Weekly Cannabis Commentary
Author: Sid Rajeev
Cannabis Industry Performance
Cannabis stocks across the U.S. and Canada pulled back amid overall weakness in equity markets. U.S. cannabis stocks declined despite the unveiling of a federal cannabis legalization bill. The bill, deemed to remove cannabis as a controlled substance and legalize marijuana on a federal level, has yet to receive sufficient votes to pass into law.
As of July 19, 2021, the Canadian big four LPs were trading at an 89% premium (down from 93% in previous week) over their U.S. peers. The gap is narrowing as U.S. cannabis stocks have been outperforming their Canadian peers in recent weeks.
The following chart shows the average EV/R of the companies we track in both countries:
The average retail price per gram was flat week-over-week at $11.21. The chart below shows the Canadian retail dried cannabis flower pricing trend:
Canadian Retail Cannabis Stores
As of July 19, 2021, there are 2,337 retail cannabis stores, a week-over-week increase of 81 stores across Canada, including 63 in Ontario. Rising competition due to increasing store-count is driving down margins of retailers in ON.
Weekly Psychedelic Commentary
Psychedelic Industry Performance
Last week, Numinus Wellness (TSXV: NUMI) announced they have received Health Canada approval to begin their study on treating individuals suffering from PTSD using MDMA assisted therapy.