Canada Cannabis Spot Index (CCSI)
Week Ending March 12, 2021
*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$5.84 per gram this week, down 1.4% from last week’s C$5.93 per gram. This week’s price equates to US$2,102 per pound at the current exchange rate.
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This week, the Ontario Cannabis Store (OCS), the body that regulates the province’s cannabis market, released their Q3 Cannabis Insights report, covering the period from October through December 2020. The report contains a wide variety of useful data to show how Ontario’s market is developing. In today’s CCSI report, we focus specifically on price.
The legal Canadian cannabis market has faced strong competition from illicit supply chains, due to high product prices and relatively few stores. The OCS’s latest report shows that those market dynamics are changing.
The report shows that not only did the brick and mortar retail footprint grow to 324 stores (an increase of 298 year-on-year), but the price of dried flower on the OCS online store continued to decline, falling further below the price of cannabis sold through illegal mail-order marijuana (MoM) sites after doing so in Q1 2020 for the first time. The average price of legal dried flower on the OCS online store, including sales taxes, was C$6.24/gram. The reduction was largely a result of discount lines of cannabis released by the big Licensed Producers. In comparison, the average dried flower price on illegal MoM sites dropped to C$7.76/gram. While the quality of the dried flower was not taken into consideration for this price comparison, legal product has some overall advantages in this regard due to required quality assurance and safety testing, prohibitions on pesticide use, and standards for accuracy in labeling, among other regulations.
Clearly, lower prices have helped legal sellers build market share. The report indicates 40.3% of cannabis sales are now being made through legal channels. We believe that, along with lower prices, COVID lockdowns helped transition more consumers to regulated sales channels and legal products.
Overall, this report once again emphasizes that positive trends for the legal cannabis industry are emerging and being cemented as the regulated market develops.
For more data and analytics like this, subscribe to the Cannabis Market Insights report developed in collaboration Nasdaq. This in-depth monthly report provides exclusive data and analysis on the legal cannabis industry, focusing largely on the Canadian cannabis market, as well as the cannabis equities market in the U.S.