July 1, 2022

CANADA CANNABIS SPOT INDEX — July 1, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending July 1, 2022
CCSI image 1 2022-07-01

*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$5.29 per gram this week, up 1.3% from last week’s C$5.22 per gram. This week’s price equates to US$1,862 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.

SOURE: Cannabis Benchmarks, Health Canada
  • Cannabis Benchmarks’ total Canada-wide adult use cannabis store count reached a new high of 3,231 as of June 30. This figure represents an increase of 606 stores during the first half of this year.
  • Each province is on a different trajectory this year based on provincial rules and regulations on retail licensing:
  • Alberta’s store count looks to have reached a saturation point, having stalled at 759. The province continues to lead Canada in terms of stores per capita, but we believe the retail footprint is currently overbuilt, which will likely result in closures. Alberta also recently closed its provincial online store and gave private retail operators the ability to open their own online stores.

  • In Quebec, where all licensed retailers are owned and operated by the provincial government, growth in the retail footprint has been negligible. The lack of convenient access to the legal market is bolstering illicit operators and helping them maintain market share, despite the Quebec government’s claims of a dying illicit supply. 

  • British Columbia’s store count continues to grow at a steady rate, but is still significantly behind that of Alberta, its less populated neighbor.

  • The number of retailers in Ontario continues to grow at a strong rate, but much slower than the exceptional growth seen in 2021. The 2021 rush was initiated by a move to streamline the province’s licensing protocol, which included doing away with a very stringent lottery system.

  • At current growth rates, Cannabis Benchmarks is projecting 3,511 licensed stores open across Canada by the end of 2022. The increased store presence will heighten competition, continue to push retail prices lower, and further pressure margins. That said, lower retail prices could help the legal market continue to expand its share of total cannabis sales at the expense of illicit supply. From the store operator’s point of view, then, lower prices may be offset by increased sales volume.

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

1 July 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

June 24, 2022

CANADA CANNABIS SPOT INDEX — June 24, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending June 24, 2022
CCSI image 1 2022-06-24

*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$5.22 per gram this week, up 0.5% from last week’s C$5.19 per gram. This week’s price equates to US$1,826 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.

SOURE: Cannabis Benchmarks, Health Canada
  • Health Canada data for the number of active registered medical cannabis clients is currently available from October 2018 to September 2021, and is shown in the chart above. 

 

  • Medical cannabis patient registrations have been on a steady decline with the inception of legal recreational cannabis markets in October 2018, except for the initial months of the COVID pandemic when retail shops were closed. Based on recent data, we observe roughly 3,000 fewer active registered medical cannabis clients each month.

  • Provinces with well-developed recreational retail store footprints have seen the biggest loss in medical clients. Alberta, with the highest number of stores per capita, has seen active registrants drop by 57% since legalization. On the other hand, Quebec, with only 89 provincial-run retail cannabis stores currently, has seen patient registrations increase by 64%.

 

  • Since recreational cannabis was legalized, the total number of medical cannabis shipments has dropped by a larger magnitude than the decline in registered clients. Total monthly shipments in October 2018 were 143,752, which fell by 34% to 94,420 in September 2021.

  • Cannabis Benchmarks attributes the transfer of cannabis consumers from medicinal to the recreational path to increasing accessibility in the latter sector (both in terms of storefronts and online shopping), lower prices, larger product variety with similar potencies, and better education.

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

24 June 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

June 17, 2022

CANADA CANNABIS SPOT INDEX — June 17, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending June 17, 2022
CCSI image 1 2022-06-17

*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$5.19 per gram this week, up 0.9% from last week’s C$5.14 per gram. This week’s price equates to US$1,819 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.

SOURE: Cannabis Benchmarks, Health Canada
  • Health Canada data for the number of active registered medical cannabis clients is currently available from October 2018 to September 2021, and is shown in the chart above. 

 

  • Medical cannabis patient registrations have been on a steady decline with the inception of legal recreational cannabis markets in October 2018, except for the initial months of the COVID pandemic when retail shops were closed. Based on recent data, we observe roughly 3,000 fewer active registered medical cannabis clients each month.

  • Provinces with well-developed recreational retail store footprints have seen the biggest loss in medical clients. Alberta, with the highest number of stores per capita, has seen active registrants drop by 57% since legalization. On the other hand, Quebec, with only 89 provincial-run retail cannabis stores currently, has seen patient registrations increase by 64%.

 

  • Since recreational cannabis was legalized, the total number of medical cannabis shipments has dropped by a larger magnitude than the decline in registered clients. Total monthly shipments in October 2018 were 143,752, which fell by 34% to 94,420 in September 2021.

  • Cannabis Benchmarks attributes the transfer of cannabis consumers from medicinal to the recreational path to increasing accessibility in the latter sector (both in terms of storefronts and online shopping), lower prices, larger product variety with similar potencies, and better education.

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

17 June 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

June 10, 2022

CANADA CANNABIS SPOT INDEX — June 10, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending June 10, 2022
CCSI image 1 2022-06-10

*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$5.14 per gram this week, up 0.7% from last week’s C$5.11 per gram. This week’s price equates to US$1,850 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 examine household expenditure data issued quarterly by Statistics Canada. To start, we look at the rise of the legal recreational cannabis market across Canada. As seen in the chart below, in Q1 2022 the estimated household expenditure for legal recreational cannabis was nearly 82% greater than that spent in the illicit market. More Canadians are choosing to purchase cannabis through regulated legal channels as awareness and accessibility continue to expand. Also fueling that trend is the drop in prices, as new supplies from legal indoor and outdoor cultivation operations became available and make products from licensed businesses more price competitive with those of illegal sellers.

 

In Q1 2022, recreational cannabis expenditures grew 23% to C$1,148M and illicit cannabis expenditures dropped by 16% to C$631M as compared to the same time frame in 2021. We also note that expenditure for medical-use cannabis stayed relatively flat at C$124M. Medical cannabis now makes up only 6.5% of the total cannabis bought in Canada. Total expenditure on cannabis was C$1.78B for the quarter or C$19.7M per day.

SOURE: Cannabis Benchmarks, Health Canada

Next, we look at cannabis purchasing in comparison to that of alcohol and tobacco. As we have noted in the past, major alcohol and tobacco companies have made significant investments in large cannabis businesses over the last few years, in part as a hedge to ensure they do not lose out on the latent demand for cannabis that is being captured gradually by legal businesses. The data released by Statistics Canada for Q1 2022 is starting to show that alcohol and tobacco sales are holding steady relative to the emerging cannabis sales. Even though total spending on alcohol, tobacco, and cannabis continues to rise, the portion spent on cannabis has been close to 13% for the past six quarters. This is not the best news for the cannabis industry, which has been hoping to take some of the finite consumer spending power from these recreational categories.

Source: Cannabis Benchmarks, Health Canada

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

10 June 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

June 3, 2022

CANADA CANNABIS SPOT INDEX — June 3, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending June 3, 2022
CCSI image 1 2022-06-03

*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$5.11 per gram this week, up from last week’s C$5.09 per gram. This week’s price equates to US$1,838 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 the latest retail cannabis sales data published by Statistics Canada. The latest release shows cannabis sales increasing by 10.7% from February to March, to reach C$358.8M.  February sales, however, were revised downward to C$324.1M from C$336.4M. Average daily sales have been flat for the past eight months, which is causing concern for the cannabis industry. This overall concern has been amplified after the February 2022 sales figures were revised lower, a trend we continue to see. We raised this issue in a recent report, noting the big changes to past reported figures.

Recreational sales have recently been fairly flat across most provinces, with the exceptions of Ontario and Quebec. Ontario sales continue to grow, with added storefronts bringing new customers to the legal market. Quebec, on the other hand, has seen sales drop sharply since a peak of C$1.79M in daily sales in December 2021.

In general, Quebec’s cannabis sales have been much lower on a per capita basis than the other major Canadian provinces, due largely to its regulatory structure. First, the Quebec government has set the legal age for purchasing and consuming cannabis at 21. Other populous provinces have set the minimum age to purchase and consume cannabis at 18 (Alberta) or 19 (Ontario and British Columbia). This has had the effect of pushing new consumers in Quebec straight into the illicit markets. 

 


Second, Quebec has the lowest number of cannabis retail locations of the major provinces because legal cannabis products can only be sold through government-run Société Québécoise du Cannabis (SQDC) outlets. As of the end of May, we counted a total of 89 stores in Quebec, which is drastically lower than Alberta, a province that boasts 759 stores and only half the population of Quebec.

These added restrictions have likely kept the illegal market robust despite government reports stating otherwise. An October 2021 report published by Quebec’s Health Ministry stated that 70% of all cannabis sales over the previous 12 months occurred through legal channels. This is notably different from the recent report from the Ontario Cannabis Store (OCS), which estimated that 59% of cannabis sales were made in the legal market in the last quarter of 2021.

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

3 June 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

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