December 2, 2022

U.S. Cannabis Spot Index — December 2, 2022

U.S. Cannabis Spot Index — Published December 2, 2022

The U.S. Cannabis Spot Index decreased 4.4% to $955 per pound.

 

The simple average (non-volume weighted) price decreased $4 to $1,304 per pound, with 68% of transactions (one standard deviation) in the $517 to $2,091 per pound range. The average reported deal size was nominally unchanged at 2.6 pounds. In grams, the Spot price was $2.11 and the simple average price was $2.88.

 

The relative frequency of transactions for indoor product rose 1% this week, while those of greenhouse and outdoor flower were unchanged on the week.  

 

 

The relative volume of indoor product fell 2%, while that of greenhouse product rose 2%. Outdoor flower’s relative volume was unchanged on the week.   

 

 

The U.S. Spot market fell $44 per pound this week on net spot market losses of $47 across legacy states as post-harvest trade weighs on the market.

California spot price fell $46 per pound this week, with outdoor product falling $30 per wholesale pound. Looking across California grow types, losses this week were largest on indoor-grown product, which fell $32, while greenhouse product slipped $27. Oregon spot gained $17 and has maintained price over a key threshold since the second week in July, defying the pressures of the post-harvest period. Indeed, Oregon greenhouse product price rose this week, gaining $39 per wholesale pound. While Oregon outdoor spot price is the lowest of the legacy states, price did increase by $4 this week and is holding a bit above historical lows.

The California / Oregon spot spread is at $63, with Oregon spot the lower of the two. Price vigilance in these two markets – and across grow types – is warranted, as they are likely to set base prices for the country due to prolific and consistent production and very high quality.

New Mexico prices have been taken to the woodshed. Spot prices are down over 31% this year, fell over 20% in November and fell $86 this week, reaching an all-time low after the adult use market opened just eight months ago. Production ramped up late last year and early this year as medical growers expanded into the adult use market, followed by smaller outfits eager to get into the new industry. The state is turning out to be a cautionary tale about the vicissitudes of cannabis pricing and, for some, a hard lesson in free enterprise. For more on New Mexico, read the interview in our Premium Weekly Report.

June 2023 Implied Forward initially assessed at $1,025 per pound.


The average reported forward deal size increased to 81 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 45%, 42%, and 13% of forward arrangements, respectively.

 

The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 96 pounds, 72 pounds, and 58 pounds, respectively.

 

 

At $975 per pound, the January 2023 Implied Forward represents a premium of 2.1% relative to the current U.S. Spot Price of $955 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:

New Mexico

Texas is the Customer – Interview

Connecticut

Adult Use Cannabis Sales Delayed until 2023

New York

NY AG responds to Variscite Lawsuit

Rhode Island

Adult Use Sales Begin

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

2 December 2022.  Copyright © 2022 New Leaf Data Services, LLC.  All rights reserved

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

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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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

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

November 4, 2022

U.S. Cannabis Spot Index — November 4, 2022

U.S. Cannabis Spot Index — Published November 4, 2022

The U.S. Cannabis Spot Index increased 5.3% to $1,005 per pound.

 

The simple average (non-volume weighted) price increased $81 to $1,382 per pound, with 68% of transactions (one standard deviation) in the $532 to $2,231 per pound range. The average reported deal size was nominally unchanged at 2.4 pounds. In grams, the Spot price was $2.22 and the simple average price was $3.05.

 

The relative transaction frequency of indoor product rose 1%, while that of deals for greenhouse fell 2% and outdoor flower’s transaction frequency was unchanged. 

 

 

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

 

 

The Cannabis Benchmarks U.S. Spot Index gained $51 this week, climbing up off its all-time low to trade back over the $1,000 per pound level, buoyed by price gains in high-population states and those newer to adult use legalization.

Legacy state net price movement this week was -$53 per pound. Oregon broke its recent uptrend as price skidded lower by $36. Adding to legacy state losses, Washington State spot price fell by $23 per pound as the downtrend strengthens amid harvest season. Colorado sank just $4 to make a new all-time low basis spot as the state is wrapping up the harvest season. California defied the weekly trend, albeit barely, by tacking on $4 this week in the spot market, although it is clear the downtrend is still securely intact.

Michigan spot jumped $68 this week as it bounces back from the all-time low observed in mid-October. The run on Michigan prices has been brutal and the current reprieve is likely a short term phenomenon with the state staring down the barrel of its largest outdoor crop to date.

The Sand States net price movement this week was -$19 per pound. Oklahoma and Arizona prices converged with the price spread now at just $1. Nevada spot price gained $7 per wholesale pound. New Mexico prices remained firm, but Steve Farmer, a cannabis retailer in the state, said they are starting to see a fair amount of price pressure on the wholesale side. “This market went crazy after rec and has dynamic ongoing price swings,” Farmer told Cannabis Benchmarks. He added, “a lot of new producers are showing up, some with promise. I think we’ll outpace Arizona’s efforts at leveling the market – prices are coming down.”

May 2023 Implied Forward assessed at $1,000 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%, 41%, and 13% of forward arrangements, respectively.

 

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

 

 

At $960 per pound, the December 2022 Implied Forward represents a discount of 4.5% relative to the current U.S. Spot Price of $954 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

October Harvest Falls 25.9% YoY, First Drop in 6 Years

New York

OCM Publishes Adult Use Retail Rules

New Jersey

CRC Issues Annual Licenses, Warns Curaleaf

National

Schumer Raises Banking Bill Hopes

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

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

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