Weekly Cannabis Commentary
Author: Sid Rajeev, Iftekhar Mahmud
Cannabis Industry Performance
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)
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
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 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.
The following shows the number of retail cannabis stores by province/territory.