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Cannabis Benchmarks ® Professional Service

Cannabis Benchmarks ® Professional Service

Designed To Help You Conduct Detailed Modeling & Analysis

Welcome to Cannabis Benchmarks® Professional Service

Benchmarks For Transparency, Efficiency and Returns

Inquire About Our Professional Service

In conjunction with GlobalView, an international leader in commodity data aggregation, distribution and analytics, Professional Service is designed for the cannabis business decision maker requiring the ability to conduct detailed modeling and analysis.

GlobalView’s award-winning front-end analytics and data management solution is known as MarketView®. ​It provides a variety of ways to display, track, and analyze real-time and historical market data as well as global news and proprietary data on your desktop, mobile, or in Excel, enabling a broad array of customer solutions.

Customer Use Cases

User_Like-128

Buyers and Sellers

Use price benchmarks to set price and transact with confidence.

crop-insurer

Crop Insurers

Use wholesale cannabis prices and yield analysis to build actuarial tables to determine crop insurance premiums.

accountant

Accountants

Use cannabis prices by type of grow to determine an asset’s value for an acquisition or divestiture. Additionally, market prices are used in preparing financial statements and tax returns, for example, in determining the value of inventory, as well as trade-related mark-to-market / fair value accounting.

debt

Debt And Equity Analysts

Rating a bond or stock can use the most applicable spot and forward prices (and the history) to evaluate the likelihood that a company can make interest payments or grow earnings per share.

investors

Investors

Can use the price streams to evaluate and compare competing investment opportunities (e.g., what’s a better investment, an indoor grow in Illinois or a greenhouse grow in Michigan?).

operators

Operators

Cultivation facilities and dispensaries looking to grow can determine the best investment: expansion of a current facility in one location or opening a second facility in a different location.

hedging

Hedge Funds

Can use the different price streams to optimize their portfolio of cannabis businesses, as well as implement trading and risk management programs using the spreads and correlations among and between different commodities and financial instruments. Additionally, they use price benchmarks to index and settle both physical and financial transactions.

risk-managers

Risk Managers

Use commodity prices to measure, report and manage a firm’s risk, for example, a hedge fund or trader’s Cash Flow at Risk (CFaR), or Earnings at Risk (EaR), as well as to comply with a variety of required filings, including mark-to-market / fair value accounting.

traders

Speculative/Futures Traders

Use the prices, spreads and correlations among and between different commodities and financial instruments to develop proprietary trading algorithms which could incorporate cannabis prices, even if they are trading soybeans, weather derivatives, bonds in farm equipment companies, or equities in fertilizer companies. Additionally, they use price benchmarks to index and settle financial transactions.

Cannabis Dashboard — US Spot Price Overview

This is the Cannabis Dashboard that users of MarketView will see upon subscribing to Cannabis Benchmarks® Professional Service. It is the user’s starting point, and it is completely customizable.
 
The dashboard allows users to pick and choose which cannabis data they would like to analyze, for example:​

 

  • US volume weighted average (all price observations, weighted by pounds)
  • US simple average (the average of all prices, not weighted by pounds)
  • US simple average for outdoor grown
  • US simple average for greenhouse grown
  • US simple average for indoor grown
  • The above price types by select states (e.g., CA, CO, OR, WA, NV, MI, IL, others)
  • U.S. Forward prices (the price buyers and sellers are agreeing to today for delivery at some point in the future)
Once the user selects the type of price data they would like to analyze, they can choose pre-set analyses or create/design their own graphs and charts. Overview of the image above:
  • Upper left corner shows the prices that can be scrolled through and selected.
  • Lower left corner shows the US volume weighted price which closed at $1,800 per pound the week of 2/19/16, down $77.61 from the prior week.
  • Upper right corner shows US dollar plotted against US volume weighted price of cannabis.
  • Lower right corner shows the forward prices (green line) and their moving average (red line) plotted against the actual prices (purple). This chart shows that those who bought using forward agreements paid less and saved money versus those that bought on the spot market (excluding a one-week dip in December, and then after the first week in February).

Why is this important and useful?

 
Once a user sets up the dashboard with the data and analyses used in their particular work flow, it will automatically update with new data as it becomes available, providing a quick way for users to see the prices and price changes important to them, without crunching numbers or re-running analyses.

Total Market View

This Total Market layout shows different cannabis prices across the top:

  • The US Price is calculated from the outdoor, greenhouse and indoor prices.
  • The second row shows some of the other agricultural products that can be analyzed with cannabis prices, including corn, soybeans, wheat and canola.
  • The third row show some of the other macroeconomic and financial market data that can be analyzed with cannabis prices, including the US dollar, S&P 500, 10yr Treasury and Fed Funds Rate.
  • This view of the total market can be customized to show commodity and market data that are of interest to the viewer.
  • ​A high level listing of the other types of data that can be analyzed with the cannabis data (including agricultural products, energy products, and weather data) are included as a separate PDF attachment (see “GlobalView Data Listing”)
Why is this important and useful?
With so many different commodity verticals, financial instruments, and other data against which cannabis prices can be modeled, this Total Market view allows users to set up analyses for simultaneous viewing of all the verticals impacting their business or in which they trade.

Soybean Vs Cannabis Correlation Study

In this chart, the price of cannabis is correlated with the price of soybeans.

Why is this important and useful? 

This correlation study can be done with cannabis vs. any other agricultural commodity, and just as easily with energy, weather, equity prices, etc. Traders use correlations to create proprietary trading algorithms. A farmer or trader that finds a positive or negative correlation can use that knowledge to hedge against a price drop of the underlying commodity or to make a speculative trade. More simply, if ice cream sales correlate with warm sunny weather, those that produce and sell ice cream could hedge by buying and selling umbrellas, which have an inverse correlation with warm sunny weather.

Spread – Indoor Grown Vs Greenhouse Grown

One of the many strengths of the MarketView platform is the ease with which users can create and plot spreads or differentials… the difference between two different geographic locations, two different commodities, two different time periods, etc.

In this example, we see the revenue per pound for cannabis grown indoor (white line) with the revenue per pound for cannabis grown in a greenhouse (blue line).

Why is this important and useful?

Spreads provide an indication of relative price strength between two different items. This has wide application. Traders use spreads to find arbitrage opportunities. Investors and lenders can use the different revenue streams in their pro forma analyses to evaluate which might be a better investment.

Spread – Volume Weighted California Vs. Volume Weighted Colorado

In this example, we see the revenue per pound for cannabis grown in California (white line) with the revenue per pound for cannabis grown in Colorado (blue line).

Why is this important and useful?

As noted above, spreads have wide applications for traders and investors. If a multi-facility grower has operations in both states and has enough capital to expand just one facility, which one should it be? The owner knows the cost of goods sold, but how much will they get for their product? This answers their question. Same for any investor looking to build a portfolio of grow operations. The flip side applies to dispensaries. They can evaluate retail prices in California and Colorado to gauge how much revenue they can generate, but what is their cost of goods? We answer this question, helping them determine which states are best for entry or expansion.

Yield Analysis – An Acre Of Cannabis Vs. An Acre Of Wheat (And Moving Average)

In this chart we see the revenue generated from one acre of cannabis in Colorado minus the revenue generated from one acre of wheat (green line) and the moving average (red line). This analysis shows us that at current market prices, an acre of cannabis in Colorado produces over $4 million more revenue per harvest than an acre of wheat.

Why is this important and useful?

In MarketView, users can conduct yield analysis across a multitude of crops. If they know the cost of their inputs, then yield analyses can be used to calculate the margin on an acre for each crop and determine whether or not they should switch or rotate crops. Besides industrial hemp—which we will start tracking later this year—the return on cannabis is orders of magnitude larger than all of the other crops, at current market prices.

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