July 17, 2020

U.S. Cannabis Spot Index — July 17, 2020

U.S. Cannabis Spot Index — Published July 17, 2020

U.S. Cannabis Spot Index up 4.2% to $1,501 per pound.

 

The simple average (non-volume weighted) price increased $91 to $1,745 per pound, with 68% of transactions (one standard deviation) in the $938 to $2,552 per pound range. The average reported deal size remained nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.31 and the simple average price was $3.85.

August Forward unchanged at $1,430 per pound.

 

The average reported forward deal size was 35 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 48%, 33%, and 19% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 39 pounds, 28 pounds, and 36 pounds, respectively.

 

At $1,430 per pound, the August Forward represents a discount of 4.7% relative to the current U.S. Spot Price of $1,501 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

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

17 July 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

July 10, 2020

CANADA CANNABIS SPOT INDEX — July 10, 2020

CANADA CANNABIS SPOT INDEX (CCSI) 

Published July 10, 2020
1

*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$6.14 per gram this week, down 2.6% from last week’s C$6.31 per gram. This week’s price equates to US$2,053 per pound at the current exchange rate.

Include your weekly wholesale transactions in our price assessment by joining our Price Contributor Network

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This week we review a strategy the Northwest Territories (NWT) government is undertaking to fight the robust illicit market. Over the past couple of weeks, we have reviewed the size and price differential between the legal and illegal market in Ontario, but this phenomenon is relevant across the country. Both Ontario and British Columbia not only face issues with illicit dealers, but also unlicensed storefronts. 

 

In Q1 2020, the Ontario Cannabis Store (OCS) stated 81% of the province’s cannabis supply still originated from illicit sources. The two primary contributors to the size of the illicit market are lack of retail accessibility and higher dry flower prices in the legal system. From April 2019 to March 2020, OCS data shows that dry flower purchased legally was C$2.28/gram, 27% more expensive than that from illegal sellers. 

 

In the NWT, legal cannabis products can be purchased online through the provincial government’s sales site or from five liquor stores distributed across the territory. NWT faces some of the highest retail prices in Canada, and by a significant measure. Crowdsourced data collected by Statistics Canada shows the average price at C$10.65 per gram in 2019 and 2020, well above the national average.

Source: StatsCan

With a lack of convenient physical retail infrastructure and high prices, the NWT government made the tough decision of trading revenues for a thriving legal supply network. The NWT government has decided to cut the price of legal cannabis products by 10%. This is a bold move, but a necessary one to grow market share. We believe the NWT approach will be seen as a successful pilot project, and other major provinces will follow suit.

For more data and analytics like this, subscribe to the Cannabis Market Insights report developed in collaboration Nasdaq. This in-depth monthly report provides exclusive data and analysis on the legal cannabis industry, focusing largely on the Canadian cannabis market, as well as the cannabis equities market in the U.S.

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

10 July 2020 Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved.

U.S. Cannabis Spot Index — July 10, 2020

U.S. Cannabis Spot Index — Published July 10, 2020

U.S. Cannabis Spot Index up 0.4% to $1,441 per pound.

 

The simple average (non-volume weighted) price increased $12 to $1,654 per pound, with 68% of transactions (one standard deviation) in the $897 to $2,411 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.18 and the simple average price was $3.65.

 

The relative frequency of trades for indoor flower increased by 2% this week. The relative frequency of transactions for greenhouse product decreased by the same proportion, while that for deals for outdoor flower was unchanged.  

 

The relative volume of greenhouse product contracted by 2%. The relative volumes of warehouse and outdoor flower each expanded by 1%.

As the U.S. continues to lurch about aimlessly in its response to the COVID-19 pandemic, early cannabis sales figures for June out of some state markets show that the strong, unprecedented demand observed in prior months has held up and even grown in some cases. Total and adult-use sales revenue in Illinois both reached new record highs, although sales in the state’s medical market slipped somewhat from the prior month. Oklahoma’s medical cannabis sales continued to climb to new peaks, outpacing numerous adult-use markets, but the month-over-month growth rate slowed significantly compared to those observed in April and May. 

 

Meanwhile, with the number of visitors to Las Vegas in April down 97% year-over-year, sales in Nevada saw their lowest levels since shortly after the state’s adult-use market opened. A silver lining for the Silver State is that April’s cannabis sales amounted to almost two-thirds of those recorded in January this year, which is likely the final month before the pandemic began to impact Nevada’s market, indicating strong demand from locals. 

 

 

In the midst of dramatic fluctuations in total sales, an analysis of recent monthly sales data out of Oregon and Arizona shows that the proportion of total sales made up by each product type has been largely stable. In the former state, flower’s share of total sales revenue had actually grown a bit in recent months, despite warnings that smoking of any kind can worsen and complicate a COVID-19 infection.

August Forward unchanged at $1,430 per pound.

 

The average reported forward deal size was 35 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 48%, 33%, and 19% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 39 pounds, 28 pounds, and 36 pounds, respectively.

 

At $1,430 per pound, the August Forward represents a discount of 0.7% relative to the current U.S. Spot Price of $1,441 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:

Oregon

Proportion of Total Sales Revenue Made Up by Flower Increases Slightly During Pandemic

Nevada

April Sales Slump as Tourism Dries Up, But Still Demonstrate Strong Demand from Locals

Massachusetts

Adult-Use Sales Reach $54.5 Million in June, Down Slightly from February, the Last Full Month of Sales Before COVID-Motivated Shutdown

Illinois

Combined Adult-Use and Medical Sales Top $77 Million in June, a New Record, as Medical Revenue Sees MoM Decline

Oklahoma

Medical Dispensaries Tally $80 Million in Sales in June, But Growth Rate Slows Significantly from April and May

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

10 July 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

July 2, 2020

U.S. Cannabis Spot Index — July 3, 2020

U.S. Cannabis Spot Index — Published July 3, 2020

U.S. Cannabis Spot Index up 3.5% to $1,435 per pound.

 

The simple average (non-volume weighted) price increased $90 to $1,642 per pound, with 68% of transactions (one standard deviation) in the $875 to $2,409 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.16 and the simple average price was $3.62.

 

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

 

The relative volume of greenhouse product expanded by almost 2%. The relative volumes of warehouse and outdoor flower each contracted by about 1%.

With the close of June this week, we enter the second half of 2020. The entire second quarter of this year played out under the shadow of the COVID-19 pandemic. Although the novel coronavirus has caused unprecedented social and economic disruptions, available information indicates that the legal cannabis industry in the U.S. has been notably resilient. 

 

As we have reported over the course of prior weeks and months, expanded consumer and patient demand has resulted in sales rocketing upward in many state markets – such as Oregon, Washington, Arizona, and Oklahoma – well in excess of previously-observed growth trends. COVID-19 has not noticeably stymied growth in new adult-use systems in Illinois and Michigan, which have continued to expand despite the operational challenges and regulatory restrictions presented by government responses to the pandemic. 

 

Even where growth has slowed somewhat, as in Colorado’s market, year-to-date sales through April are still up by over 12% compared to the first four months of 2019. While Nevada’s and Massachusetts’ legal cannabis markets have been hard-hit for different reasons, cannabis sales for the most part received a boost in Q2 even as COVID-19 spread throughout the U.S.

 

 

Despite unanticipated spikes in demand in numerous large legal cannabis markets, national wholesale flower prices displayed relative stability in Q2. Weekly U.S. Spot rates during the period ranged from a low of $1,322 per pound in the week ending May 22 and a high of $1,401 per pound two weeks later. For Q2 overall, the U.S. Spot Index averaged $1,359 per pound, down 3.4% from Q1. Q2 2020’s mean national composite price is up compared to the same period a year ago, however, by 16.7%.

January 2021 Forward initially assessed at $1,350 per pound.

 

The average reported forward deal size was 34 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 48%, 33%, and 19% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 40 pounds, 28 pounds, and 31 pounds, respectively.

 

 

At $1,430 per pound, the August Forward represents a discount of 0.3% relative to the current U.S. Spot Price of $1,435 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

Number of Active Cultivation Licenses Almost Double the Amount Counted a Year Ago

Colorado

Emergency Rule Extends Expiration of Some Licenses, Likely for the Final Time

 

Massachusetts

Average Daily Sales in First 30 Days Since Adult-Use Market Reopened Down Significantly from Prior to COVID-19

Illinois

State Delays Issuance of Craft Cultivator, Product Manufacturer, Transport Licenses Due to Coronavirus

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

3 July 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — July 3, 2020

CANADA CANNABIS SPOT INDEX (CCSI) 

Published July 3, 2020
1

*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$6.31 per gram this week, up 1.8% from last week’s C$6.19 per gram. This week’s price equates to US$2,101 per pound at the current exchange rate.

Include your weekly wholesale transactions in our price assessment by joining our Price Contributor Network

If you have not already done so, we invite you to join our Price Contributor Network, where market participants anonymously submit wholesale transactions to be included in our weekly price assessments. It takes two minutes to join and two minutes to submit each week, and comes with loads of extra data and market intelligence.

This week we look closely at the growth in licensed cannabis stores across Canada, and in Ontario in particular. Nationwide, the licensing of new stores has slowed with the onset of COVID-19 lockdowns, but we still see a steady pace of growth. At the end of June, there were 962 stores across Canada, with 59 stores added since May, and an increase of 672 stores from the same time last year.

Source: Cannabis Benchmarks, Statistics Canada

Alberta still is home to roughly half the national store count with 486 stores, but other provinces are starting to grow their physical retail presence quickly. British Columbia (BC) did not see many new shops open during June, but the BC Liquor and Cannabis Regulation Branch shows 80 new stores coming soon. This would take the total BC count from 197 to 277. There is no specified time frame for these new locations, but an address is provided for each planned new store. Ontario was the province that added the most new stores in June, with 29 coming online last month, bringing the total to 100 licensed retailers across the province.  

Source: Cannabis Benchmarks

From March to June, the average increase in the number of legal storefronts in Ontario has been 17 per month. This is a significant acceleration in licensing retailers and comes after Ontario altered its approach to permitting from a lottery system to a simpler application process in late 2019. 

 

This growth rate has occurred as Canada implemented lockdowns to stem the spread of COVID-19, and we anticipate the growth rate will accelerate as the province starts to reopen. Using a conservative growth rate of 17 stores per month would take our year-end total of operational shops in Ontario to 202. With a more aggressive average store growth rate of 35 stores per month, Ontario could have as many as 310 stores by the end of the year.

Source: Cannabis Benchmarks

For more data and analytics like this, subscribe to the Cannabis Market Insights report developed in collaboration Nasdaq. This in-depth monthly report provides exclusive data and analysis on the legal cannabis industry, focusing largely on the Canadian cannabis market, as well as the cannabis equities market in the U.S.

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

03 July 2020 Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved.