Canada Cannabis Spot Index (CCSI) 

Published March 20, 2020


*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$6.37 per gram this week, down 3.1% from last week’s C$6.58 per gram. This week’s price equates to US$2,035 per pound at the current exchange rate.

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The Cannabis Industry and COVID -19

Sales of cannabis have been steadily growing over the past year. The latest data from Health Canada tallies the total September 2019 non-medical and medical sales at approximately 13,000 kilograms. We project that volume has increased to approximately 14,000 kilograms last month as more retail locations opened across the country, especially in key provinces such as Ontario.

Source: Cannabis Benchmarks

March daily sales are likely to be volatile with COVID-19 hitting our side of the world. The extreme measures of self-isolation, work from home, and social distancing have actually resulted in increased sales for the cannabis industry. Over the past week, cannabis users have been stocking up on cannabis in every province. It has been reported that there are lines at dispensaries across Toronto, while online sales have spiked. The Ontario Cannabis Storage (OCS) stated they had processed 80-100% of typical sales volumes earlier in the week as consumers are choosing home delivery over going out to a physical store. Similar reports are being heard from provincial bodies and local retailers across the country. 

Even with these spikes in sales, Canada seems to be prepared. There will likely be no shortage of product, as expanding production capacity has led to growing inventory of packaged goods. The latest Health Canada report shows 66,000 kilograms of packaged goods in inventory as of the end of November 2019.  If that amount of inventory was still in place today, that is enough cannabis to meet 4.7 months worth of demand.

Source: Cannabis Benchmarks

Going forward, however, we do not expect sales to be as robust. In fact, April sales might be a bit rocky. We are still in the early stages of Canada’s response to the growing threat from COVID-19, and more extreme measures are being taken by some companies and provinces. Cannabis retailers Superette and 23 shops owned by Canopy Growth announced earlier this week that they would close all of their physical retail locations. Canopy indicated they would still sell products online. Prince Edward Island announced that the province’s liquor and cannabis stores would be closed effective yesterday. Other provinces have not yet taken such actions, but it is not out of the question as we observe similar responses from other countries around the world, as well as in some states in the U.S.Yesterday, California Governor Gavin Newsom announced that only limited businesses, including cannabis retailers, will be allowed to operate, but people are to “shelter-in-place,” or remain home unless absolutely necessary. Today, New York’s Governor Andrew Cuomo ordered New Yorkers to stay at home for the foreseeable future. Such a response in Canada could shut off both production and sales, whether through retail or online, of cannabis products.

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