Weekly Cannabis Commentary

Author: Sid Rajeev

Cannabis Industry Performance

Cannabis Industry Performance July 5, 2021

Source: FRC

Last week, Canadian cannabis stocks underperformed relative to their U.S. peers due to positive developments for the U.S. medical cannabis sector.

  • South Dakota added eight new conditions for which medical cannabis can be recommended, which will drive new business to dispensaries.
  • Pennsylvania changed their medical cannabis laws to allow patients to purchase up to three times more cannabis per visit.
  • North Carolina’s senate voted in favor of a bill to legalize medical cannabis.

Valuation

As of July 5, 2021, the Canadian big four LPs were trading at a 115% premium (down from 128% in the previous week) over their U.S. peers. The valuation gap diminished due to more favorable developments in the U.S.

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 $11.23 to $11.22. 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 July 5, 2021, there are 2,236 retail cannabis stores, a week-over-week increase of 40 stores across Canada, including 23 in Ontario and eight in Manitoba.

Nationwide Store Count

Source: Provincial Websites, FRC 

Canadian Retail Cannabis Stores

Source: Provincial Websites, FRC

Weekly Psychedelic Commentary

Psychedelic Industry Performance

Psychedelic Industry Performance

Source: TMX Money, FRC

On June 29, 2021, the California senate approved a bill to legalize possession of psychedelics. The bill decriminalizes the possession, or sharing of psychedelics including psilocybin, DMT, ibogaine, LSD, and MDMA for adults 21 and older. We will be initiating coverage on Universal Ibogaine, which is going public shortly through an RTO.

Weekly Cannabis Commentary:

Source: https://www.researchfrc.com/weekly-cannabis-commentary-91