December 30, 2020

U.S. Cannabis Spot Index — January 1, 2021

U.S. Cannabis Spot Index — Week Ending January 1, 2021

U.S. Cannabis Spot Index up 1.6% to $1,531 per pound.

 

The simple average (non-volume weighted) price decreased $8 to $1,800 per pound, with 68% of transactions (one standard deviation) in the $1,064 to $2,536 per pound range. The average reported deal size decreased to 2.4 pounds. In grams, the Spot price was $3.38 and the simple average price was $3.97.

June 2021 Implied Forward initially assessed at $1,625 per pound.

 

The average reported forward deal size was unchanged at 38.6 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 50%, 35%, and 15% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 55 pounds, 21 pounds, and 26 pounds, respectively.

 

At $1,525 per pound, the February 2021 Implied Forward represents a discount of 0.4% relative to the current U.S. Spot Price of $1,531 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

1 January 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

December 23, 2020

CANADA CANNABIS SPOT INDEX — January 1, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending January 1, 2021
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$6.08 per gram this week, up 0.4% from last week’s C$6.05 per gram. This week’s price equates to US$2,145 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.

Last week, Statistics Canada released retail sales data for October 2020. The trend of steadily-increasing national sales totals continued. October sales finished the month at C$270 million, C$13M higher than September 2020 and up C$140M year-over-year. October’s figures point to an annual run rate of C$3.2 billion. We believe that this number will surely be eclipsed before Q3 2021 ends, due largely to what is anticipated to be a rapid increase in storefronts in Ontario.

Source: Statistics Canada, Cannabis Benchmarks

On an average daily basis, October sales were higher across every major province except for British Columbia. While average daily sales nationwide expanded by 1.7%, sales growth varied significantly at the provincial level. Of the major provinces, Ontario has been consistently outperforming all others in daily sales growth. Ontario led the way with a 4.1% rise in average daily sales, while British Columbia saw a decrease of 0.5%. 

Source: Statistics Canada, 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

01 January 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved.

U.S. Cannabis Spot Index — December 25, 2020

U.S. Cannabis Spot Index — Published December 25, 2020

U.S. Cannabis Spot Index down 1.5% to $1,506 per pound.

 

The simple average (non-volume weighted) price decreased $8 to $1,808 per pound, with 68% of transactions (one standard deviation) in the $1,076 to $2,540 per pound range. The average reported deal size increased to 2.5 pounds. In grams, the Spot price was $3.32 and the simple average price was $3.99.

 

The relative frequencies of trades for each grow type were essentially stable from last week. 

 

 

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

The U.S. Spot Index closed 2020 at $1,506 per pound, up 7.8% from the rate of $1,397 per pound observed at the outset of the year. However, the final two months of this year saw the national composite price decline after climbing steadily from late May through late October. The U.S. Spot averaged $1,524 per pound in December, off by 6% from November’s monthly mean of $1,621 per pound. National wholesale flower prices were pulled down by falling rates in some of the largest markets, such as California, Colorado, and Oregon, while upward trends in states like Nevada and Michigan subsided in the final month of the year. 

 

For 2020 overall, the U.S. Spot averaged $1,471 per pound, up 15.6%, or almost $200, from 2019’s annual mean composite price of $1,273 per pound. 2020 is the second consecutive year in which the U.S. Spot’s annual average exceeded that from the year before, after national wholesale prices declined from 2016 through 2018. 

 

 

Growth in existing markets – including California, Colorado, Oregon, and others – fueled in large part by expanded demand observed during the COVID-19 pandemic this year, pushed up wholesale prices in 2020. The establishment and growth of new and younger adult-use systems in Massachusetts, Michigan, and Illinois also injected more high-priced transactions for wholesale flower into our data than have been observed in prior years.

January 2021 Implied Forward down $40 to $1,500 per pound.

 

The average reported forward deal size was unchanged at 36.5 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 36%, and 18% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 54 pounds, 21 pounds, and 23 pounds, respectively.

 

At $1,500 per pound, the January Implied Forward represents a discount of 0.4% relative to the current U.S. Spot Price of $1,506 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

Exclusive State Data Shows Volume of Flower, Trim, Fresh Plants Traded Wholesale in California from 2018 through Q3 2020

Colorado

State Spot Index Closes the Year Down Almost $200 from Late October Peak

Nevada

Wholesale Flower Prices Leveled Off in Final Two Months of the Year After Previously Climbing on Strong Summer Demand

Arizona

Monthly Average Spot Index Jumps Over 8% in December with Adult-Use Sales Expected to Begin in March or April 2021

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

25 December 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — December 25, 2020

CANADA CANNABIS SPOT INDEX (CCSI) 

Published December 25, 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$6.05 per gram this week, down 2.4% from last week’s C$6.20 per gram. This week’s price equates to US$2,140 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 the Ontario Cannabis Store (OCS), the body that regulates the province’s cannabis market, released their Q2 Cannabis Insights report for the period from July through September 2020. The report contains a wide variety of useful data to show how Ontario’s market is developing. In today’s report, we focus specifically on price. 

