June 24, 2022

U.S. Cannabis Spot Index — June 24, 2022

U.S. Cannabis Spot Index — Published June 24, 2022

The U.S. Cannabis Spot Index decreased 0.1% to $1,067 per pound.

 

The simple average (non-volume weighted) price increased $9 to $1,371 per pound, with 68% of transactions (one standard deviation) in the $590 to $2,152 per pound range. The average reported deal size decreased to 2.5 pounds. In grams, the Spot price was $2.35 and the simple average price was $3.02.

 

The relative transaction frequency of indoor product was up 1%, while that of greenhouse product fell 1%. Outdoor transaction frequency was unchanged on the week. 

    

 

The relative volume of indoor flower rose 1%, that of greenhouse flower fell 1%, and that of outdoor flower was unchanged.

 

The Cannabis Benchmarks U.S. Spot Index barely moved this week. The national wholesale flower price lost $1 to end the week at $1,067 due to a mixed performance among legacy and high population states with younger markets. 

 

Narrowing spot price losses in legacy states is a sign that volatility is draining from the market as seasonal demand starts to pick up. Lower volatility typically means the downside is losing steam and subsequent small moves higher can form the basis of a rebound in price. 

 

Fundamental factors are keeping legacy state cannabis markets from making much headway with oversupply in the outdoor market, which is creating price contagion in the indoor and greenhouse markets. Anecdotally, there is evidence the market is also weighed down by large cannabis operators selling into falling markets, though recent price action suggests sales to raise money for business expenses are dissipating in states like Massachusetts, Illinois, and Michigan. 

 

From an economic perspective, cannabis purchases are largely discretionary – items we like, but do not have to have. With topline inflation – food and energy prices – pressing consumers, the pullback in discretionary spending is the rational response. Pandemic related wage increases were 8% according to the U.S. Department of Labor. Inflation was running at 8.6% in May. The back of the envelope calculation is a 0.6% loss in wages year-on-year. Personal consumption expenditures have been increasing due to inflation, not wage increases, and because of “base effects” – measuring against pandemic-induced loss of wages – subsequent measures may be lower in the coming months.

 

 

As the U.S. economy starts to shrink in response to higher interest rates, falling wages, and lower consumer spending, some businesses will not weather the triple whammy of these effects. The aftermath of such economic stressors has typically included the shuttering of businesses and shrinking of inventories as inefficient businesses fall in the wake of economic stressors. After the cannabis industry weathers the vicissitudes of the larger economy, it is likely the industry will emerge more efficient, thus stronger and better able to navigate subsequent economic headwinds.

 

July 2022 Implied Forward assessed down $70 to close at $1,075 per pound.

 

The average reported forward deal size decreased to 84 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 37%, and 18% of forward arrangements, respectively.

 

The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 88 pounds, 88 pounds, and 67 pounds, respectively.

 

 

At $1,075 per pound, the July 2022 Implied Forward represents a premium of 0.8% relative to the current U.S. Spot Price of $1,067 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

Large Cultivation Licenses to Become Available in 2023

Michigan

May Sales Down Slightly, Retain Most of April Surge

Arizona

Sales Soften in April as Indoor Flower Price Dives

Washington

State Economists Project Cannabis Demand to Steady at Below Pandemic Levels

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

24 June 2022.  Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — June 24, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending June 24, 2022
CCSI image 1 2022-06-24

*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$5.22 per gram this week, up 0.5% from last week’s C$5.19 per gram. This week’s price equates to US$1,826 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.

SOURE: Cannabis Benchmarks, Health Canada
  • Health Canada data for the number of active registered medical cannabis clients is currently available from October 2018 to September 2021, and is shown in the chart above. 

 

  • Medical cannabis patient registrations have been on a steady decline with the inception of legal recreational cannabis markets in October 2018, except for the initial months of the COVID pandemic when retail shops were closed. Based on recent data, we observe roughly 3,000 fewer active registered medical cannabis clients each month.

  • Provinces with well-developed recreational retail store footprints have seen the biggest loss in medical clients. Alberta, with the highest number of stores per capita, has seen active registrants drop by 57% since legalization. On the other hand, Quebec, with only 89 provincial-run retail cannabis stores currently, has seen patient registrations increase by 64%.

 

  • Since recreational cannabis was legalized, the total number of medical cannabis shipments has dropped by a larger magnitude than the decline in registered clients. Total monthly shipments in October 2018 were 143,752, which fell by 34% to 94,420 in September 2021.

  • Cannabis Benchmarks attributes the transfer of cannabis consumers from medicinal to the recreational path to increasing accessibility in the latter sector (both in terms of storefronts and online shopping), lower prices, larger product variety with similar potencies, and better education.

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

24 June 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

June 17, 2022

U.S. Cannabis Spot Index — June 17, 2022

U.S. Cannabis Spot Index — Published June 17, 2022

The U.S. Cannabis Spot Index decreased 4.1% to $1,068 per pound.

 

The simple average (non-volume weighted) price decreased $32 to $1,362 per pound, with 68% of transactions (one standard deviation) in the $593 to $2,131 per pound range. The average reported deal size increased to 2.6 pounds. In grams, the Spot price was $2.35 and the simple average price was $3.00.

 

The relative transaction frequency of indoor product was unchanged this week, that of greenhouse fell 1%, and that of outdoor product rose 1%.   

 

 

The relative volume of indoor flower rose 2%, that of greenhouse flower fell 3%, and that of outdoor flower rose 1%.

 

U.S. Spot price fell $46 this week to $1,068 per pound on the back of net losses of $24 per pound in legacy states. Oregon fell $26 and Washington State was off $11, against gains of $5 in California and $7 in Colorado. 

 

Adding to the pressure on Cannabis Benchmarks U.S. Spot Index are losses in Illinois of $67 per pound, a $45 loss in Michigan, a $41 decline in Arizona, a $25 decrease in Oklahoma, and a $46 slide in New Mexico. 

 

It remains to be seen if Illinois spot retraces the entire gain from Spring 2020, when spot traded from $3,250 up to $3,900 per pound as the pandemic took hold. Given the state is dominated by a small number of very large growers, there may be an attempt to hold the line near current price, but the technical and statistical outlook suggests a retest of the $3,200 level is in the cards.

 

Michigan spot is trading up nearly $300 from an all-time low in early May 2022, even as the odds of ever seeing the high $2,700s again shrink against an uncapped licensing scheme and the likelihood of an ever-larger outdoor crop. 

 

Oklahoma prices are also weighed down by the state’s massive number of cultivation licenses – a situation the state is addressing with a license moratorium beginning in August 2022.

 

New Mexico prices remain in a broad uptrend; price has softened within the trend. New Mexico greenhouse-grown product has been bid up as indoor-grown prices remained out of reach for many small retailers. The indoor / greenhouse spread is at $52 this week, versus $511 in April 2022 when the adult use market opened. 

 

Alaska spot has put together five weeks of gains and is trading at nearly $2,300 per pound. 

 

 

Massachusetts spot ticked up $48 per pound this week. A turnaround from current levels can only be achieved if the market can put together weeks or even months of incremental gains and avoid breaking below the all-time low set last week.

 

July 2022 Implied Forward assessed down $70 to $1,145 per pound.

 

The average reported forward deal size was 87 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 45%, 37%, and 18% of forward arrangements, respectively. 

 

The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 90 pounds, 88 pounds, and 67 pounds, respectively.

 

 

At $1,145 per pound, the July 2022 Implied Forward represents a premium of 7.2% relative to the current U.S. Spot Price of $1,068 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

Sales Slump Extends in April

Massachusetts

Sales Slip Amid Price Crash

New Jersey

First Month Sales Top $24 Million, Average Daily Sales $4.8 Million

Montana

Yellowstone Flood Imperils Cannabis Business

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Do you support wholesale market transparency?

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

17 June 2022.  Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — June 17, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending June 17, 2022
CCSI image 1 2022-06-17

*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$5.19 per gram this week, up 0.9% from last week’s C$5.14 per gram. This week’s price equates to US$1,819 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.

SOURE: Cannabis Benchmarks, Health Canada
  • Health Canada data for the number of active registered medical cannabis clients is currently available from October 2018 to September 2021, and is shown in the chart above. 

 

  • Medical cannabis patient registrations have been on a steady decline with the inception of legal recreational cannabis markets in October 2018, except for the initial months of the COVID pandemic when retail shops were closed. Based on recent data, we observe roughly 3,000 fewer active registered medical cannabis clients each month.

  • Provinces with well-developed recreational retail store footprints have seen the biggest loss in medical clients. Alberta, with the highest number of stores per capita, has seen active registrants drop by 57% since legalization. On the other hand, Quebec, with only 89 provincial-run retail cannabis stores currently, has seen patient registrations increase by 64%.

 

  • Since recreational cannabis was legalized, the total number of medical cannabis shipments has dropped by a larger magnitude than the decline in registered clients. Total monthly shipments in October 2018 were 143,752, which fell by 34% to 94,420 in September 2021.

  • Cannabis Benchmarks attributes the transfer of cannabis consumers from medicinal to the recreational path to increasing accessibility in the latter sector (both in terms of storefronts and online shopping), lower prices, larger product variety with similar potencies, and better education.

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

17 June 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

June 10, 2022

U.S. Cannabis Spot Index — June 10, 2022

U.S. Cannabis Spot Index — Published June 10, 2022

The U.S. Cannabis Spot Index decreased 4.1% to $1,114 per pound.

 

The simple average (non-volume weighted) price decreased $25 to $1,394 per pound, with 68% of transactions (one standard deviation) in the $612 to $2,176 per pound range. The average reported deal size was nominally unchanged at 2.5 pounds. In grams, the Spot price was $2.46 and the simple average price was $3.07.

 

The relative frequencies of transactions for indoor, greenhouse, and outdoor flower were unchanged this week. 

  

 

The relative volume of indoor flower fell 2%, while that of greenhouse flower rose 2% and that of outdoor flower rose 1%. 

 

The Cannabis Benchmarks U.S. Spot Index fell $47 this week, the third week in a row of losses that amount to $106 since late May. While some states are seeing small upticks in price or smaller losses, double-digit losses in high population states continue to drag the U.S. Spot lower. 

 

California spot lost $22 this week with outdoor-grown cannabis still under pressure in the mid-to-low $400s, a new record low for the most abundant outdoor stock in the nation. 

 

Massachusetts spot was off $66 this week. The last uptick in Massachusetts spot price was in the week of April 22, 2022 amid the 4/20 holiday, which capped a three-week run of higher weekly prices. 

 

Michigan spot shed $21 this week, also capping a three-week run of higher prices in which spot gained $175. Of note, the spread between indoor and greenhouse prices has blown out to $372 this week from just over $100 in mid-March. Generally speaking, instability in spreads is a forerunner of higher volatility, which typically means lower prices. 

 

The most salient feature of New Mexico’s market is the massive narrowing of the spread between indoor and greenhouse prices. At the beginning of April, when the adult use market opened, the spread between the two grow types was $677; this week it is $67. Narrowing spreads are typically indicative of higher prices.

 

 

Nevada spot price has shed $260 per pound since mid-March, but managed to tack on $24 this week. The spread between indoor and greenhouse-grown product has widened to $770 from just over $200 last November. To find out more about Nevada price volatility Cannabis Benchmarks spoke to Brandon Wiegand, President of the Nevada Cannabis Association. The interview is available in this week’s Premium Report.

 

July 2022 Implied Forward assessed down $20 to $1,215 per pound.

 

The average reported forward deal size was nominally unchanged at 86 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 43%, 38%, and 18% of forward arrangements, respectively. 

 

The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 92 pounds, 88 pounds, and 68 pounds, respectively.

 

 

At $1,215 per pound, the July 2022 Implied Forward represents a premium of 9.1% relative to the current U.S. Spot Price of $1,114 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:

Nevada

“Fill My Bowl or Fill My Gas Tank,” Nevadans Decide – Interview

Illinois

May Sales Slip 2.3% Month-on-Month

Maine

Maine Adult Use Sales on a 4 Month Tear

New Mexico

Second Month Not the Charm; Cannabis Sales Slip in May

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

10 June 2022.  Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved