February 21, 2020

U.S. Cannabis Spot Index — February 21, 2020

U.S. Cannabis Spot Index — Published February 21, 2020

U.S. Cannabis Spot Index down 2.6% to $1,421 per pound.

 

The simple average (non-volume weighted) price decreased $2 to $1,685 per pound, with 68% of transactions (one standard deviation) in the $929 to $2,442 per pound range. The average reported deal size increased to 2.3 pounds. In grams, the Spot price was $3.13 and the simple average price was $3.72.

 

The relative frequency of trades for indoor flower increased by 3% this week. The relative frequencies of deals for greenhouse and outdoor product decreased by 1% and 2%, respectively. 

 

 

Greenhouse product’s share of the total reported weight moved nationally contracted by 4% this week. The relative volumes of warehouse and outdoor flower expanded by 3% and 1%, respectively.

The U.S. Spot Index declined by 2.6% this week to settle at $1,421 per pound. The trend lines of the Spot Indices of each of the country’s four largest markets are all on the downswing for the first time since early 2019. In the West Coast states, the overall declines in wholesale flower pricing are due primarily to falling rates for outdoor product. Such flower saw both its national relative volume and average deal size grow this week, indicating that additional amounts of last year’s autumn crop are coming to market.

 

We have pointed out in prior reports that historical sales data shows the first two months of any given year are generally a period of lower demand relative to March, when sales have been observed to spike in numerous adult-use markets, as well as medical ones in some cases. Retailers preparing for increased sales in the coming spring season may be bringing in lower-priced outdoor flower as inventory in order to help boost margins. Wholesale prices for such product indicate that supply is ample; this week’s volume-weighted rate for outdoor flower is off by 20.3% from the opening week of this year. 

 

 

In addition to falling prices in the four largest markets, the states with the newest adult-use systems – Massachusetts, Michigan, and Illinois – have also seen wholesale flower rates subside in recent weeks. Prior to that, climbing prices in those states provided some upward pressure on the U.S. Spot.

March Forward unchanged at $1,475 per pound.

 

The average reported forward deal size was 41 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 49%, 34%, and 17% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 46 pounds, 34 pounds, and 39 pounds, respectively.

 

At $1,475 per pound, the March Forward represents a premium of 3.8% relative to the current U.S. Spot Price of $1,421 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

Revised Definition of “Wholesale Cost” Could Lower Tax Burdens of Retailers in Some Cases

Colorado

Flower Production Up, but Demand Down YoY in H1 2019; Consumers Turned Increasingly to Concentrates and Edibles in First Half of Last Year

 

Oregon

Retail Sales Down Slightly in January, but Largely Stable at About $67.5 Million, as Monthly Harvest Volume Up Around 20% YoY   

       

Michigan

Medical Cannabis Sales Rise 1.4% in January to $25.2 Million; Adult-Use Retail Revenue Up 41% MoM to $9.8 Million

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

21 February 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

February 14, 2020

U.S. Cannabis Spot Index — February 14, 2020

U.S. Cannabis Spot Index — Published February 14, 2020

U.S. Cannabis Spot Index up 0.1% to $1,459 per pound.

 

The simple average (non-volume weighted) price increased $50 to $1,687 per pound, with 68% of transactions (one standard deviation) in the $929 to $2,445 per pound range. The average reported deal size increased to 2.0 pounds. In grams, the Spot price was $3.22 and the simple average price was $3.72.

 

The relative frequency of trades for greenhouse flower increased by 2% this week. The relative frequency of deals for outdoor product decreased by the same proportion, while that for transactions for indoor flower was unchanged. 

 

Warehouse product’s share of the total reported weight moved nationally contracted by 2% this week. The relative volume of greenhouse flower expanded by the same proportion, while that for outdoor product was unchanged.

The U.S. Spot Index rose by 0.1% this week to settle at $1,459 per pound. This week’s small increase in the national composite rate is due to an uptick in the U.S. price for indoor flower. Meanwhile, prices for outdoor flower have been trending downward to open this year. A similar trend was observed through the first quarter of 2019, after which rates for outdoor product began to rise in April, along with the U.S. Spot Index. This year, strong prices for warehouse flower have buoyed the national composite rate so far in Q1; if prices for outdoor product turn upward in the spring and summer, as they did last year, then the U.S. Spot appears poised to climb into territory not observed last year, as this week’s price is already just $5 off of 2019’s peak.

 

New data out of Colorado and Oregon shows that sales in December 2019 did not experience the uptick that has been observed in that month in previous years. However, year-over-year sales growth in both markets was strong in 2019. Colorado saw demand – measured in terms of total retail sales revenue – increase by about 13% from 2018 to 2019, after sales stagnated somewhat in the former year. Oregon’s market saw about a 22% year-over-year rise in sales in 2019, comparable to the rate of expansion documented in 2018. Those trends helped boost wholesale prices in both markets last year, with rates in both states holding relatively steady to begin 2020. Colorado and Oregon are the second and fourth largest legal cannabis markets in the country, respectively, in terms of retail revenue.

March Forward unchanged at $1,475 per pound.

 

The average reported forward deal size was 42 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 47%, 36%, and 17% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 46 pounds, 32 pounds, and 46 pounds, respectively.

 

 

At $1,475 per pound, the March Forward represents a premium of 1.1% relative to the current U.S. Spot Price of $1,459 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 Retail Sales Reach Nearly $1.75 Billion in 2019, Up 13% YoY

Oregon

Retailers Tallied About $792 Million in Sales in 2019, Including Almost 220,000 Pounds of Flower Sold to Consumers and Patients

Washington

Bill Would Allow Producers & Processors to Provide Discounts to Retailers in Wholesale Transactions             

 

Nevada

November 2019 Retail Sales Approach $61 Million, Down Almost 3% From October

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

14 February 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

February 7, 2020

U.S. Cannabis Spot Index — February 7, 2020

U.S. Cannabis Spot Index — Published February 7, 2020

U.S. Cannabis Spot Index up 1.1% to $1,457 per pound.

 

The simple average (non-volume weighted) price increased $5 to $1,637 per pound, with 68% of transactions (one standard deviation) in the $905 to $2,370 per pound range. The average reported deal size decreased to 1.9 pounds. In grams, the Spot price was $3.21 and the simple average price was $3.61.

 

The relative frequency of trades for indoor flower increased by 8% this week. The relative frequency of deals for greenhouse and outdoor product both decreased, by 6% and 2%, respectively. 

 

Warehouse product’s share of the total reported weight moved nationally expanded by 6% this week. The relative volumes of greenhouse and outdoor flower each contracted by 3%.

The U.S. Spot Index rose by 1.1% this week to settle at $1,457 per pound. The national composite price has trended upward to start 2020, with this week’s rate representing an increase of 4.3% from the start of the year. This week’s U.S. Spot is also just $7 below 2019’s annual peak, which was documented in the week ending November 15. 

 

Overall wholesale flower prices in three of the country’s four largest markets – California, Colorado, and Oregon – have been fairly stable in recent weeks. Upward pressure on the national composite rate has come from Washington State and Nevada, as well as the newer adult-use systems in Massachusetts, Michigan, and Illinois. The opening of those states’ markets to general consumers has also pushed up prices for flower designated as medical, particularly in Illinois this week.

  

 

Looking ahead a few weeks, historical sales data out of established markets has shown that March is typically the month that sees the strongest demand in Q1, and sometimes for the first half of a year. Retailers in the major markets may look to bring in additional inventory in the coming weeks, which could result in upward pressure on wholesale prices in states where they have been fairly steady.

August Forward initially assessed at $1,455 per pound.

 

The average reported forward deal size was 42 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 47%, 36%, and 17% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 48 pounds, 32 pounds, and 41 pounds, respectively.

 

At $1,475 per pound, the March Forward represents a premium of 1.2% relative to the current U.S. Spot Price of $1,457 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

Proportion of Total Product Batches Tested Constituted by Vapes & Extracts Reached Almost 39% in Q4 2019, Up from 31% in Q3 2018

Oregon

Official Data Shows About 30% of Flower and Trim is Going to Waste

Michigan

Adult-Use Sales Increased Significantly in January, Indicating Loosening Supply and More Retail Outlets Opening

 

Illinois

January Adult-Use Sales Top $39 Million as Wholesale Prices Climb; Rates for Medical Flower More Expensive than Adult-Use by About $340 Per Pound

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

7 February 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

January 31, 2020

U.S. Cannabis Spot Index — January 31, 2020

U.S. Cannabis Spot Index — Published January 31, 2020

U.S. Cannabis Spot Index down 0.1% to $1,441 per pound.

 

The simple average (non-volume weighted) price increased $9 to $1,632 per pound, with 68% of transactions (one standard deviation) in the $895 to $2,370 per pound range. The average reported deal size increased to 2.0 pounds. In grams, the Spot price was $3.18 and the simple average price was $3.60.

 

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

 

Warehouse product’s share of the total reported weight moved nationally expanded by almost 2% this week. The relative volumes of greenhouse and outdoor flower each contracted by about 1%.

The U.S. Spot Index declined by 0.1% this week to settle at $1,442 per pound. For January as a whole, the national composite price averaged $1,415 per pound, down by 1.3% from December 2019’s mean going rate of $1,434 per pound. The transition to a new year has seen varied price movement from 2017-2018 to the current moment. From December 2017 to January 2018, the monthly average U.S. Spot price fell by 5.2%, from $1,417 to $1,343 per pound. From December 2018 to January 2019, it rose by 1.8%, from $1,136 to $1,157 per pound.

 

This year, the overall downturn in the national composite price has been driven by declining rates in California and Colorado. While both markets saw significant demand growth in 2019, January and February of any given year are typically periods of relatively depressed sales compared to December and March. 

 

Meanwhile, high prices continue to be observed in the new recreational markets of Michigan and Illinois. The number of pounds of flower traded wholesale in each of those markets in 2019 amounted to about 8% and 5%, respectively, of our preliminary estimates of the amounts of product moved in either California or Colorado. Consequently, the elevated prices being reported currently out of new recreational markets are not exercising significant influence on the U.S. Spot at this time, due to the relatively small amount of trading taking place.

February Forward closes unchanged at $1,450 per pound.

 

The average reported forward deal size was 43 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 46%, 38%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 50 pounds, 32 pounds, and 44 pounds, respectively.

 

At $1,450 per pound, the February Forward represents a premium of 0.6% relative to the current U.S. Spot Price of $1,441 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

Initial Estimate of Size of California’s Wholesale Flower Market for 2019 Indicates 25% Growth in Volume of Product Traded, Almost 30% Increase in Value

Washington

Regulators Publish Proposed Rules to Require Testing for Pesticides and Heavy Metals, Plus Estimates of Costs to Businesses

Michigan

Cannabis Benchmarks Estimates that Michigan’s Legal Cannabis Market Declined in Size and Value for Second Straight Year in 2019

 

Illinois

Size of Wholesale Flower Market Doubled  in 2019 Compared to Previous Year, But Production Must Expand Dramatically to Meet Adult-Use Demand

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

31 January 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

January 17, 2020

U.S. Cannabis Spot Index — January 24, 2020

U.S. Cannabis Spot Index — Published January 24, 2020

U.S. Cannabis Spot Index up 3.0% to $1,443 per pound.

 

The simple average (non-volume weighted) price increased $44 to $1,623 per pound, with 68% of transactions (one standard deviation) in the $898 to $2,348 per pound range. The average reported deal size declined to 1.9 pounds. In grams, the Spot price was $3.18 and the simple average price was $3.58.

 

The relative frequency of trades for indoor flower decreased by almost 3% this week. The relative frequencies of deals for greenhouse and outdoor product increased by about 2% and 1%, respectively.

 

Outdoor flower’s share of the total reported weight moved nationally contracted by 3% this week. The relative volumes of warehouse and greenhouse product expanded by 1% and 2%, respectively.

The U.S. Spot Index rose by 3% this week to settle at $1,443 per pound. Yet the current overall trend of the national composite price remains a fairly modest downward slide, driven primarily by such price movement in California and Colorado, the country’s two largest markets. Additionally, while still holding stable overall, the trend line of Oregon’s Spot exhibited a slight decline this week.

 

On the West Coast, indoor growers are currently enjoying elevated rates for their produce. Prices for warehouse-grown flower in California, Oregon, and Washington State all rose this week and settled above their 2019 peaks. In the Pacific Northwest states, rates for outdoor product documented so far this month are elevated compared to those observed in December, while prices for such flower in California have declined in the opening weeks of 2020.

 

 

The new adult-use markets of Illinois and Michigan continue to experience tight supply and high wholesale flower prices. However, Massachusetts’ Spot Index this week vaulted above its 2019 peak and is the highest in the country by a significant measure. This week’s Massachusetts Spot is up 19% year-over-year. Last year at this time, the state’s adult-use market was just two months old and consisted of only a handful of retailers. Now, with over 30 shops authorized to sell to general consumers, it seems demand has grown and is putting pressure on cultivators to keep up. Similar scenarios could play out in Illinois and Michigan; wholesale price peaks may be some months down the road if retail access and demand growth continues to outpace supply.

Prices for both adult-use and medical flower climbed in all three of the states with the newest recreational markets.

 

  • Illinois 

    • Adult-use: $3,041 per pound, up 0.4% from last week.

    • Medical: $3,096 per pound, up 7.2% from last week.  

  • Massachusetts

    • Adult-use: $3,538 per pound, up 5.2% from last week.

    • Medical: $3,418, up 0.9% from last week.  

  • Michigan 

    • Adult-use: $3,490 per pound, up 0.4% from last week. 

    • Medical: $2,553, up 1.9% from last week. 

     

February Forward unchanged at $1,450 per pound.

 

The average reported forward deal size was 42 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 47%, 39%, and 14% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 49 pounds, 32 pounds, and 41 pounds, respectively.

 

At $1,450 per pound, the February Forward represents a premium of 0.5% relative to the current U.S. Spot Price of $1,443 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

Wholesale Flower Designated as Adult-Use Commanded Premium of Almost 25% Over Medical Product in 2019

 

Oregon

Retail Sales Grew 23% YoY in 2019; Market Trends Suggest Even Larger Revenue Expansion Possible in 2020

 

Washington

Monthly Sales Stabilized in Second Half of 2019 at Just Under $100 Million, as YTD Total through November Tops $1 Billion

 

Massachusetts

State Spot Index Surpasses $3,475 Per Pound, Higher Than Newer Recreational Markets in Illinois and Michigan

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

24 January 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

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