Weekly Cannabis Commentary

Author: Sid Rajeev, Iftekhar Mahmud

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.

In the past week, the cannabis market corrected slightly following a week of significant sector-wide price gain due to optimism around a Democratic victory in the U.S. elections. 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 3%, -3%, and -2%, respectively.

Valuation of Select Canadian LPs

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

Average EV/R (October 2019 – November 2020)

Average EV/R (Nov 9, 2020 - November 16, 2020)

The average EV/R, as of November 16, 2020, is 13.7x – a decrease from 16.0x a week ago. The average EV/R, from October 7, 2019 to date, is 11.56x.

Canadian Retail Cannabis Pricing

Canadian Retail Cannabis Pricing on November 17

Source: Online Provincial Cannabis Stores, FRC

The average retail price per gram decreased by $0.01 week-over-week to $10.99. The below chart 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 November 16, 2020, there are 1,261 retail cannabis stores, a week-over-week increase of 23 stores across Canada, including 18 in Ontario, four in Alberta, and one in B.C.

Nationwide Store Count

Source: Provincial Websites, FRC

The following shows the number of retail cannabis stores by province/territory.

Number of retail cannabis stores by province/territory November 17,2020

Source: Provincial Websites, FRC

Weekly Cannabis Commentary: