Weekly Cannabis Commentary

Author: Sid Rajeev, Iftekhar Mahmud

Cannabis Industry Performance

There were no major developments in the industry last week. Recently released Statistics Canada data showed declines in illicit cannabis’ market share, amid a significant increase in the number of retail cannabis stores across the country. At the end of 2020, legal cannabis’ market share was 56% vs 50% in Q3.

Valuation
As of May 21, 2021, the big four Canadian LPs are trading at a 122% premium (up from 109% in the previous week) over their U.S. peers. We note that the premium widens when there is positive sentiment in the cannabis sector.

The following chart shows the average EV/R of the companies we track in both sectors:

Average EV/R (October 2019 - May 2021)

Source: S&P Capital IQ, FRC

Canadian Retail Cannabis Pricing

Source: Online Provincial Cannabis Stores, FRC

The average retail price per gram stayed the same week-over-week at $11.27. The chart below shows the Canadian retail dried cannabis flower pricing trend:

Canadian Retail Dried Cannabis Flower Pricing

Source: Online Provincial Cannabis Stores, FRC

Canadian Retail Cannabis Stores

As of May 25, 2021, there are 2,004 retail cannabis stores, a WoW increase of 49 stores across Canada, with 44 in Ontario, four in Manitoba, and one in B.C.

Source: Provincial Websites, FRC

Weekly Psychedelic Commentary

Psychedelic Industry Performance

Over the past week, PSYK was down 1%.

Weekly Cannabis Commentary:

Source: https://www.researchfrc.com/weekly-cannabis-commentary-85