August 26, 2022

CANADA CANNABIS SPOT INDEX — August 26, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending August 26, 2022
CCSI image 1 2022-08-19

*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$5.36 per gram this week, down 0.9% from last week’s C$5.41 per gram. This week’s price equates to US$1,873 per pound at the current exchange rate.

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

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SOURE: Cannabis Benchmarks, Health Canada
  • Statistics Canada recently published unpackaged production data through the end of 2021. The agency had previously released unpackaged production data through September 2021. The latest data shows that, through the end of 2021, total Canadian unpackaged production continued to hover slightly above 2020 levels. For 2021, total unpackaged cannabis production totalled 1.62M kg, or 9.6% more than 2020.
  • Despite several significant cultivators closing growing facilities, as we reported last month, production still increased. This indicates that a sizable portion of the licensed growing area has been grossly underutilized, and that additional closures may be on the horizon. Total licensed indoor growing area dropped by 10% in 2021, according to Statistics Canada
  • While indoor growing facilities close, we see craft growers turning to outdoor cultivation in the cold Canadian climate. Though legal cannabis produced from outdoor cultivation is frequently thought to be of lower quality, it has significantly lower production costs, making it more competitive with illicitly-produced supply. While outdoor-grown cannabis might not be as marketable for smoking compared to indoor-grown flower, cannabis grown outdoors is ideal as a raw material for extraction and the production of cannabis 2.0 products like edibles, beverages, and vapes. In 2021, the reported data shows that the country’s licensed outdoor growing area jumped by 62% year-on-year to peak at 713 acres.
  • Nevertheless, despite the growth in outdoor cultivation, Cannabis Benchmarks estimates outdoor-grown cannabis still makes up a relatively small portion of Canada’s overall cannabis production. Additionally, outdoor cultivation is seasonal, increasing the supply of cannabis in the market in late autumn, which has been shown to impact wholesale prices in U.S. cannabis markets where significant outdoor growing occurs, sometimes dramatically.
  • Cannabis Benchmarks estimates the total Canadian outdoor cannabis cultivation volume in 2021 to be approximately 210,000 kg, or approximately 13% of overall unpackaged production. This proportion is consistent with 2020. As more cannabis is cultivated outdoors, we anticipate that outdoor-grown cannabis will have a significant impact on the landscape of Canadian cultivation.

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

26 August 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

August 19, 2022

CANADA CANNABIS SPOT INDEX — August 19, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending August 19, 2022
CCSI image 1 2022-08-19

*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$5.41 per gram this week, down 0.4% from last week’s C$5.43 per gram. This week’s price equates to US$1,911 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
  • Statistics Canada recently published unpackaged production data through the end of 2021. The agency had previously released unpackaged production data through September 2021. The latest data shows that, through the end of 2021, total Canadian unpackaged production continued to hover slightly above 2020 levels. For 2021, total unpackaged cannabis production totalled 1.62M kg, or 9.6% more than 2020.
  • Despite several significant cultivators closing growing facilities, as we reported last month, production still increased. This indicates that a sizable portion of the licensed growing area has been grossly underutilized, and that additional closures may be on the horizon. Total licensed indoor growing area dropped by 10% in 2021, according to Statistics Canada
  • While indoor growing facilities close, we see craft growers turning to outdoor cultivation in the cold Canadian climate. Though legal cannabis produced from outdoor cultivation is frequently thought to be of lower quality, it has significantly lower production costs, making it more competitive with illicitly-produced supply. While outdoor-grown cannabis might not be as marketable for smoking compared to indoor-grown flower, cannabis grown outdoors is ideal as a raw material for extraction and the production of cannabis 2.0 products like edibles, beverages, and vapes. In 2021, the reported data shows that the country’s licensed outdoor growing area jumped by 62% year-on-year to peak at 713 acres.
  • Nevertheless, despite the growth in outdoor cultivation, Cannabis Benchmarks estimates outdoor-grown cannabis still makes up a relatively small portion of Canada’s overall cannabis production. Additionally, outdoor cultivation is seasonal, increasing the supply of cannabis in the market in late autumn, which has been shown to impact wholesale prices in U.S. cannabis markets where significant outdoor growing occurs, sometimes dramatically.
  • Cannabis Benchmarks estimates the total Canadian outdoor cannabis cultivation volume in 2021 to be approximately 210,000 kg, or approximately 13% of overall unpackaged production. This proportion is consistent with 2020. As more cannabis is cultivated outdoors, we anticipate that outdoor-grown cannabis will have a significant impact on the landscape of Canadian cultivation.

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

19 August 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

August 12, 2022

CANADA CANNABIS SPOT INDEX — August 12, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending August 12, 2022
CCSI image 1 2022-08-12

*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$5.43 per gram this week, up 0.9% from last week’s C$5.39 per gram. This week’s price equates to US$1,924 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
  • Statistics Canada recently released May retail cannabis sales for the country. Sales increased from April by C$2.5M to C$375.8M. To correct for the different number of days per month, we look at the data in terms of average daily sales in the above chart. The latest data shows average daily sales fell to C$12.1M in May, a decrease of 2.6% from April when a record-high figure was established.
  • However, this is the second month we have seen sales hold above the stagnant daily revenues observed from August 2021 through March 2022. In that period, sales were stuck between C$11.2M to C$11.6M per day, all while store counts increased and production variety grew. This raised concerns for the industry by suggesting that sales were reaching a saturation point or average sales prices were falling while sales volumes grew.
  • In May, sales dropped across all provinces from the previous month, with the exception of British Columbia, where sales grew slightly – by 0.5% month-on-month – to C$1.77M per day. All other major provinces saw sales drop by 2.3% – 2.8%.
  • If sales continue at the daily run rate for May, we should exceed C$4.36B in sales for 2022. (That calculation assumes daily sales average of C$12.1M between June and December.) This should paint the low-end expectation for sales this year, as the May figures precede the summer season, which generally sees higher seasonal sales, along with the end-of-year holiday period. Additionally, we continue to see growth in store counts and more online / delivery options, which should continue to pressure the illicit market’s share of total cannabis sales in the country.

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

12 August 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

August 5, 2022

CANADA CANNABIS SPOT INDEX — August 5, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending August 5, 2022
CCSI image 1 2022-08-05

*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$5.39 per gram this week, up 0.8% from last week’s C$5.34 per gram. This week’s price equates to US$1,898 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
  • Statistics Canada recently released May retail cannabis sales for the country. Sales increased from April by C$2.5M to C$375.8M. To correct for the different number of days per month, we look at the data in terms of average daily sales in the above chart. The latest data shows average daily sales fell to C$12.1M in May, a decrease of 2.6% from April when a record-high figure was established.
  • However, this is the second month we have seen sales hold above the stagnant daily revenues observed from August 2021 through March 2022. In that period, sales were stuck between C$11.2M to C$11.6M per day, all while store counts increased and production variety grew. This raised concerns for the industry by suggesting that sales were reaching a saturation point or average sales prices were falling while sales volumes grew.
  • In May, sales dropped across all provinces from the previous month, with the exception of British Columbia, where sales grew slightly – by 0.5% month-on-month – to C$1.77M per day. All other major provinces saw sales drop by 2.3% – 2.8%.
  • If sales continue at the daily run rate for May, we should exceed C$4.36B in sales for 2022. (That calculation assumes daily sales average of C$12.1M between June and December.) This should paint the low-end expectation for sales this year, as the May figures precede the summer season, which generally sees higher seasonal sales, along with the end-of-year holiday period. Additionally, we continue to see growth in store counts and more online / delivery options, which should continue to pressure the illicit market’s share of total cannabis sales in the country.

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

5 August 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

July 29, 2022

CANADA CANNABIS SPOT INDEX — July 29, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending July 29, 2022
CCSI image 1 2022-07-29

*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$5.34 per gram this week, up 1.0% from last week’s C$5.29 per gram. This week’s price equates to US$1,881 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.

The following analysis and commentary are repeated from the July 22, 2022, report.

 

This week we review closures of growing areas by the top Canadian cannabis Licensed Producers (LPs). After the legalization of cannabis in December 2018, the Canadian LPs rushed to build out production capacity, resulting in a heavily overbuilt, oversupplied market. Since January 2020, LPs have continued to shutter indoor, greenhouse, and outdoor operations, with the associated write-offs and lay-offs, in an attempt to right-size operations and improve margins. At some point, the drop in production capacity should help relieve the vast amount of cannabis inventory – both unpackaged and packaged – sitting in warehouses across Canada.

 

The chart below only tracks the operations of the major Canadian cultivators, and in some cases the facilities include a cultivation area and processing / warehouse area.

SOURE: Cannabis Benchmarks, Health Canada

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

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