CCSI image 1 2022-04-15

*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$5.07 per gram this week, down -0.5% from last week’s C$5.10 per gram. This week’s price equates to US$1,821 per pound at the current exchange rate.

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Adding to our report from last week, Statistics Canada has also released licensed processing area data last week after almost nine months. The latest data set gives us a view of cannabis processing area through September 2021. Cannabis processing refers to processing, compounding, or conversion of marijuana into cannabinoid products, cannabinoid concentrates, or cannabinoid extracts. Processing output is typically associated with cannabis 2.0 products such as beverages, edibles, concentrates, vapes, and other novel cannabis products.

As seen in the chart below, total cannabis processing area has increased year-over-year as the consumption of cannabis 2.0 products has increased. The first data point reported by Statistics Canada is for October 2019, and since then processing area has grown 3.2x times from 130,269 square meters to 541,777 square meters in September 2021.

Interestingly, cannabis processing area and outdoor growing area have a strong positive correlation (0.779). This actually makes sense since outdoor cultivation generally produces large volumes of lower quality cannabis more suitable for processing into cannabis 2.0 products, while indoor-grown flower is typically directed at the premium smokable flower market. 

One last fact to note on processing is related to the specific license required to sell cannabis plant material. Starting this month, Health Canada will grant all standard and micro processing license holders authorization to sell dried and fresh cannabis. Prior to this change, processing facilities could cultivate cannabis and use the harvested material to feed their downstream activities only. With this change, which becomes effective on April 19, processing license holders will no longer require an amendment in order to sell fresh or dried cannabis to wholesalers.