August 16, 2019

U.S. Cannabis Spot Index — August 16, 2019

U.S. Cannabis Spot Index — Published August 16, 2019

U.S. Cannabis Spot Index down 0.7% to $1,328 per pound.

 

The simple average (non-volume weighted) price decreased $1 to $1,493 per pound, with 68% of transactions (one standard deviation) in the $777 to $2,208 per pound range. The average reported deal size increased to 2.3 pounds from 2.0 pounds last week. In grams, the Spot price was $2.93 and the simple average price was $3.29.

 

The relative frequency of trades for indoor flower increased by 1% week-over-week. The relative frequency of transactions involving outdoor product decreased by the same proportion, while that for deals for greenhouse flower was unchanged. Greenhouse flower’s share of the total documented weight moved nationally contracted by 3% this week. The relative volume of outdoor product expanded by the same magnitude, while that for warehouse flower was stable.  

The U.S. Spot Index declined by 0.7% this week to settle at $1,328 per pound. The small decline in the national composite price was due to an increase in the relative volume of lower-priced outdoor flower, as well as slight downturns in the national volume-weighted rates of the other two grow types. 

 

The overall expansion of the relative volume of outdoor flower nationally was driven primarily by observations out of California’s market. A significant uptick in the average deal size for such product in the Golden State, along with a small increase in its volume-weighted price, indicates that summer light-deprivation crops are coming to market. 

 

Meanwhile, prices in the other major Western markets continued to trend upward this week. As we detail below, record-setting demand has persisted in Colorado and Oregon. However, signs of increasing seasonal production in the latter state could be setting the stage for a reversal of the positive momentum that has characterized prices in the Beaver State since April. 

The national volume-weighted price for flower to be sold to general consumers increased this week as rises in that sector of the market in Colorado, as well as in Oregon and Washington State, outweighed declines in California and Nevada. 

 

Prices for medical flower sank this week. Rates for product designated for registered patients saw downturns in Michigan, Illinois, Massachusetts, Maine, and Rhode Island, as well as some smaller markets.

 

September Forward unchanged at $1,240 per pound.

 

The average reported forward deal size was nominally unchanged at 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower remained at 55%, 29%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 41 pounds, 50 pounds, and 64 pounds, respectively.

 

At $1,240 per pound, the September Forward represents a discount of 6.6% relative to the current U.S. Spot Price of $1,328 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Headlines From This Week’s Premium Report:

  • California

  • Prices for Flower in State’s Adult-Use Sector Have Seen Significant Volatility So Far This Summer
  •  
  • Colorado

    Total Monthly Cannabis Sales Reach New Record in June, Topping $150 Million for the First Time as State Spot Index Climbs

  • Oregon

  • Overall Retail Demand and Sales Volume of Flower Ascend to Unprecedented Heights in July; Harvest Volume Also Expanded Significantly, Signalling Seasonal Uptick in Supply
  •  
  • Washington

  • State Regulators Consider Big Changes to Traceability & Product Testing, but Actual Implementation Still a Long Way Off
  •  
  • Massachusetts

  • Adult-Use Sales Reached Over $45 Million in July, but Growth Slowing as Pace of Licensing Continues to be Sluggish
  •  
  • Illinois

  • Demand Still Booming Through July as Both Dispensary and Cultivator Sales Again Set New Records; Monthly Retail Revenue Double That of July 2018

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

16 August 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — August 16, 2019

U.S. Cannabis Spot Index — Published August 16, 2019

U.S. Cannabis Spot Index down 0.7% to $1,328 per pound.

 

The simple average (non-volume weighted) price decreased $1 to $1,493 per pound, with 68% of transactions (one standard deviation) in the $777 to $2,208 per pound range. The average reported deal size increased to 2.3 pounds from 2.0 pounds last week. In grams, the Spot price was $2.93 and the simple average price was $3.29.

 

The relative frequency of trades for indoor flower increased by 1% week-over-week. The relative frequency of transactions involving outdoor product decreased by the same proportion, while that for deals for greenhouse flower was unchanged. Greenhouse flower’s share of the total documented weight moved nationally contracted by 3% this week. The relative volume of outdoor product expanded by the same magnitude, while that for warehouse flower was stable.  

The U.S. Spot Index declined by 0.7% this week to settle at $1,328 per pound. The small decline in the national composite price was due to an increase in the relative volume of lower-priced outdoor flower, as well as slight downturns in the national volume-weighted rates of the other two grow types. 

 

The overall expansion of the relative volume of outdoor flower nationally was driven primarily by observations out of California’s market. A significant uptick in the average deal size for such product in the Golden State, along with a small increase in its volume-weighted price, indicates that summer light-deprivation crops are coming to market. 

 

Meanwhile, prices in the other major Western markets continued to trend upward this week. As we detail below, record-setting demand has persisted in Colorado and Oregon. However, signs of increasing seasonal production in the latter state could be setting the stage for a reversal of the positive momentum that has characterized prices in the Beaver State since April. 

The national volume-weighted price for flower to be sold to general consumers increased this week as rises in that sector of the market in Colorado, as well as in Oregon and Washington State, outweighed declines in California and Nevada. 

 

Prices for medical flower sank this week. Rates for product designated for registered patients saw downturns in Michigan, Illinois, Massachusetts, Maine, and Rhode Island, as well as some smaller markets.

 

September Forward unchanged at $1,240 per pound.

 

The average reported forward deal size was nominally unchanged at 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower remained at 55%, 29%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 41 pounds, 50 pounds, and 64 pounds, respectively.

 

At $1,240 per pound, the September Forward represents a discount of 6.6% relative to the current U.S. Spot Price of $1,328 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Headlines From This Week’s Premium Report:

  • California

  • Prices for Flower in State’s Adult-Use Sector Have Seen Significant Volatility So Far This Summer
  •  
  • Colorado

    Total Monthly Cannabis Sales Reach New Record in June, Topping $150 Million for the First Time as State Spot Index Climbs

  • Oregon

  • Overall Retail Demand and Sales Volume of Flower Ascend to Unprecedented Heights in July; Harvest Volume Also Expanded Significantly, Signalling Seasonal Uptick in Supply
  •  
  • Washington

  • State Regulators Consider Big Changes to Traceability & Product Testing, but Actual Implementation Still a Long Way Off
  •  
  • Massachusetts

  • Adult-Use Sales Reached Over $45 Million in July, but Growth Slowing as Pace of Licensing Continues to be Sluggish
  •  
  • Illinois

  • Demand Still Booming Through July as Both Dispensary and Cultivator Sales Again Set New Records; Monthly Retail Revenue Double That of July 2018

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

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

16 August 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

August 9, 2019

CANADA CANNABIS SPOT INDEX — August 9, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published August 9, 2019

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

The CCSI was assessed at C$6.98 per gram this week, down 4.3% from last week’s C$7.29 per gram. This week’s price equates to US$2,400 per pound at current exchange rates.

 

Last month, Ontario’s government announced it will hold another lottery to award 50 new cannabis retail licences, significantly expanding legal cannabis sales in the country’s most densely populated province. However, the first lottery for 25 retail locations held in January was perceived by many industry professionals as unfair, as the application process did little to vet an applicant’s product expertise or retail experience. 

 

The second lottery, which is currently underway, is expected to have fewer applicants due to a stricter vetting process. To avoid the perception of unfair practices, the Alcohol and Gaming Commission of Ontario (AGCO) has hired accounting experts KPMG to monitor the application process and lottery.

Of the 50 licenses to be issued, 42 of the new licences will be for private-sector retailers who successfully pre-qualify to be part of the new lottery system, while the remaining eight licences will be allocated to First Nations communities.

 

Current timeline for new stores:
Aug 7 to 9: Interested parties submit their applications to the AGCO. Each application must include a letter of secured retail space, a certified bank letter confirming access to C$250,000, and another letter confirming the ability to obtain a C$50,000 letter of credit. 

 

Aug 10 to 19: AGCO will review and vet applicants.

 

Aug 20: The lottery will be conducted to choose the 42 new licence holders, with the winners to be notified within 24 hours.

 

Oct 17: New license holders must be prepared to open their doors.

Ontario sales forecast:

Since the Ontario private stores opened in April, daily cannabis sales in the province have jumped by 259% to an average of C$696,850 per day, according to Statistics Canada. Cannabis Benchmarks estimates that each storefront currently generates average revenue of C$22,183 per day. The new physical locations have surely helped to capture some of the demand being served previously by the illicit industry. The addition of the new retail locations will further improve the ability of consumers to access the legal market.

 

Source: Health Canada, AGCO, Cannabis Benchmarks

Ultimately, Cannabis Benchmarks projects online sales to remain stable, with all new sales growth in the remainder of this year generated by the 42 new storefronts that are to be opened starting mid-October. Assuming that the new locations will generate the same daily sales estimates stated above, total daily cannabis sales in Ontario could reach C$1.73M by year’s end, roughly two-and-a-half times current levels.

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

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

9 August 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — August 9, 2019

U.S. Cannabis Spot Index — Published August 9, 2019

U.S. Cannabis Spot Index up 1.3% to $1,337 per pound.

 

The simple average (non-volume weighted) price increased $18 to $1,494 per pound, with 68% of transactions (one standard deviation) in the $781 to $2,207 per pound range. The average reported deal size was nominally unchanged at 2.0 pounds. In grams, the Spot price was $2.95 and the simple average price was $3.29.

 

The relative frequency of trades for greenhouse flower decreased by 2% week-over-week. The relative frequency of transactions involving outdoor product increased by the same proportion, while that for deals for indoor flower was unchanged. Greenhouse flower’s share of the total documented weight moved nationally contracted by 5% this week. The relative volumes of warehouse and outdoor product expanded by 2% and 3%, respectively.

The U.S. Spot Index rose by 1.3% this week to settle at $1,337 per pound. The generally upward trend observed in wholesale cannabis prices this summer resumed after last week’s momentary downturn. Still, there are signs that downward pressure on rates could be arriving in major markets in the weeks to come. Relative volumes of outdoor flower in both California and Oregon saw significant expansions this week. Volume-weighted prices for such product continued to trend downward in California and have recently flattened in Oregon, after rates for outdoor flower in the Beaver State have been on the upswing since around the close of the first quarter.  

The national volume-weighted price for flower to be sold to general consumers increased this week on rises in that sector of the market in California and Colorado, as well as in Oregon, Washington State, and Alaska. Prices for medical flower were also on the upswing this week. Rates for product designated for registered patients saw upticks in California, Arizona, Illinois, New Mexico, Maine, Rhode Island, and Washington, D.C.  

 

September Forward unchanged at $1,240 per pound.

 

The average reported forward deal size was unchanged at 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower remained at 55%, 29%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 42 pounds, 51 pounds, and 62 pounds, respectively.

 

At $1,240 per pound, the September Forward represents a discount of 7.2% relative to the current U.S. Spot Price of $1,337 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

 

Headlines From This Week’s Premium Report:

  • California

  • State Spot Index Rises to New YTD Peak, Settling at Highest Price Seen Since 4/20 2018
  •  
  • Colorado

    MED’s 2018 Annual Report Shows Amount of Flower Generated by Growers Expanded by 10% from 2017, But Growth in Production Capacity Leveled Off by End of 2018

  • Oregon

  • Increases in Relative Volume of Outdoor Flower and Flattening Prices for Such Product Have Tempered Upward Trend in State’s Spot Index
  •  
  • Washington

  • State Climatologist’s Report Indicates Favorable Growing Conditions for Hoop House and Outdoor Growers So Far this Season
  •  
  • Michigan

  • Most Medical Cannabis Businesses Will See Reductions in Licensing Fees for Upcoming FY

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

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

9 August 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

August 2, 2019

CANADA CANNABIS SPOT INDEX — August 2, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published August 2, 2019

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

The CCSI was assessed at C$7.29 per gram this week, up 5.5% from last week’s C$6.92 per gram. This week’s price equates to US$2,510 per pound at current exchange rates.

 

Canada is the only G7 country that has legalized cannabis for both medical and recreational purposes, but the growing number of licensed producers (LPs) and their production capacity is causing a big discrepancy between supply and current demand at home. However, the imbalance can be viewed as intentional when considering that Canadian companies are building capacity and expertise to capitalize on capturing a large portion of total global cannabis revenue. 

 

As part of each of their growth plans, these major multi-billion dollar companies recognize the international medical and pharmaceutical cannabis market as having significant long-term business potential. 

 

Despite its geographic proximity, export to the U.S. is not expected to be feasible for Canadian companies due to overproduction in numerous states, apparent in the significant price erosion observed in the most advanced adult-use markets in recent years, in addition to a robust illicit market in states that have not legalized. 

 

Europe and Latin America seem to be the preferred destination for Canadian cannabis. In both regions there is growing demand for medicinal cannabis but limited production infrastructure, regulation, and technology. Canadian LPs have an edge in these markets, which is allowing them to export not only products to these countries, but also cultivation technology, extraction techniques, cultivars, and business knowledge. 

 

Thirty countries have legalized medical cannabis. Major Canadian LPs are either exporting their production to, or building a physical presence in many of them. The simple intent is to be the dominant player in this emerging global space. As of mid-2019, Canada is one of the largest exporters of legal cannabis products. Major LPs are responsible for the export of thousands of kilograms of cannabis to supply medicinal markets in countries that lack cultivation capacity.  The export destination to date include: Croatia, Cyprus, Czech Republic, Germany, New Zealand, South Africa, and the United States. 

 

What is the process of exporting?

 

Under the Cannabis Act, Canadian LPs require a permit to export cannabis and related products for medical use. An application is submitted to Health Canada, which requires that the applicant holds an import permit from the final destination country and confirmation the destination country has not met or exceeded its import limit for the current year. This process can take as little as 30 days, according to a statement made by Aurora Cannabis.

 

For recreational cannabis, the rules are inflexible and undeveloped. A number of international treaties ban the movement of cannabis for recreational purposes, regardless of the domestic legal status of cannabis in a specific nation. Canada is a signatory to three international treaties that prohibit the movement of cannabis for recreational purposes:

 

 

Consequently, Canadian LPs will be restricted to international cannabis trade for medical and scientific purposes until the World Health Organization and United Nations take steps to adjust the terms of the treaties noted above, or reclassify cannabis and cannabis products in some way.

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

Become a member of our Price Contributor Network and receive discounted pricing and exclusive analysis!

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

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