Weekly Cannabis Commentary

Cannabis Industry Performance

Cannabis Industry Performance

Source: FRC 

Last week, both Canadian and U.S. cannabis stocks fell as a result of the overall weakness in equity markets. Key developments in the sector include:

  • In September, Illinois’ recreational cannabis sales increased 80% YoY to US$122M.
  • Oregon’s regulators recommended that new cultivation licenses be halted as the state is experiencing large declines in cannabis prices due to overproduction. We note that oversupply has impacted both Canadian and U.S. cannabis companies over the past 12 months.

Valuation

As of October 4, 2021, the Canadian big four LPs were trading at a 40% premium (down from 48% in the previous week) over their U.S. peers.

Source: S&P Capital IQ, FRC

The following chart shows the average EV/R of the companies we track in both countries:

Average EV/R

Source: S&P Capital IQ, FRC

Canadian Retail Cannabis Pricing

Source: Online Provincial Cannabis Stores, FRC 

The average retail price per gram fell week-over-week from $11.10 to $11.08. The chart below shows the Canadian retail dried cannabis flower pricing trend:

Canadian Retail Dried Cannabis Flower Pricing

Source: Online Provincial Cannabis Stores, FRC 

Canadian Retail Cannabis Stores

As of October 4, 2021, there are 2,599 retail cannabis stores, a week-over-week increase of 21 stores across Canada, including 24 in Ontario, and one in Alberta. Four stores closed in B.C.

Nationwide Store Count

Source: Provincial Websites, FRC

Source: Provincial Websites, FRC

Weekly Psychedelic Commentary

Psychedelic Industry Performance

Psychedelic Industry Performance

Source: TMX Money, FRC

Weekly Cannabis Commentary:

Source:https://www.researchfrc.com/weekly-cannabis-commentary-104