May 7, 2021

U.S. Cannabis Spot Index — May 7, 2021

U.S. Cannabis Spot Index — Published May 7, 2021

U.S. Cannabis Spot Index up 0.7% to $1,565 per pound.

 

The simple average (non-volume weighted) price decreased $9 to $1,762 per pound, with 68% of transactions (one standard deviation) in the $1,008 to $2,515 per pound range. The average reported deal size was nominally unchanged at 2.2 pounds. In grams, the Spot price was $3.45 and the simple average price was $3.88.

 

The relative frequencies of trades for each grow type were largely stable from last week.  

 

 

The relative volumes of greenhouse and outdoor flower both expanded by less than 1% each this week, with that for warehouse product contracting correspondingly.

As we noted last week, the U.S. Spot Index last month broke with behavior observed in prior years, as April’s monthly average composite price rose from March. New data out of several states this week shows that demand continued to be robust in April and outpaced March’s monthly sales in the states under discussion. While the 4/20 holiday falls in April, historical data shows total sales for the month frequently come in lower than March’s. 

 

However, the trend of a downturn in monthly sales in April was bucked in Oregon, as well as in the younger markets of Massachusetts and Illinois, which continue to see demand expand and reach new records nearly every month. Wholesale flower prices in Oregon and Massachusetts were also on the rise in April, after they leveled off or declined late in 2020 and early this year. 

 

 

Some U.S. and state officials are postulating that daily life may return to normalcy in the coming months as rates of vaccination against COVID-19 increase. How that might impact legal cannabis demand is somewhat uncertain. More options for consumers to spend their disposable income as states across the country move to lift restrictions suggests that spending on cannabis could be squeezed. However, the persistence of robust monthly sales figures posted out of states with diverse market conditions has so far refuted that notion. Similarly, very high unemployment and income uncertainty for millions of Americans last year did not dent booming demand for legal cannabis, which appears as if it could be part of the new post-COVID “normal.”

November 2021 Implied Forward initially assessed at $1,625 per pound.

 

The average reported forward deal size was 51.6 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 64 pounds, 40 pounds, and 27 pounds, respectively.

 

At $1,585 per pound, the June Implied Forward represents a premium of 1.3% relative to the current U.S. Spot Price of $1,565 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

Sales Reach Another Record High in April, but Annual Growth Rates Have Slowed Compared to 2020

Massachusetts

Adult-Use Sales Reach New Peak in April, Clearing $100M for the Second Straight Month

Illinois

Total Adult-Use & Medical Sales Climb to Over $150M in April

Nevada

February Demand Contracts Month-Over-Month, Even As Las Vegas Tourism Increased Notably

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

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

April 30, 2021

U.S. Cannabis Spot Index — April 30, 2021

U.S. Cannabis Spot Index — Published April 30, 2021

U.S. Cannabis Spot Index up 2.5% to $1,554 per pound.

 

The simple average (non-volume weighted) price decreased $1 to $1,770 per pound, with 68% of transactions (one standard deviation) in the $1,011 to $2,530 per pound range. The average reported deal size was 2.2 pounds. In grams, the Spot price was $3.43 and the simple average price was $3.90.

 

The relative frequency of trades for indoor flower decreased by 1% this week. The relative frequency of transactions for outdoor product increased by the same proportion, while that for greenhouse flower was unchanged.  

 

 

The relative volumes of greenhouse and outdoor flower both contracted marginally this week, with that for warehouse product expanding slightly.

The U.S. Spot Index rose to a year-to-date peak this week to touch its highest point since late November 2020, when a fall harvest-related decline in national wholesale flower prices commenced. Additionally, after the monthly average U.S. composite price was largely stable from February to March, April saw the U.S. Spot average $1,527 per pound, an increase of 1.3% from the previous month. 

 

The gradual upward trend in wholesale flower prices to begin Q2 2021 contrasts with behavior observed last year, when the U.S. Spot slid downward from mid-February through late May. At that time, the COVID-19 pandemic was just arriving and beginning to take hold in America, and market participants faced significant uncertainty as to how consumer demand for cannabis would respond. 

 

 

Now, however, legal cannabis businesses have experienced roughly a year of elevated demand, while historical trends indicate that sales will continue to increase in the coming months. Newer markets in higher-population states continue to expand as well. Meanwhile, the first full month of adult-use sales in Arizona saw the state’s licensed businesses post impressive total revenue figures, but also suggested significant room for growth in the new recreational sector.

May 2021 Implied Forward closes at $1,550 per pound.

 

The average reported forward deal size was 51 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 63 pounds, 41 pounds, and 27 pounds, respectively.

 

At $1,550 per pound, the May Implied Forward represents a discount of 0.2% relative to the current U.S. Spot Price of $1,554 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

Combined Adult-Use and Medical Cannabis Sales Reach Over $93.5 Million in February; Medical Revenues Still Significantly Higher in First Full Month of Recreational Sales

Oklahoma

February Medical Cannabis Sales Rise to Almost $85 Million, Up 9% from January

Michigan

Licensing Adult-Use Businesses in Detroit Delayed Until at Least Late May by Litigation; City Officials May Scrap Licensing Ordinance Altogether if Social Equity Program Struck Down by Court

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

30 April 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

April 23, 2021

U.S. Cannabis Spot Index — April 23, 2021

U.S. Cannabis Spot Index — Published April 23, 2021

U.S. Cannabis Spot Index down 0.8% to $1,516 per pound.

 

The simple average (non-volume weighted) price increased $2 to $1,771 per pound, with 68% of transactions (one standard deviation) in the $1,005 to $2,538 per pound range. The average reported deal size was 2.3 pounds. In grams, the Spot price was $3.34 and the simple average price was $3.90.

 

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

 

 

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

New data this week out of Michigan shows that the state’s young adult-use market saw a sales boom in March. Combined with revenue generated by medical cannabis dispensaries, total legal cannabis sales in Michigan reached over $145 million. Notably, Michigan’s March sales outpaced by a significant measure the over $109 million in revenue racked up by licensed retailers in Oregon in the same month, despite Michigan’s adult-use market being open for fewer than 18 months, making it roughly three years younger than Oregon’s. 

 

As we have noted in our reports throughout this month, the younger markets of Massachusetts, Illinois, and Michigan are now seeing sales comparable to or in excess of those out of more mature, but less-populated Western states, such as Oregon and Nevada. Despite rapidly-climbing sales, however, the state Spot Indices of Illinois and Michigan have both trended downward so far this year, indicating that production capacity in each state continues to ramp up and is better meeting demand compared to a year ago. 

 

 

The U.S. Spot has exhibited modest gains this month on the back of rising supply side rates in California and Arizona. Producers in Arizona are still building out additional production capacity after a faster-than-expected start to adult-use sales. California’s composite price has been lifted in part by the robust premium commanded by indoor-grown flower in the state, which is unique amongst other large Western markets.

May 2021 Implied Forward unchanged at $1,550 per pound.

 

The average reported forward deal size was 51 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 63 pounds, 41 pounds, and 27 pounds, respectively.

 

At $1,550 per pound, the May Implied Forward represents a premium of 2.2% relative to the current U.S. Spot Price of $1,516 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

Denver Approves Cannabis Delivery, Lifts Business License Cap for Social Equity Applicants in New Legislation

Michigan

Monthly Adult-Use and Medical Cannabis Sales Spike 38% in March to Total Over $145 Million

Arizona

Newly Awarded Adult-Use Licenses Will Bring Storefronts to Rural Areas and Increase Statewide Production Capacity

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

23 April 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

April 16, 2021

U.S. Cannabis Spot Index — April 16, 2021

U.S. Cannabis Spot Index — Published April 16, 2021

U.S. Cannabis Spot Index up 0.5% to $1,529 per pound.

 

The simple average (non-volume weighted) price increased $1 to $1,769 per pound, with 68% of transactions (one standard deviation) in the $1,001 to $2,537 per pound range. The average reported deal size was 2.2 pounds. In grams, the Spot price was $3.37 and the simple average price was $3.90.

 

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

 

 

The relative volume of indoor flower expanded by 1% this week. The relative volume of greenhouse product contracted by the same proportion, while that for outdoor flower was stable.

While the U.S. Spot Index has been relatively stable to this point in 2021, there has been an overall upward trend, albeit a modest one, since late January. Month-to-date, the national composite price is averaging $1,521 per pound for April, up from $1,508 per pound last month. In 2020, the U.S. Spot trended downward from late February through late May, before robust demand during the pandemic began to pressure supplies and push prices upward. 

 

As we pointed out last week in regard to several significant state markets, demand remains strong this year. However, new February sales data out of Colorado shows that year-over-year growth in retail revenue slowed compared to the prior month. In last week’s report, we pointed out a similar observation in regard to Oregon’s sales; namely, that although annual growth rates remain impressive – in excess of 20% for both of the markets under discussion for the most recent month that sales data are available – they represent slowdowns compared to the booming annual growth rates documented in 2020. 

 

 

The slowdown in sales growth in more mature markets has been accompanied by a documented increase in production in Oregon. While such data is not yet available for Colorado, previous information from the state has shown that licensed producers there are not close to utilizing their allowed production capacity fully, providing for the possibility of increased cultivation to meet the expanded demand that has manifested over the past year. Production is also ramping up in newer markets, which is likely contributing to the stability of the U.S. Spot this year. 

May 2021 Implied Forward unchanged at $1,550 per pound.

 

The average reported forward deal size was 51.4 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 54%, 34%, and 12% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 64 pounds, 41 pounds, and 26 pounds, respectively.

 

At $1,550 per pound, the May Implied Forward represents a premium of 1.4% relative to the current U.S. Spot Price of $1,529 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

Total Sales Exceed $167M in February, Up 21% YoY

Washington

Bill to Exempt Medical Cannabis Patients from 37% Retail Excise Tax Fails to Pass into Law

Michigan

Federal Judge Orders Detroit to Cease Adult-Use Cannabis Business Licensing Due to Lawsuit Over City’s Equity Program

Arizona

March Medical Cannabis Sales Volume Down YoY for Second Straight Month After Opening of Recreational Sales

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

16 April 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

April 9, 2021

U.S. Cannabis Spot Index — April 9, 2021

U.S. Cannabis Spot Index — Published April 9, 2021

U.S. Cannabis Spot Index up 0.6% to $1,522 per pound.

 

The simple average (non-volume weighted) price increased $7 to $1,768 per pound, with 68% of transactions (one standard deviation) in the $986 to $2,550 per pound range. The average reported deal size was 2.3 pounds. In grams, the Spot price was $3.35 and the simple average price was $3.90.

 

The relative frequency of trades for indoor flower increased by 1%. The relative frequency of deals for outdoor product decreased by the same proportion, while that for greenhouse flower was unchanged.  

 

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

 

Based on new sales data out of several states – both those with established and newer markets – the March sales spike that has come to be expected based on observations from prior years manifested again in 2021. Oregon, Illinois, and Massachusetts all saw new record monthly retail revenue figures established last month. 

 

Notably, adult-use sales alone out of the latter two states are now comparable to those generated by Oregon’s licensed system, which also serves registered patients. Total retail sales in Illinois were about $35 million more than those documented in Oregon in March, which marked just the fifteenth month that Illinois’ legal adult-use market has been up and running, compared to Oregon’s four-and-a-half year old licensed system. The rapid growth in sales in Illinois presages the additional demand that will be captured by legal cannabis markets in other high-population states such as New Jersey and New York when those markets open for business. 

 

 

At the moment, robust demand in state-legal cannabis markets has not resulted in rising wholesale prices. However, this follows the observed behavior of the U.S. Spot in 2020, which declined by 3% from February to March, then decreased another 1% from March to April, even while sales began to boom unexpectedly as the COVID-19 pandemic took hold of the country. This year’s decline in the monthly average national composite price from February to March was much smaller, at 0.3%. Meanwhile, March 2021’s mean U.S. Spot price of $1,508 per pound is up by 9.2% year-over-year, from $1,381 in March 2020. 

May 2021 Implied Forward unchanged at $1,550 per pound.

 

The average reported forward deal size was 47 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 54%, 34%, and 12% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 59 pounds, 35 pounds, and 25 pounds, respectively.

 

At $1,550 per pound, the May Implied Forward represents a premium of 1.9% relative to the current U.S. Spot Price of $1,522 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

March Sales Jump 23% to Exceed $109M, a New Record

Massachusetts

Adult-Use Sales Top $100M for the First Time Ever in March

Illinois

Combined Medical and Adult-Use Revenues Approach $145M in March, Establishing a New Record High

Maine

March Adult-Use Sales Grow by 47% MoM, But Remain Modest at $3.7M

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

9 April 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved

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