CCSI image 1 2021-12-24

*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$5.05 per gram this week, up 0.6% from last week’s C$5.02 per gram. This week’s price equates to US$1,779 per pound at the current exchange rate.

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This week Statistics Canada released retail sales data for October 2021, with nationwide legal cannabis sales reaching a new monthly high of C$365.1M. This is the first month where sales have exceeded the C$360M threshold, which puts the current annual run rate at C$4.32B. While illicit sales currently make up nearly half of the nation’s total retail cannabis market, the proportion of the illicit market is quite different from province to province. Last week we reported on the size of Ontario’s illicit market, which was 45.8% of total cannabis sales, according to the Ontario Cannabis Store’s latest quarterly report.

To correct for the different number of days in each month, we look at average daily sales. As seen in the chart below, October 2021 sales reached C$11.75M per day. This is slightly lower than the previous month, which was at C$11.8M per day.

SOURCE: Cannabis Benchmarks, Statscan

This week, as we did this past October, we sliced up the above data to calculate the average monthly sales per cannabis user. Each province has a different usage rate that is estimated by Statistics Canada through a quarterly survey. With the last quarterly survey being conducted in Q4 2020, we made some adjustments to this baseline to account for new cannabis users, as well as better accessibility to legal cannabis; a change that has enabled customers to transfer their purchasing habits from the illicit market to the legal markets. Overall, we estimate that 17% of the Canadian population consumes cannabis.

This is a flow diagram of the calculation we performed for each province.

The results of these calculations are shown by month in the chart below.

SOURCE: Cannabis Benchmarks, Statscan

Alberta continues to lead the way with its spending habits. We estimate a typical Alberta cannabis user who purchases cannabis from the legal market spends C$8.50 each month. This is approximately C$0.90 or 11.5% more than they spent last year. The strong Alberta spending rate makes sense, as the province boasts the largest retail footprint per capita in Canada. However we also see Ontario spending picking up, with the rapid roll-out of retail stores. We estimate that the average Ontario cannabis user now spends C$7.20 each month in licensed stores.