January 8, 2021

CANADA CANNABIS SPOT INDEX — January 8, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending January 8, 2021
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*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.

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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.

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