Weekly Cannabis Commentary:

Author: Sid Rajeev, Iftekhar Mahmud and Lavish Ramrakhani 

Cannabis Industry Performance

Cannabis Industry Performance

Source: TMX Money, FRC

Note: MCAN and XCAN was launched on November 18, 2019 and January 20, 2020, respectively.

Over the past week, the Horizons Marijuana Life Sciences ETF (TSX: HMMJ / “HMMJ”), the Standard & Poor’s/MX International Cannabis Index (“MCAN”), and the Standard & Poor’s/TSX Cannabis Index (“XCAN”) generated a return of -6%, -9%, and -7%, respectively, with all stocks having negative returns across the board. Some of the negative reaction in the market could be traced to Canopy laying off workers for the second time in three months.

Valuation of Select Canadian LPs

The following shows the average Enterprise Value to Revenue (“EV/R”) of the Canadian cannabis companies that we track.

Average EV/R (October 2019 – September 2020)

Source: S&P Capital IQ, FRC

Source: S&P Capital IQ, FRC

The average EV/R, as of September 8, 2020, is 7.5x – a decrease from 8.3x a week ago. The average EV/R, from October 7, 2019, to date, is 11.7x.

Canadian Retail Cannabis Pricing

Source: Online Provincial Cannabis Stores, FRC

The average retail price per gram decreased marginally week-over-week to $11.05.

The chart below shows Canadian retail dried cannabis flower pricing since we began price coverage.

Canadian Retail Dried Cannabis Flower Pricing

Source: Online Provincial Cannabis Stores, FRC

Canadian Retail Cannabis Stores

As of September 8, 2020, there are 1,112 retail cannabis stores across Canada – increasing by five over the previous week’s reported figure.

Number of Stores in Canada

Source: Provincial Websites, FRC

Canadian Retail Cannabis Stores by province

Source: Province Websites, FRC

All of the new stores were in B.C., the province with the second most cannabis retail stores

Weekly Cannabis Commentary:

Source: https://www.researchfrc.com/weekly-cannabis-commentary-48/