March 8, 2019

CANADA CANNABIS SPOT INDEX — March 8, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published March 8, 2019

The CCSI once again moved higher this week with a 3.4% gain to C$7.10 per gram, from last week’s C$6.87 per gram. The index is steadily moving higher from a low of C$6.04 hit during the week ending February 15. This week’s price of C$7.10 per gram equates to US$2,412 per pound at current exchange rates.

This week we provide an update on the monthly retail sales by province and territory data released by Statistics Canada. This published dataset now gives us a full glimpse into a complete quarter of post-legalization sales from both the provincial online stores and brick & mortar shops. The initial revenue figures for Q4 2018 are relatively low. December sales across Canada totaled C$55.2M, up 2% over the previous month.

Source: Cannabis Benchmarks, Statistics Canada [Table  20-10-0008-01]

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.

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

8 March 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

March 1, 2019

CANADA CANNABIS SPOT INDEX — March 1, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published March 1, 2019

The CCSI once again moved higher this week by 5.6% to C$6.87/gram. This comes after edging down to the C$6/gram mark only two weeks ago. C$6.87/gram equates to US$2,363/pound at current exchange rates.

 

This week we continue to analyze the dry cannabis sales data from Health Canada’s Cannabis Tracking System. The Q4 2018 data, displayed in the table below, shows steady sales to registered medical patients, but sales to recreational consumers quickly declined after an initial rush immediately subsequent to legalization.

Dry cannabis sales for medical use across Canada remained quite steady over Q4 with an average of 220 kg being sold each day. Recreational sales showed different behaviour. The first 15 days of legalization in October saw an average of 389 kg sold daily, which then dropped to an average of 240 kg in daily sales over the next two months.

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

1 March 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

February 22, 2019

CANADA CANNABIS SPOT INDEX — February 22, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published February 22, 2019

The CCSI jumped back up by 7.7% this week to C$6.51/gram, after hitting a low of C$6.04/gram last week. Last week’s price appears to be an anomaly, perhaps due to potentially lower quality and lower priced product changing hands. This week’s price mean reverted back to the 2-month moving average of C$6.45/gram. C$6.51/gram equates to US$2,232/pound at current exchange rates.


This week we dive a bit deeper in the quarterly earnings reports issued by Canopy Growth and Aurora Cannabis.

 

The Health Canada Cannabis Tracking System report gives us complete view of both medical and recreational sales in the last quarter of 2018. From the latest data issued on Jan 29th, a total of 40,753 kg equivalent was sold across Canada with an almost perfect 50/50 split between the medical and recreational markets during this time period.

 

Using this data as a reference point, we calculate the reported Canopy sales volumes of 10,102 kg equivalent for that timeframe for dried cannabis and extracts to be approximately 40% and 9% of the total Canadian recreational and medical markets, respectively. Aurora, the second-largest producer, came in with a smaller market share of 20% of recreational sales, but a substantially larger share of the medical market at 16%.

 

Both producers also gave some insight into their average net selling prices. Canopy’s average net selling price for dried cannabis in the recreational market was slightly higher than our average index price over Q4, while Aurora’s was more comparable to our price assessments. Canopy and Aurora stated their average net selling prices (net of excise duties) to be C$6.96/gram and C$6.23/gram, respectively. The CCSI averaged approximately C$6.32/gram over Q4 2018 (net of the C$1.15 provincial and federal excise duties estimated by Cannabis Benchmarks [$C7.49 less C$1.15]).   

 

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

22 February 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

February 15, 2019

CANADA CANNABIS SPOT INDEX — February 15, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published February 15, 2019

The CCSI declined 5.4% this week to C$6.04 per gram, from C$6.39 per gram. The index has moved to the lowest point since legalization. C$6.04 per gram equates to US$2,062 per pound at current exchange rates.

 

This week we saw quarterly earnings from the two largest licensed producer, Aurora Cannabis and Canopy Growth. The earning period for both companies end Dec 31st, 2018 cover the first full quarter of legalized Canadian markets. This week, we drill in to the quantity of total dry cannabis sold, and its average net selling price from the top two LPs.

 

Canopy broke out their recreation and medical sales with the addition of recreation sales this quarter. Total volumes of dry and cannabis extract sold increased to 10,102 kg from 2,330 kg reported the previous quarter.  Recreational sales made up 82% of total sales, with dry flower accounting for 62% of total sales. The average net selling prices for dry and cannabis extracts was reported at C$6.96/gram, while medical averaged C$8.49/gram.



Aurora Cannabis kept their numbers at a higher level by lumping medical and recreational sales together. Aurora Cannabis produced 7,822 kg over the quarter with 6,999 kg sold. Digging into the Management Discussion & Analysis we managed to find total recreational dry cannabis sold was 3,500 kg and total cannabis extracts was 306 kg, suggesting that 54% of their production was sold into the newly legalized market. The average net selling prices for dry and cannabis extracts for both the medical and recreational markets was reported to be C$6.23/gram.

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

15 February 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

February 8, 2019

CANADA CANNABIS SPOT INDEX — February 8, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published February 8, 2019

The CCSI moved 2.2% lower this week to C$6.39 per gram, from C$6.53 per gram. The index looks to have found its sweet spot within a narrow C$0.28 range. C$6.39 per gram equates to US$2,196 per pound at current exchange rates.

 

This week we take a deeper look at the final price consumers are paying for dry cannabis products. Each provincial retail structure is set up slightly differently, but ultimately consumers purchase recreational cannabis in pre-rolls or canisters. Unlike products sold in the U.S., Canadian cannabis packaging enforces strict volume and labelling guidelines. The canisters are mainly sold in one gram, 3.5 gram, and 7 gram increments with a strict labelling protocol that includes the producer’s brand, strain information and Health Canada warning labels. Many of the recent supply issues have been attributed to faulty packaging.

For this week’s analysis, we specifically focussed in on the retail price of 14 out of the 80 listed dry cannabis products on the Ontario Cannabis Store (https://ocs.ca/). We chose a variety of products from different licensed producers (LP), varying THC and CBD levels, and assorted flower types (Sativa, Indica, or Hybrids).

 

Of the 14 products, the calculated average selling price for one gram was C$11.66 (inclusive of the 13% retail sales tax) with a range of C$9.25 to C$17.25.

Source: Cannabis Benchmarks, Ontario Cannabis Store

Using our in-house pricing models, we were able to back calculate the average LP’s selling price to C$6.72/gram. This falls roughly inline with the posted CCSI price over the past 7 weeks. Here are the components of our pricing model:

Lastly, we looked at the volume discount customers are given when they buy quantities larger than one gram. For many of the 14 products we analyzed, there were prices listed but no product available in those larger quantities.

 

As can be seen in the chart below, the discount was almost standardized as consumers purchased larger quantities with a 4.9% discount when customer purchased 3.5g, and 9.7% discount when customers purchased 7g.

Source: Cannabis Benchmarks, Ontario Cannabis Store

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

1 February 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved