September 25, 2020

CANADA CANNABIS SPOT INDEX — September 25, 2020

CANADA CANNABIS SPOT INDEX (CCSI) 

Published September 25, 2020
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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$6.18 per gram this week, up 0.8% from last week’s C$6.13 per gram. This week’s price equates to US$2,108 per pound at the current exchange rate.

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Last week, Statistics Canada released retail sales data for July 2020. Sales have been increasing steadily across Canada, but July’s sales growth was explosive. July sales settled at C$231M for the month, which is C$30.5M higher than June 2020 and up C$124M year-over-year. The monthly increase is the largest gain since cannabis was legalized almost two years ago. Our current 2020 legal cannabis sales forecast is C$2.45B, but July’s figures point to an annual run rate of C$2.73B. The prospect of retail sales eclipsing $3B in 2021 looks to have a high probability now.

 

We believe the high level of sales are a result of elevated demand during the summer months, growth in retail outlets in key provinces such as Ontario and British Columbia (BC), more higher value sales opportunities with cannabis 2.0 products, and traditional consumers switching to the safer and regulated legal channels. Apart from seasonal demand trends, the aforementioned developments represent goals that legal cannabis market participants and proponents have been working toward since the opening of the regulated market. 

Source: Cannabis Benchmarks, Statistics Canada

On an average daily basis, July sales were higher across every province. While average daily sales nationwide expanded by 11.5%, increases varied significantly at the provincial level. Of the major provinces, Ontario led the way with a 20% rise in average daily sales and BC saw an increase of 14%. Prince Edward Island (PEI) saw the biggest pop with the province permitting stores to return to normal hours after being shut down as part of the COVID-19 response. 

 

Below is a breakdown by province of movement in average daily sales from June to July. We expect that overall Canadian sales will continue their upward trajectory through the end of the year, although at a slightly lower month-over-month growth rate.

Source: Cannabis Benchmarks, Statistics Canada

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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