How to interpret household cannabis expenditures

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The CCSI was assessed at C$5.53 per gram this week, down 0.8% from last week’s C$5.57 per gram. This week’s price equates to US$2,073 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 dive further into household expenditure data from Statistics Canada, issued quarterly. As noted in the past, major alcohol and tobacco companies have made significant investments in cannabis operations over the last few years. They have made these investments as a hedge, to ensure their current business operations do not lose market share to the growing cannabis usage that is being captured gradually by legal businesses.

So, should traditional players be threatened by the cannabis movement? Data released by Statistics Canada to date shows that alcohol and tobacco sales remain much stronger than cannabis sales, and that increased cannabis sales have only slightly impacted those categories negatively. As seen in the chart below, the overall category of spending related to tobacco, alcohol, and cannabis has grown over the past three years by 15% to C$13.4B. Over 25% of that growth comes from cannabis.

In the chart, Cannabis Benchmarks show the percentage of spending devoted to cannabis. Although cannabis’ share is not significant yet at only 12.6% of total spending, it is an emerging category that continues to expand with new product offerings and a growing consumer base. Cannabis Benchmarks estimate cannabis will grow to 14-15% of total spending by the end of 2021, with accelerated adoption amongst the younger generation and growing accessibility in major provinces such as Ontario.

Source: Canada Cannabis Spot IndexCannabis Benchmarks

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