Canada Cannabis Spot Index (CCSI) 

Published February 1, 2019

The CCSI moved 2.6% higher this week to C$6.53 per gram, from C$6.35 per gram. The index continues to fluctuate within a narrow C$0.28 range. C$6.53 per gram equates to US$2,240 per pound at current exchange rates.

On January 29th, Health Canada released another snapshot of the preliminary data on sales, finished inventory and unfinished inventory with December 2018 included. This data is released as part of the Cannabis Tracking System instituted by the Canadian government to ensure illegal supply does not cross into legalized markets. This data set is important for many reasons, but primarily to give industry participants a look at the fundamentals of non-medical cannabis sales in Canada.

With three full months of operation behind us we have more data on consumer habits and inventory. Let’s start by looking at total non-medical sales. From the report we see that total recreational sales in December grew by 5% or to 7,252 kg, but that is not actually the case because December has 31 days. When we normalize for the number of days in each month, sales are essentially flat, more clearly showing Canada currently consumes approximately 232 kg per day.

Next let’s look at the Inventory on hand. The reported amount of finished dried cannabis inventory, or product that is ready of sale, as of the end of December was 19,085 kg, or 2.7x the total dried cannabis actually sold on average during November and December to medical and non-medical customers. Perhaps more thought provoking is the December end of month unfinished dried cannabis inventory, or product that has been cultivated but not packaged or labelled. This inventory sits at 109,236 kg of dried cannabis or 15x the total dried cannabis actually sold on average during November and December to medical and non-medical customers. Lets ask the same question again: Is there really a supply shortage?

This dataset is released every two weeks, and its labelled as “Preliminary”; therefore we want to discuss how much the October and November data changed. The table below gives the full comparison, but in this report we focus on a couple of the big moving factors.

First to note is the total medical sales in November dropped by 1,922 kg. This could be a result of a consumers that have a medical prescription procuring product from the non-medical sector.

The next piece of information that has changed is the finished inventory ready for sale. The end of month volume held by Federally licensed holders dropped by 4,785 kg in November. Simultaneously, the unfinished end of month inventory held by Federally licensed holders jumped by similar amount or 4,470 kg. Our quick take is that product that was assumed to be ready for sale in fact was not quite ready.

With each release of the report we will continuously assess data and highlight the changes.