How to understand the gap between supply and demand in the Canadian cannabis market

2 mins read

The CCSI was assessed at C$5.86 per gram this week, up 0.3% from last week’s C$5.84 per gram. This week’s price equates to US$2,132 per pound at the current exchange rate.

Each week, Business of Cannabis delivers a series of insights from our partners at Cannabis Benchmarks®.

This week, Cannabis Benchmarks provides an update on the still-growing gap between supply and demand in Canada’s legal cannabis market.

Cannabis Benchmarks estimates that the total implied demand for legal cannabis in December 2020 was 30,318 kg. Despite increasing 212% year-over-year, December’s demand figure is less than 18% of the 165,189 kg of unpackaged production reported by Statistics Canada for November 2020. Total packaged and unpackaged inventory amounted to 1,165,725 kg as of November 2020, according to Statistics Canada, representing 38 months of supply at current demand levels. While some of this inventory will be drawn down by domestic demand and via exports to other countries, some product may degrade to a point where it is not sellable.

Seasonal supply from outdoor harvests, which typically take place in October and November, is amplifying the growing supply-demand imbalance.

Statistics Canada’s data shows a noticeable increase in the amount of inventory generated in those months in 2019, with the supply surge more pronounced in October and November 2020 as the country’s outdoor production capacity expanded last year.

Source: Canada Cannabis Spot IndexCannabis Benchmarks



Previous Story

How to compare cannabis pricing in Ontario

Next Story

A look at daily retail cannabis sales

0 $0.00