 

The legal Canadian cannabis market has faced strong competition from illicit supply chains, due to high product prices and few stores. The OCS’s latest report shows those market dynamics are changing.

The report shows that not only did the brick and mortar retail footprint grow to 178 stores from 100, but the price of dried flower on the OCS online store dropped by 9%, falling further below the price of cannabis sold through illegal mail-order marijuana (MoM) sites after doing so in Q1 for the first time. The average price of legal dried flower, including sales taxes, was C$6.41/gram. The reduction was largely a result of discount lines of cannabis released by the big Licensed Producers. In comparison, the average dried flower price on illegal MoM sites rose by C$0.19 to C$7.98/gram. While the quality of the dried flower was not taken into consideration for this price comparison, legal product has some overall advantages in this regard due to required quality assurance and safety testing, prohibitions on pesticide use, and standards for accuracy in labeling, among other regulations.

 

Source: OCS

Clearly, lower prices have helped legal sellers build market share. The report indicates 36.2% of cannabis sales are now being made through legal channels. We believe that, along with lower prices, COVID lockdowns have pushed consumers to more regulated and inspected products. 

 

Overall, this report once again emphasizes that positive trends for the legal cannabis industry are emerging and being cemented as the regulated market develops.

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

25 December 2020 Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved.

December 18, 2020

U.S. Cannabis Spot Index — December 18, 2020

U.S. Cannabis Spot Index — Published December 18, 2020

U.S. Cannabis Spot Index up 0.4% to $1,530 per pound.

 

The simple average (non-volume weighted) price increased $3 to $1,816 per pound, with 68% of transactions (one standard deviation) in the $1,084 to $2,548 per pound range. The average reported deal size was nominally unchanged at 2.4 pounds. In grams, the Spot price was $3.37 and the simple average price was $4.00.

 

This week’s national transaction stats were essentially stable from last week. Members of our Price Contributor Network in Oregon pointed out this week that wholesale purchasing has subsided recently, in part due to the slowdown in sales we have noted in recent months. Additionally, due to section 280E of the Internal Revenue Code, which prohibits cannabis operations from deducting many expenses that are available for traditional businesses, it is more favorable for tax purposes for dispensaries and retailers to have less inventory on hand at the close of the calendar year.

The U.S. Spot Index is currently trending downward for the first time since earlier this year, when it largely declined from mid-February through late May. Interestingly, the course of the national composite price this year has broadly echoed that observed in 2019, despite the disruption of the COVID-19 pandemic, as well as the opening or expansion of what have become significant new markets in 2020. In both 2019 and 2020, the U.S. Spot trended downward through Q1 and into Q2 before ascending through the late spring, summer, and early autumn. Also like last year, the national average rate for flower has turned downward after rising into the midst of the outdoor harvest season. In 2019 the U.S. Spot peaked in mid-November; this year the current year-to-date high was observed in late October. 

 

 

Looking ahead, early reports from the West Coast suggest that damage and losses suffered by this year’s autumn crop from the devastating wildfire season may not be as severe as was feared just a couple months ago. Retailers are at this point likely stocked up for what has become a customary holiday season sales boost, but the first two months of any given year typically bring with them declining demand until retail revenues pick back up again in March. While the coronavirus and accompanying restrictions led to some departures from established monthly sales trends, this autumn and early winter has seen demand subside, in line with historical observations. The commencement of adult-use sales in Arizona, which are expected to begin in March or April 2021, are providing some upward pressure on national wholesale prices already, but it has not been sufficient to stop the downward direction of the U.S. Spot.

January 2021 Implied Forward down $25 to $1,540 per pound.

 

The average reported forward deal size was 36.5 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 36%, and 18% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 54 pounds, 21 pounds, and 23 pounds, respectively.

 

At $1,540 per pound, the January Implied Forward represents a premium of 0.7% relative to the current U.S. Spot Price of $1,530 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

Report: Early Accounts Indicate Outdoor Harvest Largely Unscathed by Wildfires

Colorado

Taxes on Transfers of Flower by Adult-Use Cultivators to Integrated Retailers Will Increase by Over 30% in Q1 2021

Oregon

Ongoing Investigations Into Vape Products Will Result in Some Inventory Removed from Circulation

Michigan

Detroit to License Adult-Use Retailers as Soon as June 2021

Arizona

State Officials Already Issued Initial Draft Rules for New Adult-Use Market, More Iterations Expected in Coming Weeks

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

18 December 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved