CANADA CANNABIS SPOT INDEX — July 26, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published July 26, 2019

*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$6.92 per gram this week, down 2.2% from last week’s C$7.07 per gram. This week’s price equates to US$2,391 per pound at current exchange rates.

This week we examine newly released May sales figures from Health Canada. The government’s official Cannabis Tracking System data shows sales of both dry cannabis and oils increasing over the past couple of months. 

 

Total sales of non-medical dried cannabis in May increased by 11.8% from April, to 252 kg/d. Sales of medical dried cannabis in May decreased by 22.8% to 55 kg/d after a momentary burst in demand in April.

Source: Health Canada, Cannabis Benchmarks

Total sales of cannabis oils continue to expand as customers become more comfortable with this new product category, with increasing availability also contributing to the rise. Both non-medical and medical cannabis oil sales volumes increased in May by 15% from April, to 132 L/d and 183 L/d, respectively.

Source: Health Canada, Cannabis Benchmarks

The recent growth has been encouraging for an industry that is still educating Canadians to become more accustomed to cannabis as a recreational pastime and medical alternative. The ultimate goal of such efforts has always been to move customers away from the robust illicit market to the newly created legal framework, but progress on this front has been slow. 

 

The main culprits impeding consumers from the country’s legal market are lack of retail locations, lack of product quality and variation, and price. An example of how more retail outlets increase access to the regulated market and promote sales can be seen in the chart below. Specifically in regard to Ontario’s retail sales revenues, the growth reported in April and May can be attributed to additional storefronts opening their doors across the province. Retail sales in Ontario in May were almost triple the average monthly revenues documented in Q1.

 

Source: Health Canada, Cannabis Benchmarks

We expect these sales figures to continue to increase as Ontario’s government moves from 25 retail locations today to authorizing an additional 50 cannabis retail stores starting in October. This will coincide with the introduction of oils, edibles, and vapes, which will increase the variety of product available and presumably boost sales further. With such major shifts to the market landscape on the horizon, both nationally and in various provinces, Q4 of this year looks as if it will be a very interesting period for Canadian cannabis.

*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..

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

26 July 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

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