CANADA CANNABIS SPOT INDEX — January 11, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published January 11, 2019

 

The CCSI declined another 3.4% this week to C$6.38 per gram, from C$6.60 per gram last week. The index has been steadily dropping over the past 5 weeks. C$6.38 per gram equates to US$2,178 per pound at current exchange rates.

StatsCan analysis found that recreational dried cannabis sold from a licensed supplier sold for C$9.70 per gram on average since legalization. This is drastically higher than the calculated C$6.51 per gram paid by consumers in the still thriving illicit markets. The entire industry is closely watching these prices as legalization was expected to set back the illegal supply while also controlling quality and bringing in tax revenue. Cannabis Benchmarks expects the price of cannabis to continue to drop as the current licensed producers increase business operation efficiencies and add capacity over the next 18 months. This follows a similar trend to that observed in the early years of most recreational U.S. markets.

One of the major Canadian licensed producer, Aurora Cannabis, gave industry watchers some additional insight into how the legalization process has been going so far. On January 8th, Aurora announced guidance for its Q2 2019 results, or quarter ending December 31. These early estimates show revenue of C$50 to C$55 million, net of the excise tax. The guidance indicates C$17 million in recreational sales from the start of legalization (C$20.6 million extrapolated back to the beginning of the quarter), which is lower than analyst estimates. Aurora earnings are scheduled to be released on February 11, 2019.

 

Lastly, up to 8,000 entrants are expected to enter a lottery today for licenses for the first 25 cannabis stores to open in Ontario starting April 1. The licences are being divided regionally, with five going to the east of the province, seven in the west, two in the north, six in the Greater Toronto Area and five in Toronto itself. Recreational cannabis can only be bought through the Ontario government-run website at the moment.

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

11 January 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — January 4, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published January 4, 2019

 

The CCSI declined 0.5% this week to C$6.60 per gram, from C$6.63 per gram last week. The index has dropped 18% over the past four weeks. C$6.60 per gram equates to US$2,204 per pound at current exchange rates.

 

The stability in prices adds some reassurance to the developing industry. Supply shortages are not expected to be resolved quickly, but the Alberta Gaming, Liquor and Cannabis Commission (AGLC) reported that the situation is slowly improving. Even though some producers had stockpiled product ahead of legalization, issues with packaging and logistics prevented product from hitting the marketplace in a timely manner.

 

The halt of new Alberta retail licenses remains in place to ensure current licensees can keep their shelves adequately stocked. Ontario announced it will be accepting entries next week from those looking to enter a lottery to apply for the first 25 retail cannabis licenses in the province. There is a C$75 fee and those selected will have five business days to submit their application, a C$6,000 non-refundable fee and a C$50,000 letter of credit. The short time frame for submittal of applications is to ensure that these operations can be up and running by April 1. The retail licenses will be distributed throughout the province – five to the eastern side of the province, seven to the western side, two in the north, six in the Greater Toronto Area and five in Toronto itself.

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4 January 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — December 28, 2018

CANADA CANNABIS SPOT INDEX (CCSI) 

Published December 28, 2018

 

The CCSI declined 6% this week to C$6.63 per gram, from C$7.08 per gram last week, and is down 15% over the past two weeks. C$6.63 per gram equates to US$2,212 per pound, which places the CCSI at 188% of the U.S. Cannabis Spot Index, currently at US$1,175 per pound.

Wholesale prices in Canada headed lower with supply shortages; howevever, not as extreme as reported in November when AGLC had only 20% of their product delivered and Quebec closed retail locations due to insufficient supply. 

 

Supply shortages still exist, yet inventory on provincial online sites is not as limited as it was in November. AGLC showing nearly 80% of dried flower products available on the online site. Experienced consumers, frustrated with limited quantity, could be turning back to the black market while supply shortages get resolved. One of the contributing factors to the initial supply shortage was incorrect packaging and labeling. Reports from the field indicate that some LPs have been able to resolve these issues. 

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

21 December Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved