*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$5.27 per gram this week, up 1.5% from last week’s C$5.36 per gram. This week’s price equates to US$1,758 per pound at the current exchange rate.

SOURCE: Cannabis Benchmarks, Health Canada
  • Statistics Canada recently released September retail cannabis sales for the country. September sales, at C$389.9M, were flat compared to August. To correct for the different number of days per month, we look at the data in terms of average daily sales in the above chart. The latest data shows average daily sales hit a new peak of C$13.0M in September, an increase of 12% from the same month last year.
  • As we reported previously, there were a number of anomalous factors that prevented sales from being considerably higher in August. First, Ontario’s provincial cannabis wholesaler, the Ontario Cannabis Store (OCS), suspended deliveries to retailers after a cyberattack impacted one of its supply chain partners. Second, labor issues in British Columbia prevented the provincial cannabis distribution center from distributing goods to private retail locations in late August. Third, fierce competition in Alberta’s retail sector is leading to softening sales margins.
  • As seen in the chart above, sales were essentially flat through the summer months. Even though this new peak in daily sales is welcome news to the industry, there is concern that the market is still severely imbalanced, with too much supply relative to consumption. One factor that we focus on that clearly shows growth slowing is the comparison of Q3 sales relative to Q2 sales. Starting with 2019, the sequential increases in sales from Q2 to Q3 are as follows: 2019 at +39%; 2020 at +29%; 2021 at +11%; and 2022 at +3%. With continuous expansion of accessibility through new store fronts and delivery options, this data tells us that consumption is strong, yet price points and margins are dropping rapidly. This begs the question, are we nearing the maximum size of this retail market?
  • If sales continue at the daily run rate for September for the rest of the year, total 2022 sales should exceed C$4.52B. (This calculation assumes daily sales average C$13.0M between October and December.)