*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$5.86 per gram this week, up 0.3% from last week’s C$5.84 per gram. This week’s price equates to US$2,132 per pound at the current exchange rate.

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This week we provide an update on the still-growing gap between supply and demand in Canada’s legal cannabis market. By combining our estimate on monthly demand with Statistics Canada’s production estimates, we can get a clearer understanding of the dynamics of the country’s regulated cannabis system.

Cannabis Benchmarks estimates that the total implied demand for legal cannabis in December 2020 was 30,318 kg, a 212% increase over the same month in 2019, as shown in the following table.

Source: Cannabis Benchmarks, Statistics Canada

Even though demand has grown at a rapid rate, December’s demand is still less than 18% of the 165,189 kg of unpackaged production reported by Statistics Canada for the month of November. The mismatch is creating a huge oversupply of both packaged (finished) and unpackaged (unfinished) products across the country. Statistics Canada’s most recent data for November 2020 shows unpackaged and packaged inventory ballooning to 1,165,725 kg. This represents 38 months worth of supply at current demand levels, and inventory is continuing to increase. The intent is that this inventory will ultimately be sold either as dried flower, converted into a cannabis derivative product, or exported, but there is a chance that the quality of the product degrades to a point where it is not sellable.