Weekly Cannabis Commentary

Author: Sid Rajeev

Cannabis Industry Performance

Cannabis Industry Performance

Source: FRC

Last week, Canadian and U.S. cannabis stocks were down 5% and 4%, respectively, amid the overall market weakness post the Fed’s meeting.  On a positive note, a new research study, published today by the Dalhousie University Agri-Food Analytics Lab (AAL), found that the number of Canadians buying cannabis solely from legal outlets has doubled since 2019 (38% vs. 60%).

Valuation

As of June 21, 2021, the Canadian big four LPs were trading at a 135% premium (up from 120% in previous week) over their U.S. peers. We continue to believe this valuation gap will diminish as the U.S. moves closer to legalization.

Valuation - the Canadian big four LPs

Source: S&P Capital IQ, FRC 

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

Average EV/R

Source: S&P Capital IQ, FRC

 

Canadian Retail Cannabis Pricing

Source: Online Provincial Cannabis Stores, FRC

The average retail price per gram fell week-over-week from $11.24 to $11.23. 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 June 21, 2021, there are 2,140 retail cannabis stores, a week-over-week increase of four stores across Canada.

Nationwide Store Count

Source: Provincial Websites, FRC

Weekly Psychedelic Commentary

Psychedelic Industry Performance

Psychedelic Industry Performance

Source: TMX Money, FRC

On June 18, 2021, Atai Life Sciences (NASDAQ: ATAI), a biotech company backed by investor Peter Thiel and involved in the research of psychedelic use in mental health treatments, went public on the NASDAQ raising US$225M at US$15/share. We believe deals like this will continue to attract investors to the sector.

Weekly Cannabis Commentary:

Source: https://www.researchfrc.com/weekly-cannabis-commentary-89