January 10, 2020

U.S. Cannabis Spot Index — January 10, 2020

U.S. Cannabis Spot Index — Published January 10, 2020

U.S. Cannabis Spot Index down 0.4% to $1,391 per pound.

 

The simple average (non-volume weighted) price decreased $30 to $1,576 per pound, with 68% of transactions (one standard deviation) in the $929 to $2,224 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.07 and the simple average price was $3.48.

 

The chart below shows the course of the Cannabis Benchmarks® U.S. Spot Index from its inception in April 2015 through the end of 2019.

The U.S. Spot Index declined by 0.4% this week to settle at $1,391 per pound. The significant Q4 price decline typically observed in prior years did not come to fruition in 2019. However, since around mid-November the national composite price has displayed a modest downward trend. Wholesale prices also trended downward a bit from the final week of 2018 through the end of January 2019, a period in which they declined by by 1.5%, from $1,175 to $1,157 per pound. Product from a prior year’s fall harvest continuing to come to market, along with generally depressed sales in the wake of the end-of-year holiday season, traditionally apply downward pressure to wholesale cannabis prices to open any given year. Based on early data from the opening weeks of 2020, it appears that such trends are holding in California, Colorado, and Oregon. 

 

As we noted last week, though, the new and expanding adult-use markets of Massachusetts, Michigan, and Illinois will influence national wholesale rates in a manner that they have not in prior years. Still, at the moment those markets are relatively small in terms of the volume of product being moved, despite posting some impressive gross sales figures. For example, Massachusetts adult-use retailers racked up over $445 million in sales in 2019, almost a third of Colorado’s combined adult-use and medical retail revenue in 2018. However, Massachusetts growers harvested less than a tenth of the number of plants in 2019 that Colorado cultivators did in 2018, emphasizing the significantly higher prices in the East Coast’s only regulated adult-use market.

Upward pressure on the national price for recreational product came from the new markets of Michigan and Illinois, where adult-use flower prices were assessed at $3,499 and $3,036 per pound, respectively. Additionally, the rate for adult-use product in Massachusetts was observed to settle at $3,355 per pound this week. However, downturns in the recreational sectors of the markets of California and Colorado, as well as in Oregon, outweighed the higher prices in the newer, smaller markets and resulted in the small decrease in the national rate.

February Forward unchanged at $1,450 per pound.

 

The average reported forward deal size was 47.5 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 46%, 36%, and 18% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 50 pounds, 42 pounds, and 50 pounds, respectively.

 

At $1,450 per pound, the February Forward represents a premium of 3.8% relative to the current U.S. Spot Price of $1,391 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

Volume-Weighted Price for Indoor Flower Jumps Over $2,000 Per Pound for First Time in Over Three Years

 

Oregon

State Spot Index Has Stabilized from November 2019 to Present After Significant Volatility Earlier in 2019

 

Nevada

Total Sales in October 2019 Reached Over $62.5 Million, Just Short of Record Set in August 2019

 

Michigan

State Spot Index Jumps to Over $2,500 Per Pound for First Time in Over Three Years

 

Massachusetts

Adult-Use Retailers Realized Over $445 Million in Gross Sales in 2019, Despite Small Number of Storefronts Licensed

 

Illinois

State Spot Index Climbs Almost $200 in Two Weeks as Retailers Rang Up Over $10 Million in Sales in First Five Days of Adult-Use Legalization

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

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

January 3, 2020

U.S. Cannabis Spot Index — January 3, 2020

U.S. Cannabis Spot Index — Published January 3, 2020

U.S. Cannabis Spot Index down 1.0% to $1,397 per pound.

 

The simple average (non-volume weighted) price decreased $12 to $1,607 per pound, with 68% of transactions (one standard deviation) in the $963 to $2,251 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.08 and the simple average price was $3.54.

 

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

 

 

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

The U.S. Spot Index declined by 1% this week to open 2020 at $1,397 per pound. Although down marginally week-on-week, this week’s national composite price is up by about 20% compared to a year ago. 

 

In 2019, the U.S. Spot was generally on the downswing in the opening quarter of the year, sliding to reach its annual low in the first week of April. However, several factors not present in 2019 will likely apply upward pressure to wholesale prices in Q1 2020. The opening of adult-use sales in Illinois, as well as the continued expansion of that sector of the market in Michigan, has generated significant new demand not present a year ago, while cultivators in both states still need time to ramp up production to full capacity. Additionally, wholesale prices in Washington State have continued to climb to begin 2020 with reports that 2019’s harvest was smaller than in prior years. 

 

Other sources of upward price pressure observed last year may subside in 2020. Whether the significant growth in sales documented in California, Colorado, and Oregon in 2019 will continue into this year is an open question. Furthermore, 2019’s autumn crops could drive down prices in the two aforementioned West Coast markets through at least the opening quarter of this year, as they did last year.

The national volume-weighted price for flower to be sold to general consumers increased this week. Rises in Oregon, Washington, and Nevada – as well as the addition of an average price of $3,057 per pound for adult-use product in Illinois – outweighed small decreases in California and Colorado’s recreational sectors. The national price for medical flower dropped this week on decreases in that section of the market in California, Colorado, and Illinois, in addition to falling rates in the medical-only systems of Arizona, Connecticut, Maine, and Washington, D.C.

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

 

The average reported forward deal size was nominally unchanged at 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 46%, 36%, and 18% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were nominally unchanged at 50 pounds, 43 pounds, and 50 pounds, respectively.

 

At $1,450 per pound, the February Forward represents a premium of 3.8% relative to the current U.S. Spot Price of $1,397 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

Flower and Trim Harvested On or After January 1st Now Subject to Required Testing for Heavy Metals

 

Oregon

State Spot Index Up About 90% Compared to Opening Week of 2019

 

Michigan

Medical Cannabis Sales Up Over 30% in Q3 2019, But Declines in Flower Sales Volume in August & September Indicate Tight Supply

 

Illinois

Retail Revenue on First Day of Adult-Use Sales Equivalent to 12% of All Medical Cannabis Sales Made in November

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

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

December 27, 2019

U.S. Cannabis Spot Index — December 27, 2019

U.S. Cannabis Spot Index — Published December 27, 2019

U.S. Cannabis Spot Index down 1.8% to $1,411 per pound.

 

The simple average (non-volume weighted) price decreased $26 to $1,619 per pound, with 68% of transactions (one standard deviation) in the $969 to $2,269 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.11 and the simple average price was $3.57.

 

The relative frequency of trades for outdoor flower increased by1% this week. The relative frequency of deals for greenhouse product decreased by the same proportion, while that for transactions involving indoor flower was unchanged. 

 

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

The U.S. Spot Index declined by 1.8% this week to close 2019 at $1,411 per pound. Much of this year was marked in general by an upward trend in the national composite price. However, the U.S. Spot opened the year at $1,165 per pound and slid to its annual low of $1,066 per pound in the first week of April, after what available data shows was a strong 2018 outdoor harvest on the West Coast. 

 

However, record-setting demand in the country’s major adult-use markets this year, combined with reports that Oregon’s 2018 crop was of lower quality, pushed the U.S. Spot upward through the spring, summer, and into the autumn, when it peaked at $1,464 per pound in mid-November, the latest that such a milestone has been observed in the history of Cannabis Benchmarks price assessments, which began in 2015.   

 

Positive momentum in wholesale prices was moderated and reversed to close the year as the autumn harvest reached market, though the scope and quality of this year’s crop has yet to become fully apparent. Also notable in 2019 was the fracas around vaping-related illnesses and deaths, which resulted in regulatory action in several states to ban some or all vape cartridges. However, the official responses to the vape crisis did not appear to result in significant shifts in demand for flower, and in some cases sales of available extracted products actually increased in the face of partial bans.

The national volume-weighted price for flower to be sold to general consumers declined this week. Decreases in the adult-use sectors of California, Colorado, and Massachusetts, as well as in Alaska, outweighed increases in Oregon, Washington, and Nevada. The national price for medical flower also slid this week on decreases in that section of the market in California, Colorado, and Massachusetts, in addition to falling rates in the medical-only systems of Arizona, Illinois, Maine, and New Mexico, among others.

January 2020 Forward closes down $25 at $1,450 per pound.

 

The average reported forward deal size was nominally unchanged at 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 46%, 36%, and 18% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 50 pounds, 43 pounds, and 50 pounds, respectively.

 

At $1,450 per pound, the January 2020 Forward represents a premium of 2.7% relative to the current U.S. Spot Price of $1,411 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

Legislative Analyst’s Office Recommends Eliminating Cultivation Tax, But Bill to that Effect Did Not Advance Earlier this Year

 

Colorado

Denver Minimum Wage Increase May Result in Small Increase in Labor Costs for Some Businesses in 2020

 

Washington

Officials Begin Rulemaking to Allow Smallest Producers to Expand Production Capacity

 

Arizona

November Sales Volume Again Sets New Record, Up by 33% YoY

 

Massachusetts

Adult-Use Sales Reach Almost $46 Million in November, a Record High for the Young Recreational Market

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

27 December 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

December 20, 2019

U.S. Cannabis Spot Index — December 20, 2019

U.S. Cannabis Spot Index — Published December 20, 2019

U.S. Cannabis Spot Index down 0.3% to $1,437 per pound.

 

The simple average (non-volume weighted) price decreased $14 to $1,645 per pound, with 68% of transactions (one standard deviation) in the $972 to $2,318 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.17 and the simple average price was $3.63.

 

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

 

Outdoor flower’s share of the total reported weight moved nationally contracted by 5% this week. The relative volumes of warehouse and greenhouse product expanded by 3% and 2%, respectively.

The U.S. Spot Index declined by 0.3% this week to settle at $1,437 per pound. The current month-to-date average price for December is down slightly compared to November’s mean U.S. composite rate. 

 

At this point, this observation bucks trends from the prior two years. In 2017, the monthly average U.S. Spot price rose by 0.4% from November to December, from $1,412 to $1,417 per pound. In 2018, the monthly average national composite rate rose by 5.7% in the same span, from $1,075 to $1,136 per pound. 

 

Next week’s U.S. Spot price would have to settle at above $1,483 per pound to exceed November’s average, which would constitute a week-over-week increase of at least 3.2%. This seems unlikely given recent trends. Upward price movement observed earlier this year in California, Colorado, and Oregon has leveled off and, in the case of the latter market, reversed recently. 

 

Meanwhile, although the opening of the adult-use market in Michigan and a reportedly smaller fall harvest in Washington this year is pushing up rates in those states, the sizeable markets of Nevada and Arizona are balancing that upward pressure on the U.S. Spot with downward-trending composite prices.

The national volume-weighted price for flower to be sold to general consumers was flat for the second straight week. Increases in California, Washington, and Massachusetts were counterbalanced by declines in Colorado, Oregon, and Nevada. 

 

The national price for medical flower declined this week on decreases in that section of the market in California and Colorado, in addition to falling rates in the medical-only systems of Illinois, Maine, and New Hampshire. 

January 2020 Forward unchanged at $1,475 per pound.

 

The average reported forward deal size was 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 46%, 36%, and 18% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 50 pounds, 43 pounds, and 50 pounds, respectively.

 

At $1,475 per pound, the January 2020 Forward represents a premium of 2.7% relative to the current U.S. Spot Price of $1,437 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

Average Number of Product Batches Subject to Required Testing Monthly from September to December Up About 30% Compared to Prior Three-Month Period, While Failure Rates Are Down

 

Colorado

Increases in Average Market Rates Set by Revenue Department Mean Adult-Use Cultivators Will See Larger Tax Burden on Internal Transfers in Q1

 

Oregon

Total Sales Decline in November for 3rd Straight Month, to About $67.5 Million, But Sales of Extracts & Concentrates Increase for 2nd Consecutive Month

 

Washington

State Lawmakers Acknowledge Product Shortages May Occur With Opening of Adult-Use Market in 2020

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

20 December 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

December 13, 2019

U.S. Cannabis Spot Index — December 13, 2019

U.S. Cannabis Spot Index — Published December 13, 2019

U.S. Cannabis Spot Index down 0.3% to $1,442 per pound.

 

The simple average (non-volume weighted) price decreased $12 to $1,659 per pound, with 68% of transactions (one standard deviation) in the $988 to $2,329 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.18 and the simple average price was $3.66.

 

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 1% and 2%, respectively. 

 

 

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

The U.S. Spot Index declined by 0.3% this week to settle at $1,442 per pound. The national price for outdoor flower continued its Q4 climb, with this week’s rate up by 39.2% from the price of $842 per pound, documented in the opening week of the quarter. 

 

National rates for the other grow types have also been on the rise in Q4, but not nearly to the same degree. From the beginning of the current period through this week, the U.S. volume-weighted prices for indoor and greenhouse product have climbed by 4.8% and 6.4%, respectively. The U.S. Spot Index has been more stable, with this week’s up by only 1.3% from the first week of Q4. 

 

While the fall harvest has not resulted in the Q4 downturn to which cannabis market observers have become accustomed, the chart above shows that previously persistent positive price trends in California, Colorado, and Washington have flattened in recent weeks, while Oregon’s Trailing 4-Week Average slid downward from late October to late November, then leveled off. 

 

As we expand upon below, new data from Colorado and Nevada shows slumping demand in October and September, respectively. Meanwhile, reports of strong early adult-use sales in Michigan must be couched in the context that they are taking place at only a small number of stores. In general, demand will likely pick up in most markets in the coming weeks, around the end-of-year holidays.

The national volume-weighted price for flower to be sold to general consumers was flat this week. Small downturns in California’s and Colorado’s adult-use sectors were counterbalanced by upticks in Oregon and Washington State. 

 

The national price for medical flower declined this week on decreases in that section of the market in Colorado, Massachusetts, and Michigan, in addition to falling rates in the medical-only systems of Arizona, Connecticut, Washington, D.C., Illinois, Maine, New Mexico, and Vermont.

January 2020 Forward unchanged at $1,475 per pound.

 

The average reported forward deal size was 49 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 50 pounds, 43 pounds, and 52 pounds, respectively.

 

At $1,475 per pound, the January 2020 Forward represents a premium of 2.3% relative to the current U.S. Spot Price of $1,442 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 Tax Collections Show Expanding Retail Demand; Cultivation Tax Receipts Shrink on Significantly Lower Volumes of Trim Moved by Growers

 

Colorado

October Sales Data Shows Demand Shrank for Second Straight Month, But YTD Retail Revenue Up Almost 14%

 

Oregon

Outdoor Flower’s Share of Observed Volume Traded Shrank to Lowest Levels of the Year in October and November, But Has Increased in Recent Weeks

 

Washington

State Spot Index Rises to New YTD Peak

 

Nevada

Total Retail Sales in September Down 7% From August’s Record Revenues

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

13 December 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved