May 28, 2021

U.S. Cannabis Spot Index — May 28, 2021

U.S. Cannabis Spot Index — Published May 28, 2021

U.S. Cannabis Spot Index up 0.9% to $1,583 per pound.

 

The simple average (non-volume weighted) price increased $11 to $1,813 per pound, with 68% of transactions (one standard deviation) in the $1,045 to $2,580 per pound range. The average reported deal size increased to 2.4 pounds. In grams, the Spot price was $3.49 and the simple average price was $4.00.

 

The relative frequency of transactions for outdoor flower decreased by almost 3%. The relative frequencies of deals for indoor and greenhouse product increased by about 2% and 1%, respectively.    

 

 

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

Cannabis Benchmarks has followed demand trends in the major markets we cover for several years. As we have documented for in excess of the past year, retail sales in legal cannabis markets across the U.S. boomed beginning in March 2020, as consumers and medical patients accelerated their purchasing from licensed outlets during the COVID-19 pandemic. Additionally, new adult-use systems in populous states like Michigan and Illinois began ramping up after opening in late 2019 and the beginning of 2020, respectively. 

 

Collective monthly retail revenue tallies from the 10 states with the largest markets for which Cannabis Benchmarks provides price assessments – California, Colorado, Oregon, Washington, Nevada, Michigan, Illinois, Massachusetts, Arizona, and Oklahoma – illustrate the dramatic expansion of cannabis demand captured by legal markets from 2020 to 2021. The following figures are derived primarily from official state data, but also include Cannabis Benchmarks estimates, and, in the case of monthly sales figures for California and Washington, research from Hedgeye Risk Management. 

 

In March 2020, combined retail sales from the 10 markets noted above totaled $1.01 billion. A year later, March 2021 saw the legal cannabis systems in the same states generate $1.53 billion in sales, a 51.5% year-over-year increase. 

 

April 2020 saw nine of the 10 states listed above combine to generate $993.2 million in retail revenue (adult-use retailers in Massachusetts were compelled to close in April 2020 as part of the state’s COVID-19 response), a figure that we estimate will rise to about $1.56 billion in April 2021, once sales from all states under discussion are documented. This would represent a 57.1% year-over-year spike. 

 

Many of the aforementioned markets saw sales records established in the early months of the pandemic. The sales data above shows that demand continued to grow to even more elevated levels, where it has stayed. Yet, even as demand expanded dramatically and rapidly, the year-over-year increase in the national composite wholesale flower price in the same period has not matched the magnitude of the sales boom. From March 2020 to March 2021, the monthly average U.S. Spot price rose by 9.2% from $1,381 to $1,508 per pound. The national volume-weighted composite price climbed by 11.7% from April 2020 to April 2021, from $1,367 to $1,527 per pound, a rate of increase that is only about one-fifth of that observed in the retail revenue data. 

June 2021 Implied Forward closes at $1,585 per pound.

 

The average reported forward deal size was 51.8 pounds. The proportions of forward deals for outdoor, greenhouse, and  indoor-grown flower were 52%, 35%, and 13% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 65 pounds, 41 pounds, and 29 pounds, respectively.

 

At $1,585 per pound, the June Implied Forward represents a premium of 0.1% relative to the current U.S. Spot Price of $1,583 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: New Licensed Retailers Begin to Open in Los Angeles

Illinois

Legislation to Create and Issue Additional Retail Licenses Approved by State House of Representatives

New Mexico

Regulators Publish Draft Rules for Adult-Use Producers

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

28 May 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — May 28, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending May 28, 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$5.55 per gram this week, down 0.6% from last week’s C$5.58 per gram. This week’s price equates to US$2,085 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 March 2021 with nationwide legal cannabis sales reaching a new monthly high of C$298.1M. 

 

Prior to March, we saw a decline in sales after December, which can be attributed to three main issues:

 

1) A decrease in spending after the holiday season;
2) fewer days in February; 

3) newly enforced COVID-related restrictions in Canada after the holiday season.

 

To correct for the different number of days in each month, we look at average daily sales in the chart below, which shows March 2021 edging out December 2020 by a small margin. March sales reached C$9.62M per day.

Source: Cannabis Benchmarks, Statscan

Looking at the month-on-month change in each province, sales have started to plateau in most provinces, with Ontario being the exception. Ontario’s cannabis industry continues its growth trajectory, as it plays a bit of catch-up in terms of the number of operational retailers in the province. 

Source: Cannabis Benchmarks, Statscan

While Ontario now has the largest overall retail store footprint, it still does not compare to the number of stores in Alberta per capita. Ontario has announced plans to continue to roll out stores, with an expectation of 1,000 stores by September. As seen in the chart above, sales growth in Canada this year is tied primarily to better accessibility in Ontario. Longer term, we are expecting a boost in sales across all provinces, as Canada’s legal market becomes more accessible, product variety and quality increases, and prices become increasingly competitive with or lower than those offered by illegal sources. 

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

28 May 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved.

May 21, 2021

U.S. Cannabis Spot Index — May 21, 2021

U.S. Cannabis Spot Index — Published May 21, 2021

U.S. Cannabis Spot Index down 0.1% to $1,568 per pound.

 

The simple average (non-volume weighted) price increased $4 to $1,802 per pound, with 68% of transactions (one standard deviation) in the $1,027 to $2,577 per pound range. The average reported deal size was nominally unchanged at 2.3 pounds. In grams, the Spot price was $3.46 and the simple average price was $3.97.

 

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

 

 

The relative volume of greenhouse flower expanded by almost 3% this week. The relative volumes of indoor and outdoor product contracted by about 2% and 1%, respectively.

Cannabis Benchmarks has followed demand trends in the major markets we cover for several years. As we have documented for in excess of the past year, retail sales in legal cannabis markets across the U.S. boomed beginning in March 2020, as consumers and medical patients accelerated their purchasing from licensed outlets during the COVID-19 pandemic. Additionally, new adult-use systems in populous states like Michigan and Illinois began ramping up after opening in late 2019 and the beginning of 2020, respectively. 

 

Collective monthly retail revenue tallies from the 10 states with the largest markets for which Cannabis Benchmarks provides price assessments – California, Colorado, Oregon, Washington, Nevada, Michigan, Illinois, Massachusetts, Arizona, and Oklahoma – illustrate the dramatic expansion of cannabis demand captured by legal markets from 2020 to 2021. The following figures are derived primarily from official state data, but also include Cannabis Benchmarks estimates, and, in the case of monthly sales figures for California and Washington, research from Hedgeye Risk Management. 

 

In March 2020, combined retail sales from the 10 markets noted above totaled $1.01 billion. A year later, March 2021 saw the legal cannabis systems in the same states generate $1.53 billion in sales, a 51.5% year-over-year increase. 

 

April 2020 saw nine of the 10 states listed above combine to generate $993.2 million in retail revenue (adult-use retailers in Massachusetts were compelled to close in April 2020 as part of the state’s COVID-19 response), a figure that we estimate will rise to about $1.56 billion in April 2021, once sales from all states under discussion are documented. This would represent a 57.1% year-over-year spike. 

 

Many of the aforementioned markets saw sales records established in the early months of the pandemic. The sales data above shows that demand continued to grow to even more elevated levels, where it has stayed. Yet, even as demand expanded dramatically and rapidly, the year-over-year increase in the national composite wholesale flower price in the same period has not matched the magnitude of the sales boom. From March 2020 to March 2021, the monthly average U.S. Spot price rose by 9.2% from $1,381 to $1,508 per pound. The national volume-weighted composite price climbed by 11.7% from April 2020 to April 2021, from $1,367 to $1,527 per pound, a rate of increase that is only about one-fifth of that observed in the retail revenue data. 

June 2021 Implied Forward unchanged at $1,585 per pound.

 

The average reported forward deal size was 51.7 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 53%, 35%, and 12% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 65 pounds, 41 pounds, and 27 pounds, respectively.

 

At $1,585 per pound, the June Implied Forward represents a premium of 1.1% relative to the current U.S. Spot Price of $1,568 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:

National

10 Largest Markets for Which Cannabis Benchmarks Assesses Prices Tally Over $1.5 Billion in Combined Sales in Both March & April 2021, Up Over 50% YoY

Colorado

New Bill Would Limit Concentrate Purchasing by Registered Patients, Impose New Packaging Requirements for Concentrates in Medical and Adult-Use Markets

Michigan

April’s Combined Adult-Use and Medical Sales Climb to New Record of Over $153 Million

Legalization Updates

Montana Governor Signs Bill to Implement Adult-Use Legalization; Sales to Begin January 2022

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

21 May 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — May 21, 2021

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending May 21, 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$5.58 per gram this week, down 0.8% from last week’s C$5.63 per gram. This week’s price equates to US$2,093 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 at Canada’s expanding role in international medical cannabis markets. 

Dried cannabis flower and cannabis oil exports out of Canada more than doubled in 2020, while imports dropped to virtually zero.

In 2020, Canada exported an endorsed quantity of 15,684 kilograms of dried flower for medical and scientific purposes, a 131% year-on-year increase. Endorsed exports of cannabis oil also expanded substantially year-on-year to 22,342 litres, a 73% increase. The endorsed quantities are the actual quantities of cannabis exported or imported, with the exporter required to provide the Minister of Health with information related to the shipment within 15 days after the date of exportation.

Source: Cannabis Benchmarks

Canadian licensed producers have always had a close eye on the international market. The overbuilding of cultivation capacity relative to domestic demand was intended to supply global medical-use markets. Additionally, Canadian cultivators would thereby be the first to establish intellectual property, economies of scale, brand power, and cultivation experience in a sector expected to grow dramatically. 

 

The big jump in 2020 exports is no coincidence. In Canada, increased exports were driven in part by more cultivators receiving the proper certification to export to European markets. For the medical and pharmaceutical industries, including medical cannabis, manufacturers need to achieve the European Union’s compliance certificate for Good Manufacturing Practices (EU GMP). For the cannabis industry, obtaining EU GMP certification requires an inspected facility that meets mandated production guidelines to release medical cannabis products into European markets.

 

In late 2016, Tilray became the first Canadian medical cannabis producer to legally export medical cannabis products to the European Union and Australia. Today, more than a dozen cannabis cultivation sites have received EU GMP certification, increasing the production capacity available to generate supply to export to the EU. Some of the other firms that have EU GMP certification include Canopy Growth, Aphria, Aurora, Zenabis, TerrAscend, Northern Green, and Eve & Co.

Another reason for the increased level of exports is the opening of more international markets and the expansion of existing ones. In 2019, 95% of the dried flower exported by Canadian producers was sold into Germany. While Germany continues to increase its overall import level, it is now second to Israel, which in 2020 imported 10 tons of flower, or 63% of all Canadian exports by weight. Israel’s imports of Canadian medical cannabis last year were almost double the volume of Germany’s. 

 

Over the next five years, we expect Canadian medical cannabis exports to continue to grow as more countries legalize and import medical cannabis. While Canada will continue to be a major global supplier, over the longer term we expect lower-cost operations located in Africa, Latin America, and the Caribbean will take a larger share of the market.

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

21 May 2021 Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved.

May 14, 2021

U.S. Cannabis Spot Index — May 14, 2021

U.S. Cannabis Spot Index — Published May 14, 2021

U.S. Cannabis Spot Index up 0.4% to $1,571 per pound.

 

The simple average (non-volume weighted) price increased $36 to $1,798 per pound, with 68% of transactions (one standard deviation) in the $1,027 to $2,568 per pound range. The average reported deal size was 2.3 pounds. In grams, the Spot price was $3.46 and the simple average price was $3.96.

 

The relative frequency of transactions for greenhouse flower increased by 2% this week. The relative frequencies of deals for indoor and outdoor product contracted by 1% each.

   

 

The relative volume of greenhouse flower expanded by 1% this week. That for outdoor product contracted correspondingly, while the relative volume of warehouse flower was unchanged.

Prior to this week, the recent upward trend of the U.S. Spot Index has been driven primarily by rising wholesale flower prices in California, which is by far the country’s largest market. Apart from Nevada, rates for flower in other large state cannabis markets in the western U.S. have been observed to be relatively stable or trending down. Additionally, Michigan’s state Spot price is on the downswing as production continues to expand. Similarly, composite prices in Illinois and Massachusetts are down compared to the end of 2020. 

 

In this week’s Premium Report, we detail tax collection data that shows the large expansion that took place in the Golden State’s licensed system in 2020. Interestingly, the data shows that less product entered the state’s wholesale market in Q4 than in Q3 2020, despite the autumn harvest taking place in the final quarter of the year. 

 

 

Whether this observation reflects a smaller outdoor crop remains to be seen; 2021 data has not yet been made available. Last year’s harvest may have been slow to be sold into the regulated market, as tax data indicates that demand in California subsided in Q4 2020 as well. In previous reports, we noted that accounts from market participants suggested that the state’s fall crop was largely spared from the record-setting wildfires that burned parts of the Emerald Triangle. In Oregon, growers collectively posted record-setting harvest numbers despite facing the same adversity and wholesale flower prices have begun to trend upward slightly in recent weeks.

June 2021 Implied Forward unchanged at $1,585 per pound.

 

The average reported forward deal size was 52.1 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 54%, 33%, and 13% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 65 pounds, 41 pounds, and 27 pounds, respectively.

 

At $1,585 per pound, the June Implied Forward represents a premium of 0.9% relative to the current U.S. Spot Price of $1,571 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 Cannabis Tax Collections Increased 63% from 2019 to 2020

Colorado

Total Year-to-Date Sales Through March Up 28% Compared to Q1 2020, Outpacing Last Year’s Accelerated Growth During COVID

Arizona

Sales Volume of Concentrates, Extracts in Medical Market Continued to Grow in April as Other Product Categories Saw Declines

Oklahoma

March’s Medical Cannabis Sales Rise to Over $89M as Patient Count Has Plateaued and Declined Slightly in Recent Months

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

14 May 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved