April 26, 2019

CANADA CANNABIS SPOT INDEX — April 26, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published April 26, 2019

The CCSI moved higher by 4.5% to C$6.99 per gram this week, from last week’s C$6.69 per gram. This week’s price equates to US$2,361 per pound at current exchange rates.


Last week Health Canada released their preliminary summary of February sales and inventory data from the Cannabis Tracking System. In our analysis below, we focus on the growing inventory of finished and unfinished product. February data shows finished inventory growing by 18% from January levels to 23,739 kg, while unfinished inventory grew by 4% month-over-month, to 120,731 kg.

As can be seen with each report release, there are small changes made to the previous month’s inventory figures. Total inventory with the latest release sits at 144,470 kg, which equates to approximately 20.6 month of Canada’s dry cannabis usage at current sales rates.

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

26 April 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — April 26, 2019

U.S. Cannabis Spot Index — Published April 26, 2019

4-Year Anniversary Edition!

This week’s edition of the U.S. Cannabis Spot Index marks our 4-year anniversary of providing weekly wholesale cannabis spot index reports! We thank you all for your interest and support!

U.S. Cannabis Spot Index up 0.8% to $1,098 per pound.

 

The simple average (non-volume weighted) price decreased $28 to $1,151 per pound, with 68% of transactions (one standard deviation) in the $405 to $1,897 per pound range. The average reported deal size was nominally unchanged at 2.8 pounds. In grams, the Spot price was $2.42 and the simple average price was $2.54.

 

The relative frequency of trades for indoor flower decreased by 3%. The relative frequency of transactions involving greenhouse and outdoor product increased by 2% and 1%, respectively. The relative volumes of each grow type were unchanged compared to last week. In the four major Western markets, small shifts in each product type’s share of the reported weight moved were observed, with warehouse flower seeing slight increases in its relative volume in most of the states in question.    

 

The U.S. Spot Index rose by 0.8% this week to settle at $1,098 per pound. In what was for the most part uncharacteristic post-4/20 behavior, the Spot Indices of the five largest adult-use markets – California, Colorado, Oregon, Washington, and Nevada – all saw increases in their composite prices. Last year, only Colorado and Oregon experienced upticks in their Spot rates in the week subsequent to 4/20; of the five states under discussion, only Colorado did in 2017. Also notable this week were significant declines documented in the Spot Indices of several sizeable medical cannabis systems, among them Arizona, Massachusetts, Michigan, and New Mexico. While the increased demand associated with 4/20 is typically discussed in regard to adult-use markets, data from some medical programs such as Arizona has shown that patients take advantage of the “holiday” to stock up, which can depress demand subsequently.  

The national volume-weighted price for flower to be sold in adult-use markets rose this week on increases in Colorado, Oregon, Washington State, and Nevada. California also saw a week-over-week downturn in its adult-use sector. Falling prices for medical product in Arizona, Massachusetts, Illinois, Michigan, and New Mexico were primarily responsible for pulling down the national rate for flower to be sold to patients.       

May 2019 Forward closes up $15 at $1,065 per pound.

 

The average reported forward deal size was 43 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 58%, 28%, and 14% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were nominally unchanged at 40 pounds, 49 pounds, and 46 pounds, respectively.

 

At $1,065 per pound, the May Forward represents a discount of 3.0% relative to the current U.S. Spot Price of $1,098 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample Headlines From This Week’s Premium Report:

  • California

    BCC Data Shows Only 5% of Test Batches Have Failed Required Screenings in 2019, Compared to Over 13% in H2 2018

  • Colorado

    Number of Active Medical Cannabis Cultivation Licenses Down 10% From a Year Ago as Sales and Patient Counts in That Sector of the Market Decline

  • Oregon

  • Outdoor Flower Observed to Account for Roughly Two-Thirds of All Product Traded in April, Emphasizing Continued Glut of Unsold Inventory
  •  
  • Washington

  • Relative Volume of Outdoor Flower Jumped by 14% in the First Three Weeks of April, After Holding Fairly Steady Through Q1 2019
  •  
  • Nevada

  • Official February Sales Data Shows Small Decline in Demand After Months of Stagnation, Corresponding to Sliding Wholesale Prices in that Month
  •  
  • Maine

  • Draft Rules for Adult-Use Industry Provide Blueprint for Future Market, But Questions Remain Regarding Product Testing, Other Issues
  •  

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

26 April 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

April 19, 2019

U.S. Cannabis Spot Index — April 19, 2019

U.S. Cannabis Spot Index — Published April 19, 2019

U.S. Cannabis Spot Index up 1.9% to $1,089 per pound.

 

The simple average (non-volume weighted) price increased $18 to $1,179 per pound, with 68% of transactions (one standard deviation) in the $394 to $1,964 per pound range. The average reported deal size decreased to 2.8 pounds from 2.9 pounds last week. In grams, the Spot price was $2.40 and the simple average price was $2.60.

 

The relative frequency of trades for indoor flower increased week-over-week by 3%. The relative frequency of transactions involving greenhouse product decreased by the same proportion, while that for deals involving outdoor flower was unchanged. Warehouse product’s share of the total documented weight moved grew by 3% compared to last week. The relative volumes of greenhouse and outdoor product contracted by 1% and 2%, respectively.

One day ahead of 4/20, the U.S. Spot Index rose by 1.9% this week to settle at $1,089 per pound. In 2018 at this time, the national composite rate experienced its third consecutive week of declining prices, closing at $1,331 per pound after cresting as high as $1,392 per pound in the final week of March. This year, the weeks of late March and early April have seen the U.S. Spot fall to some of its lowest points thus far in 2019, a departure from the elevated rates documented at the end of March in both 2017 and 2018.  

 

Notably, the country’s five largest legal cannabis markets – California, Colorado, Washington, Oregon, and Nevada – all saw increases in their Spot Indices this week, largely in defiance of trends leading up to this weekend’s industry “holiday”.

 

Overall, the apparent impact of 4/20 on wholesale prices in those states has diminished over time. Supplies of available inventory are more ample generally, blunting the effect of any increases in demand. Additionally, reports from the field have stated that retailers often seek out lower-priced lots ahead of 4/20, so that sales and specials may be offered without impacting margins negatively.

The national volume-weighted price for flower to be sold in adult-use markets rose this week on increases in Colorado, Oregon, Washington State, and Nevada. Other states with recreational markets, such as Alaska and Massachusetts, saw declines in their Spot Indices, while California also saw a week-over-week downturn in its adult-use sector. Rising prices for medical product in California, Michigan, and New Mexico were primarily responsible for pushing up the national rate for flower to be sold to patients.      

May 2019 Forward unchanged at $1,050 per pound.

 

The average reported forward deal size declined to 43 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 60%, 27%, and 13% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 40 pounds, 49 pounds, and 46 pounds, respectively.

 

At $1,050 per pound, the May Forward represents a discount of 3.5% relative to the current U.S. Spot Price of $1,089 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample Headlines From This Week’s Premium Report:

  • California

    State Spot Index Up Slightly, Even as Price for Indoor Flower Fell to a Year-to-Date Low

  • Colorado

    Month-to-Date Average Composite Price for April Down Compared to March, A Departure from Previous Years

  • Oregon

  • Volume-Weighted Price for Greenhouse Product Fell to All-Time Low for Any Market This Week, But State Spot Index Up from Last Week’s Historic Trough
  •  
  • Washington

  • Volume-Weighted Price for Indoor Flower Up 12.5% from Beginning of April to This Week
  •  
  • Nevada

  • State Spot Index Up Almost 10% in Two Weeks Ahead of 4/20
  •  
  • Arizona

  • State Data Shows Record Sales Volume in March, But Wholesale Pricing Generally Declined
  •  
  • Illinois

  • Retail and Wholesale Sales Jumped to New Record Highs in March, As State Spot Index Climbed to Current Annual Peak  

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

19 April 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — April 19, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published April 19, 2019

The CCSI moved lower by 5.9% to C$6.69 per gram, from last week’s C$7.11 per gram. This week’s price equates to US$2,272 per pound at current exchange rates.

 

This week Health Canada released their preliminary summary of February sales data from the Cannabis Tracking System. In our analysis below, we focus on sales of non-medical dry cannabis and oil, which have proven to be weaker than anticipated. In the last month many provinces have restated their cannabis revenue projections for 2019, adjusting them downward due to a flourishing black market with lower prices and more product variety.

 

The reports are labelled as preliminary, therefore data from the past months are adjusted with each release. In the most recent report, January sales for non-medical dry cannabis were restated higher by 8 kg/day, resulting in average daily sales of 179 kg for the month. Preliminary February sales figures came closely in line with both December and January at 178 kg/d.

Also in the most recent report, January sales of cannabis oil were restated higher by 2 litres/d, for an average daily sales of 95 litres. February sales figures came slightly lower than January at 91 litres/d.

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

19 April 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

April 12, 2019

CANADA CANNABIS SPOT INDEX — April 12, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published April 12, 2019

The CCSI moved higher by 2.5% to C$7.11 per gram, from last week’s C$6.94 per gram. This week’s price equates to US$2,418 per pound at current exchange rates.

 

The hype around cannabis legalization and the tax revenues that would pour into federal and provincial coffers seems to be slowly fading. Several provinces are restating their future revenue projections from this highly publicized new source of tax revenue.

 

The Ontario budget, released on Thursday, gave some new insight into the current state of the legal cannabis market in the province. Ontario, with 38% of the country’s population and an estimated 1.8 million cannabis users, cut their projected revenue from cannabis excise taxes to C$80 million from C$115 million for the 2019-2020 fiscal year. The cut reflects a black market still thriving due to volatile supply, limited retail locations, and higher than expected prices at the counter in the legal market. In reaction to the revised budget, Ontario politicians are engaging more deeply with Premier Doug Ford’s government and introducing changes to how cannabis is sold across the province to increase sales in the legal market.

 

The U.S. is closely monitoring the evolution of these markets in Canada and the Canadian case study could play a formative role in how some states move forward.

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

12 April 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved