Canada Cannabis Spot Index (CCSI)
Published March 15, 2019
The CCSI declined by 1.4% this week to C$7.01 per gram, from last week’s C$7.10 per gram. The average price over the past eight weeks is assessed to be C$6.60 per gram, which includes the excise duties. This week’s price of C$7.10 per gram equates to US$2,378 per pound at current exchange rates.
This week we provide an update on recent sales trends. On March 12th, the Government of Canada’s Cannabis Tracking System published an updated supply and demand report. The newly published data made some revisions to sales figures from Q4 2018 and added January 2019 data. Today we look specifically at recreational market sales, defined formally as “CRA-stamped cannabis products sold directly in the Canadian retail market (either online or in-person) for non-medical purposes.”
Source: Cannabis Benchmarks, Government of Canada Cannabis Tracking System
A closer look into sales from individual provinces provides more perspective on the current purchasing habits of consumers according to their jurisdiction. British Columbia’s (BC’s) December revenues were remarkably low, with total retail sales tallying only C$1.24M. This despite BC being the third largest province by population, although it is possible that it is also home to Canada’s most established illicit market.
Ontario’s December sales are similarly disproportionate to its population size. Ontario is home to 38% of the total Canadian population, but sales from November to December dropped by a staggering 14% to C$8.72M, 16% of the nationwide total.
The two noteworthy positive highlights were December sales growth in Alberta and Saskatchewan, which saw increases in retail revenues of 12% and 5%, respectively.As seen in the charts above, there was a substantial revision made to the reported sales figures for the Q4 2018 non-medical dry cannabis and oils categories (see yellow line). The Government does state that the reported data is preliminary and that “verification and validation of this data is ongoing.” A close analysis of the most current figures is especially warranted in this case as the overall changes are quite significant.
Total sales of non-medical dry cannabis in Q4 2018 were revised higher by 634 kg, or 4.2%, and total sales of non-medical cannabis oil for the same time period were revised higher by 1,128 litres, or 20.8%. Going forward we need to remember that large revisions are always on the table, especially as the Government builds error correction into their models and cannabis market participants become more accustomed to, and efficient at, reporting inventory and sales data.
The addition of the January data provided some further insight into sales trends. Non-medical dry cannabis sales for January dropped by 4.5% from December sales to 5,336 kg across Canada. January non-medical oil sales told another story. Total oil sales sharply increased by 10.7% to 2,873 litres. All this stated, we take this latest month of data with a grain of salt as potential revisions could be made in the future.