CANADA CANNABIS SPOT INDEX — May 17, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published May 17, 2019

The CCSI declined by 7.8% to C$6.96 per gram this week, from last week’s C$7.55 per gram. After a momentary uptick last week, prices returned to levels observed throughout April and May. This week’s price equates to US$2,346 per pound at current exchange rates.

 

After a challenging start to the legalization of dry cannabis last year, major licensed producers (LPs) are better prepared for the upcoming launch of vapes and edibles. While supply shortages and the slow opening of retail cannabis stores set the new industry off to a slow start, conditions might be different for phase two of the Canadian cannabis market with strong consumer demand for vapes and edibles. The official launch date has not been released, but it has been stated that these new product categories will commence sometime before October 17, 2019.

 

 

On Tuesday, one of the largest LPs, Aurora Cannabis, stated in its earnings call that it is working towards reducing its production cost while building inventory for the launch of edibles and vaping products. It is doing so by controlling costs and taking advantage of economies of scale as it makes strides towards its goal of building out a production capacity of 625,000 kg/year of dry cannabis.

 

With the start of the Edmonton Aurora Sky and Bradford facilities, Aurora’s production has increased to 150,000 kg and they have brought their cost per gram of dried product down to $1.42 from $1.92. The company anticipates continued reduction in its production and manufacturing costs with an expectation of it trending below $1 per gram. It should be noted that their average net selling price was also down to $6.40 from $6.80 per gram.

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

17 May 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — May 10, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published May 10, 2019

The CCSI moved higher by 6.5% to C$7.55 per gram this week, from last week’s C$7.09 per gram. This is the first week since the one ending March 1st that we have observed price movement of a magnitude greater than 5%. This week’s price equates to US$2,546 per pound at current exchange rates.

 

This week we take a look at cannabis usage in Canada during the first quarter of 2019. Statistics Canada conducts the National Cannabis Survey each quarter to assess changes in demand amongst Canadians as recreational cannabis supply and availability increases. The survey reports 5.3 million or 18% of Canadians aged 15 years and older reported using cannabis in the last three months. This was 27% higher than the previous quarter, with 646,000 new individuals reporting cannabis use for the first time in Q1 2019. Initial data from the survey also indicates that more users obtained cannabis from the legal markets. An estimated 47% of cannabis users or 2.5 million Canadians obtained cannabis from legal sources in the first three months of 2019.

Cannabis use continued to be higher among males than females.

Alberta took the top spot for cannabis usage with 22% of the population buying either legal or illegal cannabis. Ontario and British Columbia followed closely, with Quebec showing the lowest usage.

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

10 May 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — May 3, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published May 3, 2019

The CCSI moved higher by 1.4% to C$7.09 per gram this week, from last week’s C$6.99 per gram. It appears price volatility has diminished as Canada’s market starts to work out supply issues. This week’s price equates to US$2,393 per pound at current exchange rates.

 

This week we take a look at retail sales by province. This data, which is released monthly by Statistics Canada, reports total cannabis store sales. We assume this includes both online and brick and mortar sales.

 

With five months of data now available, total sales each month have hovered around C$54 million, or C$1.8 million per day across Canada. February data shows a downturn in sales in almost every province except Quebec, Manitoba, and British Columbia. The largest drop was experienced in Newfoundland and Labrador where total sales plunged 28% compared to January.

Looking specifically at the distribution of February sales by province, we can see that Ontario, Quebec, and Alberta lead the way in sales, accounting for 63% of the retail cannabis revenues generated nationwide. This should be no surprise as these three provinces are home to 73% of Canada’s population.

Interestingly, licensed retailers in British Columbia, the third most populous province, generated only 4% of total Canadian sales in February. This discrepancy indicates that the black market is still capturing much of the province’s demand.

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

3 May 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved