November 23, 2022

U.S. Cannabis Spot Index — November 25, 2022

U.S. Cannabis Spot Index — Published November 25, 2022

The U.S. Cannabis Spot Index increased 2.6% to $999 per pound.

 

The simple average (non-volume weighted) price decreased $18 to $1,309 per pound, with 68% of transactions (one standard deviation) in the $491 to $2,127 per pound range. The average reported deal size was 2.6 pounds. In grams, the Spot price was $2.20 and the simple average price was $2.89.

 

The relative frequency of transactions for product of each grow type was virtually the same as last week.  

 

 

The relative volume of indoor product rose 2%, while that of greenhouse product declined 3%. Outdoor flower’s relative volume increased by 1%. 

 

 

The following excerpt from our Premium Report is repeated from last week, November 18th.

The U.S. Spot Index fell $18 this week on the back of legacy state price slippage and a price rout in the Southwest. U.S. spot price remains below the $1,000 per pound handle and looks set to return to the all-time low at $954. Widespread oversupply generated and distributed by both licensed and unlicensed actors is seeping across the country, enabled in part by the proliferation of legalization in contiguous states.

The “Sand States” – Arizona, New Mexico, Oklahoma, and Nevada – are a microcosm of the nation’s cannabis markets with prices in these contiguous states being driven ever-lower despite vastly different regulatory regimes. Additionally, this bloc is adjacent to major markets with severe oversupply issues. Colorado’s spot price is less than half of New Mexico’s. Nevada and Arizona share their longest state borders with California.

Arizona spot price fell $59 per wholesale pound this week, making a new all-time low. Oklahoma spot fell $49, New Mexico dropped $46 per pound, and Nevada spot fell $29 per wholesale pound.

New England, New York, and New Jersey will likely end up looking very much like the Sand States, but on a shorter time line; that is, the sun will shine on those states only as long as not all of them are open for business.

There is a cannabis oversupply issue across the nation, with some states suffering nearly immediate price meltdowns within a year of opening their adult use markets. The surrounding states have already been through the price cycle upon becoming well-supplied; in fact, they are so well-supplied that product inevitably makes its way into adjacent states. With the supply / demand question fully answered, it is well past time to attack the issue of cannabis industry viability on the federal level.

December 2022 Implied Forward unchanged to close at $960 per pound.

 

The average reported forward deal size was 74.1 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 45%, 43%, and 13% of forward arrangements, respectively.

 

The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 77.9 pounds, 71.4 pounds, and 69.9 pounds, respectively.

 

 

At $960 per pound, the December 2022 Implied Forward represents a discount of 3.9% relative to the current U.S. Spot Price of $999 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

Q3 Sales Slip 10% from Prior Quarter

Massachusetts

New CCC Chair Outlines Priorities – Interview

Oklahoma

Sales Continue to Decline and Licenses Increase Despite Moratorium

New York

First Adult Use Retail Licenses Issued, Will be Allowed to Deliver

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

25 November 2022.  Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — November 25, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending November 25, 2022
CCSI image 1 2022-11-25

*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$5.31 per gram this week, up 1.3% from last week’s C$5.24 per gram. This week’s price equates to US$1,798 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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SOURE: Cannabis Benchmarks, Health Canada
  • In this week’s report, we focus on the battle between legal and illicit supply. In the first few years of cannabis legalization, the regulated Canadian market has faced strong competition from illicit supply chains, but that situation started to change quickly. Falling retail prices, increased product variety, and better accessibility through new storefronts, pick-up / delivery options, and online marketplaces all helped bring legal cannabis to consumers.
  • Today, we look specifically at the situation in Ontario, where the most recent quarterly report published by the Ontario Cannabis Store (ocs.ca) estimates the legal market made up 57% of all cannabis sales as of Q1 2022. Up until the most recently reported quarter, legal cannabis’ share of total sales had been trending higher. Yet, despite both sales and store counts in Ontario growing quarter-on-quarter in Q1 2022, the legal market’s share of total sales slipped a bit from the prior period.
  • The chart below shows the average number of stores in Ontario over the past thirteen quarters, as tracked by Cannabis Benchmarks and the OCS, versus the legal cannabis market’s share of total sales. The growth of the legal cannabis sector had a very strong correlation to the number of storefronts opening up until the most recently reported quarter. With 1,460 stores open at the end of March 2022, or 127 more stores than the end of December 2021, we would have expected the legal market’s share of total sales to expand. Instead, we saw the legal cannabis sector’s progress in capturing market share lose momentum.
  • Sales for Ontario continue to grow. The latest recreational sales data from Statistics Canada pegs Ontario sales in August 2022 at C$154M. If we assume that this number only represents 57% of total cannabis sales, then the total Ontario cannabis market from all channels, legal and illegal, is roughly C$3.2B annualized.

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

25 November 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

November 18, 2022

U.S. Cannabis Spot Index — November 18, 2022

U.S. Cannabis Spot Index — Published November 18, 2022

The U.S. Cannabis Spot Index decreased 1.9% to $974 per pound.

 

The simple average (non-volume weighted) price decreased $58 to $1,327 per pound, with 68% of transactions (one standard deviation) in the $503 to $2,150 per pound range. The average reported deal size was 2.5 pounds. In grams, the Spot price was $2.15 and the simple average price was $2.92.

 

The relative transaction frequency of indoor product fell 1%, while that of greenhouse product rose 1%. Outdoor transaction frequency rose 1%. 

 

 

The relative volume of indoor product fell 2%, while that of greenhouse product rose 3%. Outdoor flower’s relative volume fell 1%.

 

 

The U.S. Spot Index fell $18 this week on the back of legacy state price slippage and a price rout in the Southwest. U.S. spot price remains below the $1,000 per pound handle and looks set to return to the all-time low at $954. Widespread oversupply generated and distributed by both licensed and unlicensed actors is seeping across the country, enabled in part by the proliferation of legalization in contiguous states.

The “Sand States” – Arizona, New Mexico, Oklahoma, and Nevada – are a microcosm of the nation’s cannabis markets with prices in these contiguous states being driven ever-lower despite vastly different regulatory regimes. Additionally, this bloc is adjacent to major markets with severe oversupply issues. Colorado’s spot price is less than half of New Mexico’s. Nevada and Arizona share their longest state borders with California.

Arizona spot price fell $59 per wholesale pound this week, making a new all-time low. Oklahoma spot fell $49, New Mexico dropped $46 per pound, and Nevada spot fell $29 per wholesale pound.

New England, New York, and New Jersey will likely end up looking very much like the Sand States, but on a shorter time line; that is, the sun will shine on those states only as long as not all of them are open for business.

There is a cannabis oversupply issue across the nation, with some states suffering nearly immediate price meltdowns within a year of opening their adult use markets. The surrounding states have already been through the price cycle upon becoming well-supplied; in fact, they are so well-supplied that product inevitably makes its way into adjacent states. With the supply / demand question fully answered, it is well past time to attack the issue of cannabis industry viability on the federal level.

December 2022 Implied Forward unchanged at $960 per pound.

 

The average reported forward deal size was 74 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 45%, 43%, and 13% of forward arrangements, respectively.

 

The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 78 pounds, 71 pounds, and 70 pounds, respectively.

 

 

At $960 per pound, the December 2022 Implied Forward represents a discount of 1.4% relative to the current U.S. Spot Price of $974 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:

Arizona

Total Cannabis Sales Down 6 Months Running

Michigan

October Sales Slide Amid Price Rout

New Mexico

October Sales Eke Out Gain

New York

Court Throws Spanner Into CAURD Licensing

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Do you support wholesale market transparency?

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

18 November 2022.  Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — November 18, 2022

CANADA CANNABIS SPOT INDEX (CCSI) 

Week Ending November 18, 2022
CCSI image 1 2022-11-18

*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$5.24 per gram this week, up 0.5% from last week’s C$5.22 per gram. This week’s price equates to US$1,786 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.

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

18 November 2022 Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

November 11, 2022

U.S. Cannabis Spot Index — November 11, 2022

U.S. Cannabis Spot Index — Published November 11, 2022

The U.S. Cannabis Spot Index decreased 1.3% to $992 per pound.

 

The simple average (non-volume weighted) price increased $3 to $1,385 per pound, with 68% of transactions (one standard deviation) in the $531 to $2,238 per pound range. The average reported deal size was nominally unchanged at 2.4 pounds. In grams, the Spot price was $2.19 and the simple average price was $3.05.

 

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

 

 

The relative volume of indoor product fell 3%, while that of greenhouse product fell 1%. Outdoor flower’s relative volume rose 3%.

 

 

The U.S. Spot Index slid $13 this week as far-flung states both populous and new to the market saw price pressures. The U.S. spot volume weighted price hit an all-time low in the mid-$900s per pound at the end of last month, as Croptober 2022 kicked into high gear, but jumped over $1,000 last week as demand for fresh cannabis put a bid under prices in some states. This week the U.S. spot slipped below the $1,000 handle again.

California spot reached yet another new all-time low. Oregon spot fell through four-month trendline support last week. While Oregon’s October outdoor harvest shrunk by 28%, reports of late planting suggest there may be more harvests to come in November, which would put more pressure on price. New Mexico spot dived $232 lower, a result of more licenses, more competition, and low-priced outdoor product hitting the market. Massachusetts spot fell $69 per wholesale pound amid talk of companies shedding assets and seeking debt restructuring, on top of the state’s outdoor crop making its way to market.

As the cannabis industry develops, states in close proximity and with similar regulatory schemes are starting to see prices move in tandem. Competition between states is likely to become a driving force in cannabis pricing over the next year or two, due in large part to a very mobile populace, illicit trade, and competitive markets. As more states open for business, supply will no longer be an issue in large population centers on the East Coast and prices among those states will converge at lower levels. Ultimately, price differences across the country will shrink as supply continues to grow with more states coming online and few consumers more than a two hour drive from legal and / or competitively priced cannabis.

December 2022 Implied Forward unchanged at $960 per pound.

 

The average reported forward deal size was 75 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 42%, and 13% of forward arrangements, respectively.

 

The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 79 pounds, 73 pounds, and 72 pounds, respectively.

 

 

At $960 per pound, the December 2022 Implied Forward represents a discount of 3.3% relative to the current U.S. Spot Price of $992 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

Have Cannabis Sales Topped Out?

Illinois

October Adult Use Sales Inch Upward

Massachusetts

Adult Use Sales Down 3 Months Running; Retail Gram Price Dives 20%

Maine

October Cannabis Sales Slip – Again

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

11 November 2022.  Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved