How to interpret the supply and demand dynamics for cannabis 2.0 products

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

The Canada Cannabis Spot Index was assessed at C$5.96 per gram this week, up 0.6% from last week’s rate of C$5.92 per gram. This week’s price equates to US$2,041 per pound at the current exchange rate.

This week, Cannabis Benchmarks examine supply and demand dynamics for cannabis 2.0 products in Canada’s legal market, specifically edibles and extracts.

Health Canada data for October 2019, when such products were first allowed to be sold, through July 2020 shows a situation similar to that which occurred with dried flower in 2019. Production of edibles and extracts has outpaced consumption, leading to expanding inventory and write-downs. Based on available data, as of July there was over six months worth of edibles supply in inventory and over seven months worth of supply of unsold extracts, based on July demand levels.

Additionally, there are gaps in the data that Cannabis Benchmarks has dubbed “unaccounted” inventory, suggesting that the overhang of unsold edibles and extracts may be even larger.

Source:Canada Cannabis Spot IndexCannabis Benchmarks

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