cannabis Benchmarks, Statistics Canada

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

13 September 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

September 6, 2019

U.S. Cannabis Spot Index — September 6, 2019

U.S. Cannabis Spot Index — Published September 6, 2019

U.S. Cannabis Spot Index down 2.2% to $1,374 per pound.

 

The simple average (non-volume weighted) price decreased $10 to $1,596 per pound, with 68% of transactions (one standard deviation) in the $845 to $2,346 per pound range. The average reported deal size was nominally unchanged at 2.2 pounds. In grams, the Spot price was $3.03 and the simple average price was $3.52.

 

The relative frequency of trades for outdoor flower increased by 1% this week. The relative frequency of transactions involving greenhouse product decreased by the same proportion, while that for indoor flower was stable. Warehouse product’s share of the total documented weight moved nationally contracted by about 3% this week. The relative volumes of greenhouse and outdoor flower each expanded by over 1%.

 

 

The U.S. Spot Index declined by 2.2% this week to settle at $1,374 per pound. Decreases in the weekly composite prices of California and Washington State lifted the national average, outweighing small increases in the Spot rates of Colorado, Oregon, and Nevada. However, even as overall prices slipped in California and Washington, the volume-weighted rates for indoor flower in both of those states ascended to new annual peaks this week. 

 

Turning to some of the country’s mid-sized markets, Massachusetts, Illinois, and New Mexico all saw upticks in their Spot prices this week. Complete August sales figures have yet to be published for Massachusetts’ adult-use market, but demand has been climbing all year with only about a dozen producers licensed to generate supply for general consumers. Local zoning issues in Illinois are raising the possibility that the maximum of 110 adult-use storefronts may not be able to open as smoothly as some anticipated come 2020, which would stymie access and demand in the licensed system somewhat.

The national volume-weighted price for flower to be sold to general consumers was essentially flat this week, as declines in Washington State and Nevada slightly outweighed modest increases in the other adult-use markets. 

 

Prices for medical flower slipped after a significant rise last week, mainly on a sizeable week-over-week decrease in rates reported in that sector of California’s market. Several of the small East Coast medical cannabis markets also saw declines in their Spot Indices this week.

 

March 2020 Forward initially assessed at $1,225 per pound.

 

The average reported forward deal size was 45 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 59%, 24%, and 17% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 43 pounds, 40 pounds, and 63 pounds, respectively.

 

At $1,200 per pound, the October Forward represents a discount of 12.6% relative to the current U.S. Spot Price of $1,374 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Headlines From This Week’s Premium Report:

  • California

  • State Spot Index Averaged Over $1,250 Per Pound in August, the Highest Monthly Price Observed in 2019
  •  
  • Colorado

    Summer’s Upward Trend in Wholesale Prices Continued to Open September as State Spot, Rates for Indoor and Greenhouse Flower, All Climbed to New Annual Highs

  • Oregon

  • Wholesale Price Recovery Persisted in August, but Rate of Upward Momentum Slowed
  •  
  • Washington

  • Volume-Weighted Prices for Indoor and Outdoor flower Rose to New Year-to-Date Peaks this Week
  •  
  • New Mexico

  • Official Data Shows Production Expanded in Q2 Due to Increase in Allowed Plant Count; State Spot Index Decreased in that Period as Supply Outpaced Demand

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

6 September 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — September 6, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published September 6, 2019

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

The CCSI was assessed at C$6.79 per gram this week, up 1.1% from last week’s C$6.72 per gram. This week’s price equates to US$2,320 per pound at current exchange rates.

 

This week we examine June sales figures from Health Canada. The government’s official Cannabis Tracking System data shows sales of both dry cannabis and oils increasing substantially over the past few months, driven mainly by the opening of new storefronts in Ontario.  

 

 

Total sales of non-medical dried cannabis in June increased by 8% from May, to a total of 8,441 kg sold (or 281 kg/d on average). The growth comes as new retail outlets provide increased availability and Canadians become more familiar with the product. As the non-medical market expands, total sales of medical dried cannabis dropped for the second straight month. In June, total sales of medical dried cannabis decreased by 10% to 1,535 kg (or 51 kg/d on average), the lowest sales volume figure for medical cannabis since adult-use legalization in October 2018.

Source: Cannabis Benchmarks, Health Canada

Non-medical cannabis sales volume now exceeds that in the medical sector by a factor of five-and-a-half. This is an increase from January, when non-medical sales volume outpaced medical by a factor of about three. 

 

As has been observed in state-legal cannabis markets in the U.S., medical cannabis patients in Canada seem to be turning to recreational outlets for their supply, rather than ordering online from government sources. It is likely the trend in this ratio will continue even if medical sales remain steady; more Canadians will likely give the licensed recreational markets a chance in the future, either as a first time user or one making the switch from purchasing from the illicit markets.

Source: Cannabis Benchmarks, Health Canada

The Cannabis Tracking System also reports total finished and unfinished inventory for the end of each month. We have observed inventory climbing steadily as Canadian licensed producers (LPs) bring on more cultivation capacity. New figures from the recent report report show finished inventory ballooning to almost 49,000 kg, with 62% of that inventory held by distributors and retailers. Our calculations based on the three-month average demand from all consumers indicates this finished inventory represents over five months of supply.

Source: Cannabis Benchmarks, Health Canada

The amount of unfinished inventory is even more staggering at 263,333 kg ready to be processed, packaged, and distributed. Our calculations based on the three-month average demand indicates that the unfinished inventory held by LPs represents 28 months of supply.

Source: Cannabis Benchmarks, Health Canada

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

Become a member of our Price Contributor Network and receive discounted pricing and exclusive analysis!

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

6 September 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved