Weekly Cannabis Commentary
Author: Sid Rajeev
Cannabis Industry Performance
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.
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.
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 $11.22 to $11.21. The chart below shows the Canadian retail dried cannabis flower pricing trend:
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.
Weekly Psychedelic Commentary
Psychedelic Industry Performance
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.