November 15, 2019

U.S. Cannabis Spot Index — November 15, 2019

U.S. Cannabis Spot Index — Published November 15, 2019

U.S. Cannabis Spot Index up 0.8% to $1,464 per pound.

 

The simple average (non-volume weighted) price increased $31 to $1,684 per pound, with 68% of transactions (one standard deviation) in the $988 to $2,379 per pound range. The average reported deal size decreased nominally to 2.2 pounds. In grams, the Spot price was $3.23 and the simple average price was $3.71.

 

The relative frequency of trades for indoor flower increased by about 3% this week. The relative frequency of deals for greenhouse product decreased by the same proportion, while that for outdoor flower was unchanged. 

 

Outdoor product’s share of the total reported weight moved nationally contracted by over 3% this week. The relative volumes of warehouse and greenhouse flower grew by about 1% and 2%, respectively.

The U.S. Spot Index rose by 0.8% this week to settle at $1,464 per pound. This week’s national composite price once again represents a new year-to-date peak. In numerous previous years, the U.S. Spot Index frequently fell to its annual trough around early-mid November.   

 

On the state level, the Trailing 4-Week Average prices of California, Colorado, and Washington State are all still on the upswing as of this week, with Oregon the only one of the four major Western markets to see its trend line currently in decline. 

 

Still, increased supply from the fall harvest does appear to be having some impact on wholesale pricing. Rates for outdoor product fell this week in California after ascending consistently since mid-September. Prices for such flower in Colorado and Washington have stabilized in recent weeks at levels below peaks that were observed in late October and early November, respectively. Meanwhile, rates for outdoor flower in Oregon have been on the decline since the week ending October 11. As we discuss below, new data from state regulators shows that a very large amount of plant material was harvested in September, with Oregon growers likely attempting to pull their crops down because of the threat of mold from early autumn rains.

 

Apart from Oregon, though, declines in prices for outdoor flower have not been significant this harvest season. At the moment, demand from wholesale buyers attempting to bring in more inventory ahead of the Thanksgiving holiday may be contributing to upward pressure on rates.

The national volume-weighted price for flower to be sold to general consumers rose this week on increases in the adult-use sectors of the markets of California, Colorado, and Massachusetts, as well as an uptick in Oregon’s Spot. The national price for medical flower sank again this week on declines in that section of the market in California and Colorado, in addition to the medical-only systems of Arizona, Maine, New Hampshire, New Mexico, Rhode Island, and Vermont.

December Forward up $20 to $1,470 per pound.

 

The average reported forward deal size was nominally unchanged at 50 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 50%, 36%, and 14% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 51 pounds, 43 pounds, and 61 pounds, respectively.

 

At $1,470 per pound, the December Forward represents a premium of 0.4% relative to the current U.S. Spot Price of $1,464 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

  • Volume-Weighted Average Price for Outdoor Flower Up 35% Year-Over-Year
  •  
  • Colorado

    Demand Slumped in September, But Downturn in Monthly Sales Did Not Impede Upward Trend in State Spot Index

  • Oregon

  • September Sales Down About 10% Month-Over-Month as Harvest Volume Nearly Doubles in Same Span
  •  
  • Washington

  • Retail Demand Reportedly Increasing Year-Over-Year, But Not to Same Degree as in Colorado or Oregon
  •  
  • Michigan

  • Adult-Use Sales Can Start in Just Over Two Weeks, as Officials Announce Inventory Transfers from Equivalent Medical to Adult-Use Licenses Will be Allowed Beginning December 1
  •  
  • Illinois

  • Retail Sales of Medical Cannabis in October Are Double Those from Same Month Last Year

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

15 November 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

November 8, 2019

CANADA CANNABIS SPOT INDEX — November 8, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published November 8, 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$6.76 per gram this week, up 0.4% from last week’s C$6.74 per gram. This week’s price equates to US$2,329 per pound at the current exchange rate.

 

This week we review Canadian cannabis usage trends by province and age group. Statistics Canada conducts a survey on cannabis usage each quarter. The latest data provides details on Q3 2019 usage, which adds to the same data they have been tracking since Q1 2018. The exercise is a self-reported survey with no consideration of whether the cannabis consumed originated from the legal or the illicit market.

The current report shows that, overall, cannabis use continues to grow amongst Canadians. However, as the chart on the following page illustrates, consumption has not expanded at a uniform rate during the survey period, but has varied from quarter-to-quarter. The growth can be attributed to increased accessibility and the growing normalization of cannabis as a recreational drug. Based on the current survey, Statistics Canada estimates 5.2 million, or 17.1%, of citizens over the age of 15 use cannabis. The survey shows that 650,000 more people reported using cannabis in Q3 2019 than in Q3 2018, before recreational cannabis was legalized.  

 

Although the survey does not capture the source from which cannabis is purchased or the frequency of usage, it still provides important information about trends in consumption. The data shows that cannabis usage is lowest in Quebec, with only 11.5% of the province’s population partaking. Meanwhile, 26% of the population in the maritime provinces acknowledged using cannabis. 

 

Source: Cannabis Benchmarks, Statistics Canada

 

During the period from April 1 to September 30, approximately 580,000 people reported being first time cannabis consumers. The data also showed that senior citizens made up a disproportionately large segment of first-time cannabis users. 27% of new consumers identified by the survey in Q2 and Q3 are 65 years of age or older, while individuals aged 25 to 44 made up only 10% of new consumers during this period. Senior citizens are more likely to obtain cannabis from legal sources, adding to demand in the licensed system. However, most brands have to this point hesitated to market to this age group even as Canada’s recreational market grows. This is due to evidence that seniors consume less cannabis than other age groups and generally appear to be using products for therapeutic benefits, rather than recreation.

Source: Cannabis Benchmarks, Health Canada

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8 November 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — November 8, 2019

U.S. Cannabis Spot Index — Published November 8, 2019

U.S. Cannabis Spot Index down 0.5% to $1,452 per pound.

 

The simple average (non-volume weighted) price declined $10 to $1,653 per pound, with 68% of transactions (one standard deviation) in the $979 to $2,327 per pound range. The average reported deal size increased to 2.2 pounds. In grams, the Spot price was $3.20 and the simple average price was $3.64.

 

The relative frequency of trades for indoor flower decreased by about 3% this week. The relative frequency of deals for greenhouse product increased by the same proportion, while that for outdoor flower was unchanged.

The U.S. Spot Index declined by 0.5% this week to settle at $1,452 per pound. This is only the second decrease in the weekly national composite price to be observed since the beginning of September. 

 

Previously, November has typically been the month in which the lowest monthly average Spot price of any given year has been documented. That trend that will almost certainly be disrupted this year even if a downward trend manifests going forward. Two weeks into this month, November’s month-to-date average composite rate is $1,456 per pound, the highest so far for 2019 and up by 1.7% from October. 

 

In 2018, the monthly average U.S. Spot was essentially flat from October to November, when it declined slightly from $1,076 to $1,075 per pound. Last year, weekly prices generally trended downward from early September through mid-November, before recovering to close 2018. The U.S. Spot rose by 12.2% from this point in 2018 to the end of last year.    

As we noted last week, positive trends in wholesale prices in the four major Western markets have in most cases subsided or been reversed recently. If such trends continue, then it is possible that the end-of-year price recovery that has been observed on numerous previous occasions may be absent this year.

The national volume-weighted price for flower to be sold to general consumers inched upward marginally this week. The slight rise was due entirely to an uptick in wholesale prices in Washington State, as every other state with a functioning adult-use system saw declines.   

 

The national price for medical flower sank this week. As noted above, most of the states covered by our reporting experienced decreasing wholesale prices this week, with markets such as Arizona and Illinois seeing notable declines in their Spot prices.  

December Forward unchanged at $1,450 per pound.

 

The average reported forward deal size decreased to 50 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 50%, 35%, and 15% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 50 pounds, 42 pounds, and 61 pounds, respectively.

 

At $1,450 per pound, the December Forward represents a discount of 0.2% relative to the current U.S. Spot Price of $1,452 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 Greenhouse and Outdoor Flower Remain Strong this Harvest Season, With Both Rising to New Annual Highs this Week
  •  
  • Colorado

    Announcement that Columbia Care is Acquiring The Green Solution Provides Insight into Market Share of One of State’s Largest Chains

  • Oregon

  • State Spot Index Declines for Second Straight Week; Prices for Greenhouse and Outdoor Flower Have Been Decreasing for Four Consecutive Weeks
  •  
  • Washington

  • Composite Price Has Trended Upward Slightly So Far in Q4
  •  
  • Massachusetts

  • Monthly Adult-Use Sales Decline for the First Time in September as Ban on Vape Products was Implemented Late that Month 

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

8 November 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

November 1, 2019

CANADA CANNABIS SPOT INDEX — November 1, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published November 1, 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$6.74 per gram this week, down 3% from last week’s C$6.94 per gram. This week’s price equates to US$2,331 per pound at the current exchange rate.

 

This week we review Cannabis Benchmarks® estimate of monthly cannabis supply coming to market with the release of Health Canada’s August demand and stored inventory data. Our estimates of supply show that cannabis market volumes peaked in June with 62,671 kg generated by licensed producers (LPs) across Canada. Since then the quantity of cannabis has declined by 15.6% to 52,913 kg in August. 

 

Our expectation is that Canadian cannabis supply will rise above the June peak in November with outdoor product being harvested in September and early October at higher latitudes. Finished product can take six weeks to reach the marketplace after harvests are cut down, as the product is trimmed, dried, tested, and packaged.

Source: Cannabis Benchmarks, Health Canada

We have routinely reported that current supply levels have been outpacing legal market consumption. The build out of production capacity by LPs has caused a severe oversupply, with roughly 80% of cannabis users still turning to the illicit market due to lower prices, higher quality product, and more convenient access. For the month of August, we analyzed the disposition of the 52,913 kg of supply generated by LPs. Only 3% was consumed by medical patients, while 24% was consumed by recreational consumers. The remaining roughly 73%, or 38,626 kg, went into inventory as either finished or unfinished goods across the country.  

Source: Cannabis Benchmarks, Health Canada

This has been a persistent issue in the Canadian cannabis markets, especially as growth in supply has been outpacing demand since March. Since that time, nearly four-fifths of monthly available product has been going to federal and provincial storage facilities, resulting in a dramatic expansion of unsold inventory. As of the end of August, the current finished inventory levels sit at approximately five times the demand reported for August, while unfinished inventory amounts to 23 times the volume of product purchased in August.

Source: Cannabis Benchmarks, Health Canada

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1 November 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — November 1, 2019

U.S. Cannabis Spot Index — Published November 1, 2019

U.S. Cannabis Spot Index up 0.1% to $1,460 per pound. The simple average (non-volume weighted) price was nominally unchanged at $1,663 per pound, with 68% of transactions (one standard deviation) in the $976 to $2,350 per pound range. The average reported deal size increased to 2.1 pounds. In grams, the Spot price was $3.22 and the simple average price was $3.67.

 

The relative frequency of trades for indoor flower decreased by over 1% this week. The relative frequency of deals for outdoor product increased by the same proportion, while that for greenhouse flower was unchanged.

The U.S. Spot Index rose by $1 this week to settle at $1,460 per pound. This is the third consecutive week that the national composite price has established a new annual peak. Yet, the marginal increase documented this week, along with the behavior of wholesale rates at the state level, suggests that the downturn in prices seen customarily at this time of year may yet be in the offing.  

 

California’s Spot saw a significant uptick this week on the back of increases in rates for greenhouse and outdoor product. However, while price trends in the four major Western markets have all generally been on the upswing since this summer, some divergences began to be observed this week. Most notably, the strong, steady climb of Oregon’s Spot was interrupted by a significant decline this week. Meanwhile, positive movement in wholesale rates in Colorado and Washington has leveled off in recent weeks. 

 

Whether the departures from uniformly upward movement in wholesale prices in the major markets will persist remains to be seen. Even as the fall harvest begins to make its way to market in earnest in the weeks ahead, the approach of the Thanksgiving holiday means that wholesale demand will likely increase at the same time. As those who have observed the legal cannabis industry in recent years are aware, retailers now traditionally run “Green Friday” specials on the day after Thanksgiving and so will look to have larger volumes of product on hand to accommodate consumers looking to take advantage of sales and promotions.

The national volume-weighted price for flower to be sold to general consumers declined slightly this week. The downturn was due mainly to a significant drop in wholesale rates in Oregon, although Colorado also saw a small decrease in the price for flower in its adult-use sector.  

 

The national price for medical flower continued its overall upward trend of the past six weeks. A rise in that sector of the market in California, along with upticks in Maine, Massachusetts, Michigan, New Mexico, Rhode Island, and Vermont pushed up the national rate for medical product.

May 2020 Forward initially assessed at $1,455 per pound.

 

The average reported forward deal size increased to 51 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 48%, 36%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 53 pounds, 42 pounds, and 61 pounds, respectively.

 

At $1,450 per pound, the December Forward represents a discount of 0.7% relative to the current U.S. Spot Price of $1,460 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 Greenhouse & Outdoor Flower Rise to New Annual Peaks, While Rates for Indoor Product Have Slumped in Recent Weeks
  •  
  • Colorado

    State Spot Index Has Plateaued in Recent Weeks, but Reports of Widespread Mold and Yeast Contamination Found in Products at Denver Retailers May Impact Market

  • Oregon

  • Composite Price Experiences its Largest Week-Over-Week Decline of 2019 After Climbing Consistently Since April
  •  
  • Washington

  • Outdoor Flower Prices Continue to Ascend, Up Over 20% From First Week of October
  •  
  • Nevada

  • Total Retail Sales and Those in Adult-Use Market Both Rise to New Record Highs in August, but Exceed Previous Peaks by Only Small Margins

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

1 November 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved