Weekly Cannabis Commentary

Cannabis Industry Performance

Source: FRC

Last week, Canadian cannabis stocks outperformed their U.S. peers. Key sector developments are listed below:

  •  Statistics Canada reported that cannabis sales grew 67% YoY in August to $186M. This was the sixth consecutive month of record cannabis sales.
  • South Dakota lawmakers introduced a bill to legalize recreational cannabis.
  •  The U.S. Senate released a draft spending bill, indicating a removal of the ban on recreational cannabis sales in the District of Columbia.

Valuation

As of October 25, 2021, the Canadian big four LPs were trading at a 53% premium (up from 40% 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:

Source: S&P Capital IQ, FRC

Source: Online Provincial Cannabis Stores, FRC

The average retail price per gram was flat week-over-week at $11.04. The chart below shows the Canadian retail dried cannabis flower pricing trend:

Source: Online Provincial Cannabis Stores, FRC

Canadian Retail Cannabis Stores

As of October 25, 2021, there are 2,685 retail cannabis stores in Canada, a WoW increase of 32 stores, including 20 in Ontario, five in Alberta, and seven in B.C.

Source: Provincial Websites, FRC

Source: Provincial Websites, FRC

Weekly Cannabis Commentary:

Source:https://www.researchfrc.com/weekly-cannabis-commentary-106