Weekly Cannabis Commentary
Cannabis Industry Performance
Last week, U.S. cannabis stocks outperformed Canadian stocks as Ohio lawmakers introduced a bill to legalize recreational cannabis, while Mississippi lawmakers submitted a draft proposal for medical marijuana legalization.
As of August 3, 2021, the Canadian big four LPs were trading at an 87% premium (down from 94% in the previous week) over their U.S. peers. We continue to believe the valuation gap will diminish as the U.S. moves closer to federal legalization.
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 $11.19 to $11.16. The chart below shows the Canadian retail dried cannabis flower pricing trend:
Canadian Retail Cannabis Stores
As of August 3, 2021, there are 2,354 retail cannabis stores, a WoW increase of three stores across Canada. We are noticing a decline in weekly new openings, especially after news of declining margins of retailers in ON amid rising competition. Based on a population to store ratio, we believe there is room for at least 1,500 more stores across the country.
Weekly Psychedelic Commentary
Psychedelic Industry Performance