Weekly Cannabis Commentary
Author: Sid Rajeev
Cannabis Industry Performance
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.
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.
The following chart shows the average EV/R of the companies we track in both countries:
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 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.
Weekly Psychedelic Commentary
Psychedelic Industry Performance
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.