January 22, 2021

CANADA CANNABIS SPOT INDEX — January 22, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending January 22, 2021
1

*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$5.95 per gram this week, up 1.5% from last week’s C$5.87 per gram. This week’s price equates to US$2,128 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 once again touch on the changing cultivation landscape in Canada. Overbuilt cultivation capacity has forced numerous Licensed Producers (LPs) to close indoor cultivation facilities and scrap plans for future developments. As the cannabis market matures, cultivators realize that price wars are inevitable, just as in any other commodity. With that realization, an increasing number of Canadian cannabis cultivators are shifting production capacity outdoors. Outdoor cultivation has significantly lower operating costs relative to growing indoors or in a greenhouse, including lower infrastructure and labor costs, and no energy costs for lighting, heating, and ventilation.

 

The latest data from Statistics Canada shows outdoor cannabis cultivation capacity expanding at a rapid rate. As of October 2020, there were 576 hectares licensed to grow cannabis outdoors. This is a massive jump relative to the first data point from October 2019. Over the 12 month period, outdoor cannabis cultivation capacity grew by 344 hectares, or 148%. This increase comes as three of the largest indoor and greenhouse producers, Aurora, Canopy Growth, and Tilray, announced closures of large facilities last year along with major inventory write-downs.

 

Source: Cannabis Benchmarks

The next chart takes the same data and standardizes the units to square feet. It is important to note that this chart does not represent a direct comparison of actual cannabis production by each cultivation type, since indoor operations are able to harvest multiple times annually. Additionally, while the dramatic increase in outdoor cultivation capacity – along with plateauing indoor production – points to significant volumes of new supply in the coming years, a greater proportion of indoor production ends up being sold as smokable flower, while significant amounts of outdoor-grown cannabis are devoted to extraction and product manufacturing. The controlled environments of indoor growers enable the production of flower that has greater consistency and aesthetic appeal to consumers looking for smokable product by virtue of sheltering the cultivation process from weather and pest pressures. 

Source: Cannabis Benchmarks

For more data and analytics like this, subscribe to the Cannabis Market Insights report developed in collaboration Nasdaq. This in-depth monthly report provides exclusive data and analysis on the legal cannabis industry, focusing largely on the Canadian cannabis market, as well as the cannabis equities market in the U.S.

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

22 January 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved.

January 15, 2021

CANADA CANNABIS SPOT INDEX — January 15, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending January 15, 2021
1

*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$5.87 per gram this week, down 1.6% from last week’s C$5.96 per gram. This week’s price equates to US$2,095 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 employ our updated expectations for nationwide retail expansion, detailed in last week’s report, to recalculate sales revenue projections for 2020 and 2021. We projected that by the end of 2021 Canada will be home to 2,540 physical cannabis storesThis figure would represent an increase of 1,171 licensed shops compared to the end of 2020, but still falls short of our optimal projected level of 4,638 storesThat being said, the large number of additional new retailers, mainly in Ontario, will add tremendously to Canada’s overall cannabis sales figures.

 

 

The latest data from Statistics Canada shows October 2020 sales at C$270M. This new monthly record is up C$13.0M from the month prior and C$140M from the same month last year. This level of sales was achieved with 1,225 stores. If the number of retailers continues to expand at the rate we anticipate, monthly sales will easily cross C$300M early this year.

 

Below is our monthly Canada-wide cannabis sales projection through the end of 2021. We expect to conclude 2021 with a record monthly sales level of C$345M in December.

Source: Cannabis Benchmarks

All in all, the legal industry is steadily growing and becoming more established. With our new store count projection, we recalculated our complete 2020 and 2021 sales projections. We now expect cumulative 2020 sales totaling C$2.6B and cumulative 2021 sales totaling C$3.8B. The 2021 sales represent a 46% increase from 2020.

Source: Cannabis Benchmarks

For more data and analytics like this, subscribe to the Cannabis Market Insights report developed in collaboration Nasdaq. This in-depth monthly report provides exclusive data and analysis on the legal cannabis industry, focusing largely on the Canadian cannabis market, as well as the cannabis equities market in the U.S.

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

15 January 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved.

January 8, 2021

CANADA CANNABIS SPOT INDEX — January 8, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending January 8, 2021
1

*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$5.96 per gram this week, down 1.9% from last week’s C$6.08 per gram. This week’s price equates to US$2,121 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 provide an update on store counts nationwide. This is a very important metric to track, as each new store contributes to higher sales. The better accessibility of recreational cannabis will help reduce consumer spending in illicit supply chains and further establish cannabis as a customary part of Canadian society.

 

The Canadian cannabis industry has continued to open new retail outlets across the country at a strong pace. As of the end of December, we counted 1,369 licensed retailers, with an average monthly growth rate of 6.0% in 2020. December saw one of the largest individual monthly growth rates last year with 93 new stores, or 7.3% more than the month before. This growth rate continues to be very consistent, which gives us confidence that the cannabis industry will continue to expand at a stable rate in 2021.

 

In the chart below we show our expectations for store count growth throughout 2021. We forecast that Canada will end 2021 with 2,540 stores across the country. At the national level, the increase in store counts looks to be growing linearly, but drilling down into each province shows a very different picture.

Source: Statistics Canada, Cannabis Benchmarks

We expect Alberta store counts to plateau in late summer and even start to decrease in the latter part of the year as the province begins to exceed its saturation point. Store counts in BC and Quebec are expected to increase at a modest rate, while Ontario’s are projected to expand at a higher rate based in part on recent announcements by regulators that we have covered previously.

Source: Statistics Canada, Cannabis Benchmarks

Our final projected 2021 store count of 2,540 is still quite far from the optimal level we calculated in previous reports. We have previously estimated that Canada will require 4,638 stores to reach a per capita store count that lies between two of the more mature legal cannabis markets in the U.S.: Colorado and Oregon. In Colorado, there is one recreational retailer per roughly 9,600 residents. In Oregon, there is one legal store for about every 6,150 people. 4,638 stores will get Canada to one legal store per 8,000 people.

 

We do not expect store counts to reach that level until 2024.

For more data and analytics like this, subscribe to the Cannabis Market Insights report developed in collaboration Nasdaq. This in-depth monthly report provides exclusive data and analysis on the legal cannabis industry, focusing largely on the Canadian cannabis market, as well as the cannabis equities market in the U.S.

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

08 January 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved.

December 23, 2020

CANADA CANNABIS SPOT INDEX — January 1, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending January 1, 2021
1

*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$6.08 per gram this week, up 0.4% from last week’s C$6.05 per gram. This week’s price equates to US$2,145 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.

Last week, Statistics Canada released retail sales data for October 2020. The trend of steadily-increasing national sales totals continued. October sales finished the month at C$270 million, C$13M higher than September 2020 and up C$140M year-over-year. October’s figures point to an annual run rate of C$3.2 billion. We believe that this number will surely be eclipsed before Q3 2021 ends, due largely to what is anticipated to be a rapid increase in storefronts in Ontario.

Source: Statistics Canada, Cannabis Benchmarks

On an average daily basis, October sales were higher across every major province except for British Columbia. While average daily sales nationwide expanded by 1.7%, sales growth varied significantly at the provincial level. Of the major provinces, Ontario has been consistently outperforming all others in daily sales growth. Ontario led the way with a 4.1% rise in average daily sales, while British Columbia saw a decrease of 0.5%. 

Source: Statistics Canada, Cannabis Benchmarks

For more data and analytics like this, subscribe to the Cannabis Market Insights report developed in collaboration Nasdaq. This in-depth monthly report provides exclusive data and analysis on the legal cannabis industry, focusing largely on the Canadian cannabis market, as well as the cannabis equities market in the U.S.

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

01 January 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved.

CANADA CANNABIS SPOT INDEX — December 25, 2020

CANADA CANNABIS SPOT INDEX (CCSI) 

Published December 25, 2020
1

*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$6.05 per gram this week, down 2.4% from last week’s C$6.20 per gram. This week’s price equates to US$2,140 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 body that regulates the province’s cannabis market, released their Q2 Cannabis Insights report for the period from July through September 2020. The report contains a wide variety of useful data to show how Ontario’s market is developing. In today’s report, we focus specifically on price. 

 

The legal Canadian cannabis market has faced strong competition from illicit supply chains, due to high product prices and few stores. The OCS’s latest report shows those market dynamics are changing.

The report shows that not only did the brick and mortar retail footprint grow to 178 stores from 100, but the price of dried flower on the OCS online store dropped by 9%, falling further below the price of cannabis sold through illegal mail-order marijuana (MoM) sites after doing so in Q1 for the first time. The average price of legal dried flower, including sales taxes, was C$6.41/gram. The reduction was largely a result of discount lines of cannabis released by the big Licensed Producers. In comparison, the average dried flower price on illegal MoM sites rose by C$0.19 to C$7.98/gram. While the quality of the dried flower was not taken into consideration for this price comparison, legal product has some overall advantages in this regard due to required quality assurance and safety testing, prohibitions on pesticide use, and standards for accuracy in labeling, among other regulations.

 

Source: OCS

Clearly, lower prices have helped legal sellers build market share. The report indicates 36.2% of cannabis sales are now being made through legal channels. We believe that, along with lower prices, COVID lockdowns have pushed consumers to more regulated and inspected products. 

 

Overall, this report once again emphasizes that positive trends for the legal cannabis industry are emerging and being cemented as the regulated market develops.

For more data and analytics like this, subscribe to the Cannabis Market Insights report developed in collaboration Nasdaq. This in-depth monthly report provides exclusive data and analysis on the legal cannabis industry, focusing largely on the Canadian cannabis market, as well as the cannabis equities market in the U.S.

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

25 December 2020 Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved.