Cannabis Legalization: Canada Day One Analysis

Introduction

Congratulations Canada, the numbers are in and day one of legal cannabis was a roaring success! In Ontario the nation's most populated province, 38,000 orders were processed in the first hours alone. Reports from Quebec state 42,000 orders were processed in-store and online throughout the day. At Headset, we work to track sales at the SKU (product) level through our retailer integrations and while we're eagerly waiting to see what products and brands are the biggest winners from a sales perspective, we wanted to publish a quick analysis of what we saw on day one.

This is specifically a Day 1 analysis, and Day 30 or Day 365 will look very different. For a new market opening, the limited representation of brick-and-mortar stores is par for the course based on what we've seen with market launches in the US — but the addition of e-commerce is a new variable that is an exciting trend. We are eager to augment our services with the transaction data we're currently gathering and will have more to share on that front soon..

Methodology

We looked at each provinces e-commerce implementation to better understand pricing, availability and assortment. Through this analysis we are able to find things like significant price variations across provinces, different brands, category and product allocations. We also take a deeper dive into the leading LPs. Stay tuned for a more formal analysis that will include transaction data in the coming weeks. At Headset, this is just the start of our Canada analytics reporting and if you’re interested in more, please get in touch at info@headset.io or find us online at www.headset.io

Pricing Analysis

Average price per gram varies by province with lowest prices found in Quebec and highest prices found in Ontario and Alberta. Oils see a similar trend with Ontario having the highest prices per mL and NB having the lowest.

Pricing Analysis

Price per gram in Flower declines with package size (there is a discount for larger package sizes) with the average price per gram for a 15gram package being almost 25% cheaper at $8.75/gram (compared to $11.45/gram for 1 gram packages).

Brand and Product Totals

Currently there are a limited number of brands available with only 11 in Quebec and 12 in New Brunswick. Consumers in British Columbia can expect more competition among brands with 37 different brands available in their market. Consumers can expect a wide selection of products with 83 available in Alberta to 293 products available in British Columbia.

Total Products by Category

The majority of products in each province are Flower with between 75% and 90% of products being Flower. Only British Columbia, Newfoundland & Labrador, Nova Scotia offer capsules and Alberta has only 1 Oil.

Product Assortment by Strain Dominance

Indica is the most popular strain in all provinces except Alberta (where Sativa has 50% more products). CBD products make up a larger portion of the Flower products in both Quebec and New Brunswick. British Columbia has a more distributed selection with over 30 products available in each segment. Package sizes vary with the most common package size being 3.5 grams. Not all provinces offer all package sizes with Quebec not offering 7 gram package sizes and British Columbia not offering 7 or 15 gram sizes

Strain Variety by Province

Consumers can expect to have many different strains to choose from with consumers in British Columbia seeing 86 strains available. The most popular strains (available in at least 3 provinces) are: Tangerine Dream, Pink Kush, Cabaret, Temple, Purple Chitral, Lemon Skunk, Great White Shark, Delhaize, Campfire, Blueberry Seagal, Blue Dream, Banana Split, Balanced, 50.

Brand Category and Province Coverage

Categories available day one include Flower, Milled Flower, Pre-rolls, and Oils. Brands do not show much category diversification with most brands offering products in only one category (67%). Less than 5% of brands have products in 4 different categories. Nearly half of brands are available in more than one province. Available in four of the five provinces are: Tweed, Liiv, and DNA Genetics.

Analysis of the Big Four: Canopy Growth, Aurora, Aphria and Tilray (High Park)

There are a number of large LPs, but none capture the media cycle as much as Canopy, Aurora, Aphria and Tilray. Looking at the day one data, we want to answer the question of how well positioned are each one of these operators as they transition into the now legal adult-use market in Canada.

Deep Dive: Canopy Growth

Canopy Growth brings over their well established brands from the medical market to adult-use. From home-grown brands like Tweed to the new Plain Packaging, a value priced brand with ‘plain’ packaging. In addition they’ve brought over renowned seed company brand DNA Genetics and celebrity brand Leaf's by Snoop (LBS).

Deep Dive: Canopy Growth

Close to 50% of all product allocation goes to Newfoundland & Labrador and Nova Scotia -- both provinces where Canopy commands are large amount of shelf space. They are less represented in markets like Quebec and Ontario. SKUs by brand is relatively evenly split, with DNA having the smallest number of products in their portfolio.

Deep Dive: Aurora

Of the big four, Aurora comes to market with the smallest number of distinct brands. Aurora made some big news on the merger with Med Releaf and managed to bring over some brands to the adult-use market by extension. Brands such as AltaVie and San Rafael ‘71 target different audiences and that’s represented in the data we see in areas like price vs. max THC shown below.

Deep Dive: Aurora

The Aurora brand products account for the largest selection of Aurora (LP) SKUs across the different provinces. Within the different provinces Aurora has the largest allocation of different SKUs in Quebec and British Columbia.

Deep Dive: Aphria

Aphria goes to market in Canada with the broadest assortment of distinct brands from Broken Coast Cannabis to Good Supply, Good fields ,RIFF and Solei. In addition to brand coverage Aphria also is represented well across the different provinces.

Deep Dive: Aphria

Solei captures a majority of their SKU allocation with the largest amount of distinct products to market. Of all provinces, a majority of their allocation goes to New Brunswick, where they also have the largest share of any single producer.

Deep Dive: Tilray

Tilray recently made big waves with their NASDAQ listing, a first for a cannabis company of this nature. On day one they bring the tried and true brand of Marley Natural from the US to the Canadian market capitalizing on brand recognition. In addition they have some unique brands with representation in distinct markets, like Dub on only being available in Quebec.

Deep Dive: Tilray

Of the big four Tilray has the smallest total amount of products on shelves on day one. Irisa brand Oil products account for the biggest proportion of SKUs, followed by Marley Natural and Canada. Most of their SKUs are represented equally between British Columbia, Nova Scotia and Quebec with Ontario coming in at roughly 8% of allocation.

About Headset

Headset is market data and business intelligence for the cannabis industry. Our extensive Industry Report deep-dives into specific brands to help businesses better monitor the competitive landscape and perform exhaustive category analysis. Reports are generated via aggregate, real-time transaction data to get a unique and thorough analysis of what’s happening in the cannabis industry as the data becomes available. Headset offers three distinct products that help retailers, dispenaries, brands, product manufacturers, distributors, and investors move ahead in the industry.

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