May 13, 2022

CANADA CANNABIS SPOT INDEX — May 13, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending May 13, 2022
CCSI image 1 2022-05-13

*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$5.20 per gram this week, up 0.4% from last week’s C$5.18 per gram. This week’s price equates to US$1,815 per pound at the current exchange rate.

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This week we examine how legal cannabis sales in Canada have impacted alcohol sales. With the legalization of recreational cannabis in October 2018, some alcoholic beverage companies stated that they feared they would see a reduction in sales, as consumers of legal age may opt to substitute cannabis for alcohol. (In Canada, one must be 18 or older to purchase cannabis; for alcohol, the legal age varies between 18 and 19, depending on the province.) The Canadian government recently released monthly retail sales data for both cannabis and alcohol (beer, wine, and liquor), which gives us a view of whether cannabis has impacted alcohol sales.

 

Below is monthly data from October 2018 through early this year, showing sales of both categories. The chart illustrates that alcohol and cannabis sales were both growing steadily up until 2021. (The spike in alcohol sales in March 2020 was due to bulk buying ahead of COVID-19 lockdowns.) Alcohol sales dropped in early 2021 and leveled off a few months before cannabis sales began to plateau in late summer 2021. That being said, since January 2020, monthly alcohol sales have grown by C$215M to C$2.27B, while cannabis sales grew by a little less – C$182M – to reach C$282M.

With consumers having a finite amount of money to spend in these categories, increased accessibility and education around cannabis has led to a larger proportional expenditure for the new category. As shown in the chart below, cannabis sales’ share of the total dollars spent towards alcohol and cannabis has increased steadily since legalization. Currently, cannabis’ share stands at 12.9% of the total spend of the combined categories.

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

13 May 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved