November 25, 2020

U.S. Cannabis Spot Index — November 27, 2020

U.S. Cannabis Spot Index — Published November 27, 2020

U.S. Cannabis Spot Index down 0.5% to $1,594 per pound.

 

The simple average (non-volume weighted) price increased $19 to $1,846 per pound, with 68% of transactions (one standard deviation) in the $1,131 to $2,561 per pound range. The average reported deal size increased to 2.3 pounds. In grams, the Spot price was $3.51 and the simple average price was $4.07.

 

The relative frequency of trades for greenhouse flower decreased by 3%. The relative frequency of deals for indoor product increased by the same proportion, while that for transactions for outdoor flower was unchanged.

 

 

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

The U.S. Spot Index averaged $1,621 per pound in November, off by 1.3% from the mean price of $1,642 per pound observed last month. November is the first month to see a downturn in its average national composite price since May of this year, in the early months of the COVID-19 pandemic when record-breaking sales that extended into the summer – and autumn in some cases – were just beginning to pick up. 

 

Notably, rates for each individual grow type on the national level were up in November relative to the prior month. The overall downturn in the U.S. Spot was due to increased proportions of lower-priced outdoor flower from this year’s harvest making its way to market. 

 

 

Additionally, the Spot Indices of some of the country’s largest state markets – namely California, Colorado, Oregon, and Washington – have begun to trend downward recently. We have seen sales level off in those states – and others – after peaking in the mid-late summer. The four aforementioned markets are also the ones where outdoor cultivation is most prevalent and the largest volumes of flower are traded.

December Implied Forward closes unchanged at $1,590 per pound.

 

The average reported forward deal size was 31 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 32%, and 22% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 41 pounds, 18 pounds, and 27 pounds, respectively.

 

At $1,590 per pound, the December Forward represents a discount of 0.2% relative to the current U.S. Spot Price of $1,594 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:

Oregon

State Working Toward Changing Product Testing Rules, Including Adding Screenings for Heavy Metals and Mycotoxins

Washington

Rulemaking to Implement New Mandatory Testing and Allow Tier 1 Producers to Expand Continues

Michigan

State Officials Release Instructions on Applying for Adult-Use Licenses; Recreational Market Will Open to Any Eligible Applicant Beginning March 2021

Arizona

Sales Volume Figures Jump to New Record in October; Wholesale Prices Rise on Strong Demand and New Required Testing

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

27 November 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

November 20, 2020

U.S. Cannabis Spot Index — November 20, 2020

U.S. Cannabis Spot Index — Published November 20, 2020

U.S. Cannabis Spot Index down 2.4% to $1,603 per pound.

 

The simple average (non-volume weighted) price decreased $29 to $1,827 per pound, with 68% of transactions (one standard deviation) in the $1,124 to $2,529 per pound range. The average reported deal size was nominally unchanged at 2.2 pounds. In grams, the Spot price was $3.53 and the simple average price was $4.03.

 

The relative frequency of trades for greenhouse flower expanded by 3%. The relative frequency of deals for indoor product decreased by the same proportion, while that for transactions for outdoor flower was unchanged.

 

 

The relative volume of warehouse flower contracted by almost 5% this week. The relative volumes of greenhouse and outdoor product expanded by about 1% and 4%, respectively.

The U.S. Spot Index has leveled off in the first three weeks of this month on slowing sales growth in numerous major markets, as well as new supply from this year’s autumn crop beginning to make its way to market in the West Coast states and Colorado. 

 

As Thanksgiving and the end-of-year holidays approach, the COVID-19 pandemic is reaching new levels of severity in the U.S. This has resulted in many states and localities with legal cannabis markets tightening restrictions recently. Based on data and observations from earlier this year, when even more strict coronavirus-related restrictions were implemented and sales soared to record levels, we do not expect that the current situation will on its own suppress demand in legal markets. Legal cannabis businesses were also declared essential and permitted to remain open during lockdowns imposed in the spring – with the exception of adult-use retailers in Massachusetts – and there have been no signs yet that state regulators are contemplating a different position should new stay-at-home orders be issued in the coming weeks. 

 

On the other hand, no new stimulus or relief legislation has been forthcoming from the federal government since March. New restrictions on businesses could result in more furloughed and laid-off workers. Additionally, a “benefits cliff” will occur the day after Christmas for certain types of pandemic-related unemployment insurance unless Congress and the President act to renew it. Notably, however, these larger economic trends have not negatively impacted legal cannabis demand to this point.

December Forward unchanged at $1,590 per pound.

 

The average reported forward deal size increased from 27 to 31 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 32%, and 22% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 41 pounds, 17 pounds, and 28 pounds, respectively.

 

At $1,590 per pound, the December Forward represents a discount of 0.8% relative to the current U.S. Spot Price of $1,603 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:

Oregon

State Working Toward Changing Product Testing Rules, Including Adding Screenings for Heavy Metals and Mycotoxins

Washington

Rulemaking to Implement New Mandatory Testing and Allow Tier 1 Producers to Expand Continues

Michigan

State Officials Release Instructions on Applying for Adult-Use Licenses; Recreational Market Will Open to Any Eligible Applicant Beginning March 2021

Arizona

Sales Volume Figures Jump to New Record in October; Wholesale Prices Rise on Strong Demand and New Required Testing

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

20 November 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

November 13, 2020

U.S. Cannabis Spot Index — November 13, 2020

U.S. Cannabis Spot Index — Published November 13, 2020

U.S. Cannabis Spot Index down 0.3% to $1,642 per pound.

 

The simple average (non-volume weighted) price decreased $3 to $1,856 per pound, with 68% of transactions (one standard deviation) in the $1,131 to $2,581 per pound range. The average reported deal size decreased to 2.2 pounds. In grams, the Spot price was $3.62 and the simple average price was $4.09.

 

The relative frequency of trades for greenhouse flower expanded by over 4%. The relative frequencies of deals for indoor and outdoor product decreased by about 3% and 1%, respectively.   

 

The relative volume of warehouse flower contracted by almost 4% this week. The relative volumes of greenhouse and outdoor product expanded by about 1% and 3%, respectively.

New data out of several state markets published this week shows that strong demand is persisting. However, it also appears that some previously established seasonal sales trends – namely, declining retail revenue figures from September through October – are reasserting themselves after the COVID-19 pandemic altered consumer purchasing behavior earlier this year. 

 

Colorado saw a downturn in sales in September. Previously red-hot sales growth in Oklahoma’s medical market has cooled; another decline was reported in October, but retail revenues remain quite high compared to pre-COVID. 

 

Other sizable markets are exhibiting more idiosyncratic sales movement. October’s revenue figures out of Illinois represent another record high as the state’s young adult-use market continues to expand. Late-reported data for July and August out of Nevada shows that sales jumped to historic peaks after slumping earlier in the pandemic. Expanded tourism combined with previous increases in local demand to catapult revenue to unprecedented levels.

 

 

Overall, while some states are still seeing sales increases and upward movement of wholesale prices, it appears that cooling demand growth in recent months has provided some breathing room for producers, particularly in more established state markets. The state Spot Indexes of California, Colorado, Oregon, and Washington have all leveled off in recent weeks.

December Forward unchanged at $1,590 per pound.

 

The average reported forward deal size increased from 23 to 27 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 43%, 34%, and 24% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 33 pounds, 17 pounds, and 28 pounds, respectively.

 

At $1,590 per pound, the December Forward represents a discount of 3.2% relative to the current U.S. Spot Price of $1,642 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

September Sales Settle Above $200M for Third Straight Month, but Represent a Decline from August

Nevada

Summer Sales Bounce Back After COVID-Induced Spring Slump, Reach Record Highs in Both July and August

Illinois

October Medical Cannabis Sales Rise to Over $33M, Bringing Monthly Total to Over $108M, Another New Record

Oklahoma

Medical Cannabis Sales Down Slightly for Fourth Straight Month, Fall to Just Above $75M in October

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

13 November 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

November 6, 2020

U.S. Cannabis Spot Index — November 6, 2020

U.S. Cannabis Spot Index — Published November 6, 2020

U.S. Cannabis Spot Index down 0.7% to $1,647 per pound.

 

The simple average (non-volume weighted) price decreased $11 to $1,859 per pound, with 68% of transactions (one standard deviation) in the $1,115 to $2,603 per pound range. The average reported deal size increased to 2.3 pounds. In grams, the Spot price was $3.63 and the simple average price was $4.10.

 

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

 

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

With the close of October, much of the country’s legal outdoor crop has been harvested, but early reports out of Oregon state that it has not yet hit the market for the most part. It will likely be several weeks before significant portions of this year’s crop are dried, trimmed, tested, packaged, and sent to retailers. While the overall state of the harvest in West Coast states and Colorado is still unclear, some initial reports from market participants in Oregon indicate that some outdoor crops that were exposed to smoke and ash from the wildfires earlier this year are finishing favorably. Some are worried more about disruptions to power and water caused by the wildfires, and how that impacted the ability to care for growing plants, more so than smoke damage. 

 

In the meantime, the upward momentum of the U.S. Spot Index accelerated in October relative to September. While the national composite price last year rose to its annual peak in mid-November 2019, this year the last two weeks have seen consecutive downturns in the U.S. Spot.

 

 

Strong sales are continuing, however, with the holidays approaching as well. Adult-use markets in Massachusetts and Illinois both saw new monthly sales records set in October. It remains to be seen how – or if – the worsening COVID-19 pandemic will impact demand during the upcoming holiday season. Prior to this year, Thanksgiving and the end-of-year holidays had become a period when retailers run promotions and specials to drive sales, including dubbing the day after Thanksgiving “Green Friday,” to accompany “Black Friday” deals run by traditional retailers.

May 2021 Forward initially assessed at $1,565 per pound.

 

The average reported forward deal size was nominally unchanged at 23 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 40%, 36%, and 25% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 29 pounds, 17 pounds, and 23 pounds, respectively.

 

At $1,590 per pound, the December Forward represents a discount of 3.5% relative to the current U.S. Spot Price of $1,647 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:

Legalization Updates

Five States Legalized Cannabis in Some Form in Tuesday’s Elections: Arizona (Rec), Mississippi (Med), Montana (Rec), New Jersey (Rec), and South Dakota (Rec & Med)

Arizona’s Large Medical Program Well-Positioned to Expand to Serve Adult-Use Consumers

New Jersey’s Nascent Adult-Use Industry, Building on Small Medical Program, Will Need Time to Grow to Meet Massive In and Out-of-State Demand

Massachusetts

Adult-Use Retailers Set New Sales Record in October, Exceeding $83M; 2020’s YTD Tally Climbs to Over $542M

Illinois

Recreational Sales Top $75M in October, Another New Record, With Average Daily Sales Increasing Almost 8% from Prior Month

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

6 November 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

October 30, 2020

U.S. Cannabis Spot Index — October 30, 2020

U.S. Cannabis Spot Index — Published October 30, 2020

U.S. Cannabis Spot Index down 0.4% to $1,658 per pound.

 

The simple average (non-volume weighted) price decreased $9 to $1,870 per pound, with 68% of transactions (one standard deviation) in the $1,105 to $2,636 per pound range. The average reported deal size was nominally unchanged at 2.2 pounds. In grams, the Spot price was $3.66 and the simple average price was $4.12.

 

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

 

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

The U.S. Spot Index averaged $1,645 per pound this month, up 5.2% from September. October 2020’s national mean composite price is the highest observed since April 2017; it also represents a year-over-year increase of 14.9% relative to October 2019. The U.S. Spot and state-level Spot Indices for most major markets have been trending upward for much of the time that the COVID-19 pandemic has been with us. This week’s national composite rate is up by 22.2%, or roughly $300, from March 27, by which time most of the sizable state markets covered in our reporting had enacted stay-at-home orders. 

 

We have noted that there is some uncertainty regarding this year’s fall outdoor harvest due to the wildfires that ravaged the West Coast. It should also be pointed out that indoor production will likely see a boost with the help of cooler weather. Summer heat can strain climate control systems and negatively impact yield and product quality; and this summer saw record-breaking temperatures in numerous regions of the country, including the major markets on the West Coast and in Colorado, as well as in Arizona. 

 

Recent demand trends show sales plateauing in recent months, albeit at elevated levels. Increased supply from both outdoor and indoor growers may help moderate wholesale price increases. However, with the coronavirus surging across the country, increased restrictions and possibly even new shutdowns could result in consumers diverting disposable income from disallowed activities to cannabis, behavior that was likely a big contributor to earlier sales growth.

November Forward closes up $35 to $1,625 per pound.

 

The average reported forward deal size increased to 23 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 39%, 38%, and 24% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 27 pounds, 17 pounds, and 24 pounds, respectively.

 

At $1,625 per pound, the November Forward represents a discount of 2% relative to the current U.S. Spot Price of $1,658 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

Report from Regulators Show Concentrates Commanded Increasing Market Share, Industry Consolidation Advanced in 2019

Oregon

Rise in Wholesale Prices this Year Proportionally Smaller than in 2019, Despite Record Sales

Washington

January 1, 2021 Deadline for Product Labels to Be Approved Under New Rules Approaching

Massachusetts

Additional Comment Period on Establishment of Adult-Use Delivery Licenses Opened by Officials

Legalization Updates

Arizona, Montana, Mississippi, New Jersey, and South Dakota Voters to Decide on Adult-Use and Medical Cannabis Legalization Initiatives Next Week

 

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

30 October 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

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