November 25, 2020

U.S. Cannabis Spot Index — November 27, 2020

U.S. Cannabis Spot Index — Published November 27, 2020

U.S. Cannabis Spot Index down 0.5% to $1,594 per pound.

 

The simple average (non-volume weighted) price increased $19 to $1,846 per pound, with 68% of transactions (one standard deviation) in the $1,131 to $2,561 per pound range. The average reported deal size increased to 2.3 pounds. In grams, the Spot price was $3.51 and the simple average price was $4.07.

 

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

 

 

The relative volume of warehouse flower expanded by almost 2% this week. The relative volume of greenhouse product contracted by the same proportion, while that for outdoor flower was stable.

The U.S. Spot Index averaged $1,621 per pound in November, off by 1.3% from the mean price of $1,642 per pound observed last month. November is the first month to see a downturn in its average national composite price since May of this year, in the early months of the COVID-19 pandemic when record-breaking sales that extended into the summer – and autumn in some cases – were just beginning to pick up. 

 

Notably, rates for each individual grow type on the national level were up in November relative to the prior month. The overall downturn in the U.S. Spot was due to increased proportions of lower-priced outdoor flower from this year’s harvest making its way to market. 

 

 

Additionally, the Spot Indices of some of the country’s largest state markets – namely California, Colorado, Oregon, and Washington – have begun to trend downward recently. We have seen sales level off in those states – and others – after peaking in the mid-late summer. The four aforementioned markets are also the ones where outdoor cultivation is most prevalent and the largest volumes of flower are traded.

December Implied Forward closes unchanged at $1,590 per pound.

 

The average reported forward deal size was 31 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 32%, and 22% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 41 pounds, 18 pounds, and 27 pounds, respectively.

 

At $1,590 per pound, the December Forward represents a discount of 0.2% relative to the current U.S. Spot Price of $1,594 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

State Working Toward Changing Product Testing Rules, Including Adding Screenings for Heavy Metals and Mycotoxins

Washington

Rulemaking to Implement New Mandatory Testing and Allow Tier 1 Producers to Expand Continues

Michigan

State Officials Release Instructions on Applying for Adult-Use Licenses; Recreational Market Will Open to Any Eligible Applicant Beginning March 2021

Arizona

Sales Volume Figures Jump to New Record in October; Wholesale Prices Rise on Strong Demand and New Required Testing

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Do you support wholesale market transparency?

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

27 November 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — November 27, 2020

CANADA CANNABIS SPOT INDEX (CCSI) 

Published November 27, 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$5.94 per gram this week, up 1.3% from last week’s C$5.86 per gram. This week’s price equates to US$2,067 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 Statistics Canada released retail sales data for September 2020. Sales have been increasing steadily across Canada. September continued that trend with sales of C$256M for the month, C$11.4M higher than August 2020 and up C$133M year-over-year. The monthly increase is not as large as those observed during the summer months, but it is still very notable. September’s figures point to an annual run rate of C$3.1B, which solidifies the prospect of retail sales eclipsing C$3B in 2021.

Source: Cannabis Benchmarks, Statistics Canada

On an average daily basis, September sales were higher across every province except for Newfoundland and Labrador. While average daily sales nationwide expanded by 8.2%, increases varied significantly at the provincial level. Of the major provinces, Ontario has been consistently outperforming all other provinces in daily sales growth. Ontario led the way with a 20.3% rise in average daily sales, while other major provinces saw increases of 4.0% to 6.5%. The growth in Ontario has been higher than expected, with daily sales averaging C$2.6M per day in September. 

Source: Cannabis Benchmarks, Statistics Canada

As of September 30, we counted 178 stores across Ontario. Increased accessibility along with more sales of premium cannabis 2.0 products has kept revenue growth strong in Canada’s most populous province. With the latest data point, we have recalibrated our model and now expect Ontario sales alone to eclipse C$1.2B in 2021.

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

27 November 2020 Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved.

November 20, 2020

U.S. Cannabis Spot Index — November 20, 2020

U.S. Cannabis Spot Index — Published November 20, 2020

U.S. Cannabis Spot Index down 2.4% to $1,603 per pound.

 

The simple average (non-volume weighted) price decreased $29 to $1,827 per pound, with 68% of transactions (one standard deviation) in the $1,124 to $2,529 per pound range. The average reported deal size was nominally unchanged at 2.2 pounds. In grams, the Spot price was $3.53 and the simple average price was $4.03.

 

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

 

 

The relative volume of warehouse flower contracted by almost 5% this week. The relative volumes of greenhouse and outdoor product expanded by about 1% and 4%, respectively.

The U.S. Spot Index has leveled off in the first three weeks of this month on slowing sales growth in numerous major markets, as well as new supply from this year’s autumn crop beginning to make its way to market in the West Coast states and Colorado. 

 

As Thanksgiving and the end-of-year holidays approach, the COVID-19 pandemic is reaching new levels of severity in the U.S. This has resulted in many states and localities with legal cannabis markets tightening restrictions recently. Based on data and observations from earlier this year, when even more strict coronavirus-related restrictions were implemented and sales soared to record levels, we do not expect that the current situation will on its own suppress demand in legal markets. Legal cannabis businesses were also declared essential and permitted to remain open during lockdowns imposed in the spring – with the exception of adult-use retailers in Massachusetts – and there have been no signs yet that state regulators are contemplating a different position should new stay-at-home orders be issued in the coming weeks. 

 

On the other hand, no new stimulus or relief legislation has been forthcoming from the federal government since March. New restrictions on businesses could result in more furloughed and laid-off workers. Additionally, a “benefits cliff” will occur the day after Christmas for certain types of pandemic-related unemployment insurance unless Congress and the President act to renew it. Notably, however, these larger economic trends have not negatively impacted legal cannabis demand to this point.

December Forward unchanged at $1,590 per pound.

 

The average reported forward deal size increased from 27 to 31 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 32%, and 22% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 41 pounds, 17 pounds, and 28 pounds, respectively.

 

At $1,590 per pound, the December Forward represents a discount of 0.8% relative to the current U.S. Spot Price of $1,603 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

State Working Toward Changing Product Testing Rules, Including Adding Screenings for Heavy Metals and Mycotoxins

Washington

Rulemaking to Implement New Mandatory Testing and Allow Tier 1 Producers to Expand Continues

Michigan

State Officials Release Instructions on Applying for Adult-Use Licenses; Recreational Market Will Open to Any Eligible Applicant Beginning March 2021

Arizona

Sales Volume Figures Jump to New Record in October; Wholesale Prices Rise on Strong Demand and New Required Testing

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

20 November 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — November 20, 2020

CANADA CANNABIS SPOT INDEX (CCSI) 

Published November 20, 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$5.86 per gram this week, down 1.2% from last week’s C$5.93 per gram. This week’s price equates to US$2,030 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 review the number of federal licenses issued for cultivation and processing. The licenses are issued under the Cannabis Act by Health Canada, which maintains a massive list of every license that has been issued to date. We examined each record and cleaned it up to produce some interesting statistics. We share this full license database – along with other data – with our Price Contributor Network. Click here to join our Price Contributor Network for free

 

Before we jump into the data, the following are the activities permitted by the standard types of licenses under discussion.

A cultivation license is required for:

 

  • cultivating indoors or outdoors, 
  • selling to provincial authorities, 
  • reselling to another licensed authorized seller, and/or 
  • conducting later stage services such as drying, trimming, and milling. 

 

A processing license is required for: 

 

  • any extraction processes, 
  • providing lab testing services, 
  • manufacturing cannabis 2.0 products, and 
  • selling finished products to provincial authorities.

 

Since the lead up to the opening of the country’s legal medical cannabis market, Health Canada has been very busy processing applications for cannabis market participants. The charts below show cultivation and processing licenses issued from October 2013 through October 2020, encompassing Canada’s initial medical cannabis legalization, followed by its approval of adult-use cannabis in 2018. The charts illustrate the uptick in the issuance of licenses ahead of adult-use legalization. Focusing on more recent events, it is notable that there was no real slow down in application approvals during the COVID lockdowns.

 

There have been a total of 308 cultivation licenses issued to date, with some companies having multiple locations across multiple provinces. Ontario has the largest share of cultivation licenses with 119, or 39% of the total. British Columbia has the next highest number of cultivation licenses with 76, or 25% of all licenses. 

 

In 2020 so far, there have been 95 licenses issued for cultivation. On the list are many numbered companies and unfamiliar names; our thinking is the larger licensed producers (LPs) have multiple licenses under different corporate entities. The firm with the most licenses is Aurora, with nine cultivation sites across four provinces. 

Source: Cannabis Benchmarks

On the processing side, there have been a total of 277 unique licenses issued to companies across Canada. Just as with cultivation licenses, Ontario disproportionately has the highest number of processing licenses with 122, or 44% of the total. 

Source: Cannabis Benchmarks

Likely, most of these licenses are not being utilized. That is probably a good thing in light of the large overhang of finished and unfinished products currently sitting in inventory at LP sites, provincial distributors’ storage facilities, and with retailers. The latest data from Statistics Canada shows 100,240 kg of finished products and 782,698 kg of unfinished products in inventory. Based on our assessment of current demand, this constitutes 39 months’ worth of supply.

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

20 November 2020 Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved.

November 13, 2020

U.S. Cannabis Spot Index — November 13, 2020

U.S. Cannabis Spot Index — Published November 13, 2020

U.S. Cannabis Spot Index down 0.3% to $1,642 per pound.

 

The simple average (non-volume weighted) price decreased $3 to $1,856 per pound, with 68% of transactions (one standard deviation) in the $1,131 to $2,581 per pound range. The average reported deal size decreased to 2.2 pounds. In grams, the Spot price was $3.62 and the simple average price was $4.09.

 

The relative frequency of trades for greenhouse flower expanded by over 4%. The relative frequencies of deals for indoor and outdoor product decreased by about 3% and 1%, respectively.   

 

The relative volume of warehouse flower contracted by almost 4% this week. The relative volumes of greenhouse and outdoor product expanded by about 1% and 3%, respectively.

New data out of several state markets published this week shows that strong demand is persisting. However, it also appears that some previously established seasonal sales trends – namely, declining retail revenue figures from September through October – are reasserting themselves after the COVID-19 pandemic altered consumer purchasing behavior earlier this year. 

 

Colorado saw a downturn in sales in September. Previously red-hot sales growth in Oklahoma’s medical market has cooled; another decline was reported in October, but retail revenues remain quite high compared to pre-COVID. 

 

Other sizable markets are exhibiting more idiosyncratic sales movement. October’s revenue figures out of Illinois represent another record high as the state’s young adult-use market continues to expand. Late-reported data for July and August out of Nevada shows that sales jumped to historic peaks after slumping earlier in the pandemic. Expanded tourism combined with previous increases in local demand to catapult revenue to unprecedented levels.

 

 

Overall, while some states are still seeing sales increases and upward movement of wholesale prices, it appears that cooling demand growth in recent months has provided some breathing room for producers, particularly in more established state markets. The state Spot Indexes of California, Colorado, Oregon, and Washington have all leveled off in recent weeks.

December Forward unchanged at $1,590 per pound.

 

The average reported forward deal size increased from 23 to 27 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 43%, 34%, and 24% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 33 pounds, 17 pounds, and 28 pounds, respectively.

 

At $1,590 per pound, the December Forward represents a discount of 3.2% relative to the current U.S. Spot Price of $1,642 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:

Colorado

September Sales Settle Above $200M for Third Straight Month, but Represent a Decline from August

Nevada

Summer Sales Bounce Back After COVID-Induced Spring Slump, Reach Record Highs in Both July and August

Illinois

October Medical Cannabis Sales Rise to Over $33M, Bringing Monthly Total to Over $108M, Another New Record

Oklahoma

Medical Cannabis Sales Down Slightly for Fourth Straight Month, Fall to Just Above $75M in October

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

13 November 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved