January 14, 2022

CANADA CANNABIS SPOT INDEX — January 14, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending January 14, 2022
CCSI image 1 2022-01-14

*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$5.08 per gram this week, up 1.2% from last week’s C$5.02 per gram. This week’s price equates to US$1,834 per pound at the current exchange rate.

Include your weekly wholesale transactions in our price assessment by joining our Price Contributor Network

If you have not already done so, we invite you to join our Price Contributor Network, where market participants anonymously submit wholesale transactions to be included in our weekly price assessments. It takes two minutes to join and two minutes to submit each week, and comes with loads of extra data and market intelligence.

This week we review Canada’s recreational cannabis store count. The number of stores continues to climb steadily across the country, making the legal cannabis system more accessible to consumers, or in some cases increasing competition amongst retailers in more saturated local markets. 

 

Our latest count shows the number of stores open for business reached 2,967 as of the end of December. That figure is up by 1,562 stores, or a jump of  111%, compared to December 2020. As can be seen in the chart below, we expect that trend to continue throughout this year but at a slightly slower rate.

SOURCE: Cannabis Benchmarks

With each province having different licensing processes, we have seen different growth rates in the number of retailers over the past year. Some provinces still have a public ownership model for brick and mortar stores, while the provinces with the largest number of stores have typically privatized the retail sector. 

 

Ontario had always been set up for private stores, but the method of issuing licenses changed from a limited lottery system to a more open licensing process in early 2020. Subsequently, Ontario was the shining star for the cannabis space, with 1,093 new stores open during the 2021 calendar year. After the slowest initial rollout of licensed stores among all provinces, Ontario now has 1,417 stores. This figure is double that of Alberta, but there is still room to grow. Ontario’s population is 3.3 times that of Alberta, therefore we could see Ontario’s store count continue to grow to over 2,400 to have an equivalent per-capita level to Alberta.

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

14 January 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

January 7, 2022

CANADA CANNABIS SPOT INDEX — January 7, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending January 7, 2022
CCSI image 1 2022-01-07

*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$5.02 per gram this week, lower from last week’s C$5.05 per gram. This week’s price equates to US$1,791 per pound at the current exchange rate.

Include your weekly wholesale transactions in our price assessment by joining our Price Contributor Network

If you have not already done so, we invite you to join our Price Contributor Network, where market participants anonymously submit wholesale transactions to be included in our weekly price assessments. It takes two minutes to join and two minutes to submit each week, and comes with loads of extra data and market intelligence.

This week we continue to examine data published in the Ontario Cannabis Store’s (OCS) quarterly Cannabis Insights report, which covers the period from July through September 2021. The report contains a wide variety of useful data detailing how Ontario’s market has developed.

This report focuses on the proportion of sales dedicated to cannabis 1.0 and 2.0 products in Ontario. As a reminder, cannabis 1.0 references the legalization of combustible cannabis flower, cannabis oils, and cannabis seeds in October 2018.  A year later cannabis 2.0 began; making available to consumers derivative products such as vapes, edibles, beverages, concentrates, and topicals. The data aggregated in today’s CCSI report reviews a series of OCS quarterly reports to compile a complete view of the trends following the introduction of cannabis 2.0 products. 

 

Cannabis 2.0 products created a lot of excitement ahead of their legalization and sales from the different product categories were expected to grow rapidly. With over two years of data, however, we currently see that cannabis 2.0 products make up only a small portion of total sales. As seen in the chart below, total cannabis sales in Ontario have been accelerating with the rapid build-out of brick-and-mortar stores. Since its full roll-out, however, cannabis 2.0 product sales have averaged approximately 23% of total legal Ontario cannabis sales.

SOURCE: Cannabis Benchmarks, OCS

Diving deeper into the cannabis sales mix, we see that most consumers prefer the traditional smokeable or inhalable products (dry flower or vapes, respectively), with all other derivative products making up a very small proportion of total sales. That being said, we do see a small increase in spending towards consumable cannabis products as seen in the chart below, which compares the sales mix from September 2020 to September 2021.

SOURCE: Cannabis Benchmarks, OCS
The cannabis industry was hoping for cannabis 2.0 products to capture a larger proportion of sales dollars, as they generally command a premium for the same cannabis input and the product differentiation would pull consumers towards legal supply channels. Consequently, these stats are likely disappointing to Canadian cultivation and processing businesses, which had placed large bets on the cannabis 2.0 release.

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

07 January 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

December 28, 2021

CANADA CANNABIS SPOT INDEX — December 31, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending December 31, 2021
CCSI image 1 2021-12-31

*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$5.05 per gram this week, flat from last week’s C$5.05 per gram. This week’s price equates to US$1,777 per pound at the current exchange rate.

Include your weekly wholesale transactions in our price assessment by joining our Price Contributor Network

If you have not already done so, we invite you to join our Price Contributor Network, where market participants anonymously submit wholesale transactions to be included in our weekly price assessments. It takes two minutes to join and two minutes to submit each week, and comes with loads of extra data and market intelligence.

Statistics Canada recently released retail sales data for October 2021, with nationwide legal cannabis sales reaching a new monthly high of C$365.1M. This is the first month where sales have exceeded the C$360M threshold, which puts the current annual run rate at C$4.32B. While illicit sales currently make up nearly half of the nation’s total retail cannabis market, the proportion of the illicit market is quite different from province to province. Last week we reported on the size of Ontario’s illicit market, which was 45.8% of total cannabis sales, according to the Ontario Cannabis Store’s latest quarterly report.

 

To correct for the different number of days in each month, we look at average daily sales. As seen in the chart below, October 2021 sales reached C$11.75M per day. This is slightly lower than the previous month, which was at C$11.8M per day.

SOURCE: Cannabis Benchmarks, Statscan

As we did this past October, we sliced up the above data to calculate the average monthly sales per cannabis user. Each province has a different usage rate that is estimated by Statistics Canada through a quarterly survey. With the last quarterly survey being conducted in Q4 2020, we made some adjustments to this baseline to account for new cannabis users, as well as better accessibility to legal cannabis; a change that has enabled customers to transfer their purchasing habits from the illicit market to the legal markets. Overall, we estimate that 17% of the Canadian population consumes cannabis.

 


This is a flow diagram of the calculation we performed for each province.

The results of these calculations are shown by month in the chart below.
SOURCE: Cannabis Benchmarks, Statscan
Alberta continues to lead the way with its spending habits. We estimate a typical Alberta cannabis user who purchases cannabis from the legal market spends C$8.50 each month. This is approximately C$0.90 or 11.5% more than they spent last year. The strong Alberta spending rate makes sense, as the province boasts the largest retail footprint per capita in Canada. However we also see Ontario spending picking up, with the rapid roll-out of retail stores. We estimate that the average Ontario cannabis user now spends C$7.20 each month in licensed stores.

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

31 December 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

December 23, 2021

CANADA CANNABIS SPOT INDEX — December 24, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending December 24, 2021
CCSI image 1 2021-12-24

*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$5.05 per gram this week, up 0.6% from last week’s C$5.02 per gram. This week’s price equates to US$1,779 per pound at the current exchange rate.

Include your weekly wholesale transactions in our price assessment by joining our Price Contributor Network

If you have not already done so, we invite you to join our Price Contributor Network, where market participants anonymously submit wholesale transactions to be included in our weekly price assessments. It takes two minutes to join and two minutes to submit each week, and comes with loads of extra data and market intelligence.

This week Statistics Canada released retail sales data for October 2021, with nationwide legal cannabis sales reaching a new monthly high of C$365.1M. This is the first month where sales have exceeded the C$360M threshold, which puts the current annual run rate at C$4.32B. While illicit sales currently make up nearly half of the nation’s total retail cannabis market, the proportion of the illicit market is quite different from province to province. Last week we reported on the size of Ontario’s illicit market, which was 45.8% of total cannabis sales, according to the Ontario Cannabis Store’s latest quarterly report.

 

To correct for the different number of days in each month, we look at average daily sales. As seen in the chart below, October 2021 sales reached C$11.75M per day. This is slightly lower than the previous month, which was at C$11.8M per day.

SOURCE: Cannabis Benchmarks, Statscan

This week, as we did this past October, we sliced up the above data to calculate the average monthly sales per cannabis user. Each province has a different usage rate that is estimated by Statistics Canada through a quarterly survey. With the last quarterly survey being conducted in Q4 2020, we made some adjustments to this baseline to account for new cannabis users, as well as better accessibility to legal cannabis; a change that has enabled customers to transfer their purchasing habits from the illicit market to the legal markets. Overall, we estimate that 17% of the Canadian population consumes cannabis.

This is a flow diagram of the calculation we performed for each province.

The results of these calculations are shown by month in the chart below.
SOURCE: Cannabis Benchmarks, Statscan
Alberta continues to lead the way with its spending habits. We estimate a typical Alberta cannabis user who purchases cannabis from the legal market spends C$8.50 each month. This is approximately C$0.90 or 11.5% more than they spent last year. The strong Alberta spending rate makes sense, as the province boasts the largest retail footprint per capita in Canada. However we also see Ontario spending picking up, with the rapid roll-out of retail stores. We estimate that the average Ontario cannabis user now spends C$7.20 each month in licensed stores.

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

24 December 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

December 17, 2021

CANADA CANNABIS SPOT INDEX — December 17, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending December 17, 2021
CCSI image 1 2021-12-17

*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$5.02 per gram this week, up 1.0% from last week’s C$4.97 per gram. This week’s price equates to US$1,780 per pound at the current exchange rate.

Include your weekly wholesale transactions in our price assessment by joining our Price Contributor Network

If you have not already done so, we invite you to join our Price Contributor Network, where market participants anonymously submit wholesale transactions to be included in our weekly price assessments. It takes two minutes to join and two minutes to submit each week, and comes with loads of extra data and market intelligence.

This week the Ontario Cannabis Store (OCS), the organization that regulates the province’s cannabis market, released its quarterly Cannabis Insights report for the period from July through September 2021. The report contains a wide variety of useful data, detailing how Ontario’s market has developed.

In the first few years of cannabis deregulation, the legal Canadian cannabis market has faced strong competition from illicit supply chains, due in part to high product prices and few stores. That story has changed dramatically, however, especially in Ontario, Canada’s largest province by population.

 

The most recent report shows that Ontario’s brick-and-mortar retail footprint grew rapidly in 2021, leading to a big jump in legal cannabis sales. The latest report shows the legal cannabis market in Ontario makes up 54% of total cannabis sales, which was a big jump from the previous quarter.

SOURCE: OCS

The chart below shows the average number of stores in Ontario over the past eleven quarters, as tracked by Cannabis Benchmarks, versus the share of the legal cannabis market. The growth of the legal cannabis sector had a very strong correlation to the number of storefronts open for business before 2021, but this year that relationship has broken down.

SOURCE: OCS, Cannabis Benchmarks
This is not all bad news though, because total recreational sales continue to pick up each month. We believe that legal sales would be much higher if stores were more evenly spaced out. In Ontario, stores are in close proximity in densely populated areas and shopping districts; hence the recent rising store count is not necessarily pushing out the illicit suppliers. The increasing store count in these areas is simply increasing competition amongst legal operators, leading to lower customer traffic and poorer margins. There are calls for the provincial and municipal governments to better regulate licensed locations, and we expect that will happen and be a big positive for the industry.

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

17 December 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

1 2 3 33