Weekly Cannabis Commentary
Author: Sid Rajeev, Iftekhar Mahmud
Over the past week, Canopy (TSX: WEED) announced it will be acquiring Supreme (TSX: FIRE) for $435M. The deal implies an EV/R of 9x, which is lower than the industry average of 18x, and 11x of the Apria (TSX: APHA) – Tilray (NASDAQ: TLRY) deal. As all other large Canadian cannabis players have announced M&A deals in 2021, we expect Aurora (TSX: ACB) and Cronos (TSX: CRON) to seek similar opportunities in the near term.
As of April 9, 2021, the Canadian big four LPs were trading at a 109% premium (down WoW from 119%) over their U.S. peers.
The following chart shows the average EV/R of the companies we track in both sectors:
The average retail price per gram remained the same week-over-week at $11.32. The chart below shows Canadian retail dried cannabis flower pricing since we initiated price coverage.
Canadian Retail Cannabis Stores
As of April 12, 2021, there are 1,808 retail cannabis stores, a week-over-week increase of 10 stores across Canada, with four each in B.C. and Saskatchewan, and two in Manitoba.
Weekly Psychedelic Commentary
Psychedelic Industry Performance
Over the past week, PSYK stayed flat. There was no significant news in the industry last week.