Weekly Cannabis Commentary

Author: Sid Rajeev

Cannabis Industry Performance

Cannabis Industry Performance

Source: FRC

Last week, U.S. cannabis stocks outperformed their Canadian counterparts amid positive developments:

  • The state of Missouri posted record revenue from medical cannabis sales in June.
  • A report put forth by the Cannabis Freedom Alliance, an advocacy group endorsed by the Koch family, issued a report with recommendations for federally legalizing marijuana.
  • Trulieve (CSE: TRUL) announced the start of cultivation at a 100,000 sq. ft. facility in West Virginia, and closed the acquisition of three new dispensaries in Pennsylvania.

Valuation

As of July 12, 2021, the Canadian big four LPs were trading at a 93% premium (down from 115% in 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 $11.22 to $11.21. 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 12, 2021, there are 2,256 retail cannabis stores, a week-over-week increase of 20 stores across Canada, including 13 in Ontario, and two in Manitoba.

Nationwide Store Count

Source: Provincial Websites, FRC

Source: Provincial Websites, FRC

Weekly Psychedelic Commentary

Psychedelic Industry Performance

Psychedelic Industry Performance

Source: TMX Money, FRC

The psychedelic industry is experiencing a newfound renaissance as investors are beginning to acknowledge the advantages of psychedelic drugs in treating mental health conditions. Recent developments include: California senate’s approval to legalize possession of psychedelics, Atai Life Sciences’ (NASDAQ: ATAI) IPO, and a report highlighting the benefits of treating depression with psilocybin, published by the New England Journal of Medicine.

Weekly Cannabis Commentary:

Source: https://www.researchfrc.com/weekly-cannabis-commentary-92