Weekly Cannabis Commentary

Author: Sid Rajeev

Cannabis Industry Performance

Source: FRC 

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.

Valuation

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.

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 was flat week-over-week at $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 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.

Nationwide Store Count

Source: Provincial Websites, FRC

 Weekly Psychedelic Commentary

Psychedelic Industry Performance

Source: TMX Money, FRC

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.

Weekly Cannabis Commentary:

Source:https://www.researchfrc.com/weekly-cannabis-commentary-93