August 9, 2019

U.S. Cannabis Spot Index — August 9, 2019

U.S. Cannabis Spot Index — Published August 9, 2019

U.S. Cannabis Spot Index up 1.3% to $1,337 per pound.

 

The simple average (non-volume weighted) price increased $18 to $1,494 per pound, with 68% of transactions (one standard deviation) in the $781 to $2,207 per pound range. The average reported deal size was nominally unchanged at 2.0 pounds. In grams, the Spot price was $2.95 and the simple average price was $3.29.

 

The relative frequency of trades for greenhouse flower decreased by 2% week-over-week. The relative frequency of transactions involving outdoor product increased by the same proportion, while that for deals for indoor flower was unchanged. Greenhouse flower’s share of the total documented weight moved nationally contracted by 5% this week. The relative volumes of warehouse and outdoor product expanded by 2% and 3%, respectively.

The U.S. Spot Index rose by 1.3% this week to settle at $1,337 per pound. The generally upward trend observed in wholesale cannabis prices this summer resumed after last week’s momentary downturn. Still, there are signs that downward pressure on rates could be arriving in major markets in the weeks to come. Relative volumes of outdoor flower in both California and Oregon saw significant expansions this week. Volume-weighted prices for such product continued to trend downward in California and have recently flattened in Oregon, after rates for outdoor flower in the Beaver State have been on the upswing since around the close of the first quarter.  

The national volume-weighted price for flower to be sold to general consumers increased this week on rises in that sector of the market in California and Colorado, as well as in Oregon, Washington State, and Alaska. Prices for medical flower were also on the upswing this week. Rates for product designated for registered patients saw upticks in California, Arizona, Illinois, New Mexico, Maine, Rhode Island, and Washington, D.C.  

 

September Forward unchanged at $1,240 per pound.

 

The average reported forward deal size was unchanged at 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower remained at 55%, 29%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 42 pounds, 51 pounds, and 62 pounds, respectively.

 

At $1,240 per pound, the September Forward represents a discount of 7.2% relative to the current U.S. Spot Price of $1,337 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

  • State Spot Index Rises to New YTD Peak, Settling at Highest Price Seen Since 4/20 2018
  •  
  • Colorado

    MED’s 2018 Annual Report Shows Amount of Flower Generated by Growers Expanded by 10% from 2017, But Growth in Production Capacity Leveled Off by End of 2018

  • Oregon

  • Increases in Relative Volume of Outdoor Flower and Flattening Prices for Such Product Have Tempered Upward Trend in State’s Spot Index
  •  
  • Washington

  • State Climatologist’s Report Indicates Favorable Growing Conditions for Hoop House and Outdoor Growers So Far this Season
  •  
  • Michigan

  • Most Medical Cannabis Businesses Will See Reductions in Licensing Fees for Upcoming FY

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

9 August 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

August 2, 2019

U.S. Cannabis Spot Index — August 2, 2019

U.S. Cannabis Spot Index — Published August 2, 2019

U.S. Cannabis Spot Index down 2.9% to $1,320 per pound.

 

The simple average (non-volume weighted) price decreased $79 to $1,476 per pound, with 68% of transactions (one standard deviation) in the $754 to $2,198 per pound range. The average reported deal size declined to 2.0 pounds from 2.2 pounds last week. In grams, the Spot price was $2.91 and the simple average price was $3.25.

 

The relative frequency of trades for indoor flower decreased by 3% week-over-week. The relative frequency of transactions involving outdoor product increased by the same proportion, while that for greenhouse flower was unchanged. Greenhouse flower’s share of the total documented weight moved nationally expanded by 1% this week. The relative volume of warehouse product shrank by the same proportion, while that for outdoor flower was stable.

The U.S. Spot Index declined by 2.9% this week to settle at $1,320 per pound. Downturns in three of the five major markets pulled down the national average, as Washington State and Nevada were the only states of that group to see rises in their Spot prices, and modest ones at that. Additionally, rates slid downward in the secondary markets of Illinois and Michigan, which had earlier this year been applying upward pressure on the U.S. Spot. Reports from Oregon indicate that the bulk of the summer light-deprivation crop has not yet come in, with new, fresh supply expected to hit the market later this month or in early September.  

The national volume-weighted price for flower to be sold to general consumers decreased this week on downturns in that sector of the market in California and Colorado, as well as in Oregon. 

 

Prices for medical flower rose this week. Rates for product designated for registered patients saw upticks in Washington State, Nevada, and Massachusetts, while the medical-only markets of Maine, Connecticut, D.C., and Vermont experienced increases in their Spot prices.

 

February 2020 Forward initially assessed at $1,200 per pound.

 

The average reported forward deal size was unchanged at 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 55%, 29%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 42 pounds, 52 pounds, and 64 pounds, respectively.

 

Several factors could combine to exert upward pressure on the U.S. Spot at the end of this year and in early 2020. As we discuss below, Illinois’ adult-use legalization law appears as if it has laid the groundwork for tight supply in the second-largest state by population to permit a recreational cannabis industry. Additionally, Michigan could begin adult-use sales late this year or in early 2020, although the scope of the market may be relatively small at the outset. 

 

Finally, Los Angeles continues to make progress toward issuing what is expected to be around 240 additional retail licenses. Applications for such permits are scheduled to be accepted beginning in September. Once the licenses are issued, it will represent the largest retail expansion in California’s legal market since the initial opening of the adult-use system at the beginning of 2018, creating a major source of new wholesale demand and shelf space to be filled. 

 

 

At $1,240 per pound, the September Forward represents a discount of 6.1% relative to the current U.S. Spot Price of $1,320 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

  • Monthly Average Spot Price Stable from June to July; July 2019’s Mean Price Up 8% Year-Over-Year
  •  
  • Colorado

    July 2019’s Spot Rate Up 20% Compared to Same Month Last Year

  • Oregon

  • Rainy Summer May Have Delayed Light-Deprivation Harvests, New Sun-Grown Supply Might Not Arrive Until Later in August

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

2 August 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

July 26, 2019

U.S. Cannabis Spot Index — July 26, 2019

U.S. Cannabis Spot Index — Published July 26, 2019

U.S. Cannabis Spot Index up 0.7% to $1,359 per pound.

 

The simple average (non-volume weighted) price increased $27 to $1,555 per pound, with 68% of transactions (one standard deviation) in the $782 to $2,327 per pound range. The average reported deal size declined to 2.2 pounds from 2.3 pounds last week. In grams, the Spot price was $3.00 and the simple average price was $3.43.

 

The relative frequency of trades for indoor flower increased by 3% week-over-week. The relative frequencies of transactions involving greenhouse and outdoor product decreased by 1% and 2%, respectively. Greenhouse flower’s share of the total documented weight moved nationally contracted by 4% this week. The relative volumes of warehouse and outdoor product each expanded by 2% relative to the week prior.

The U.S. Spot Index rose by 0.7% this week to settle at $1,359 per pound, establishing a new year-to-date high for the third straight week. Monthly average prices have also been on the rise recently. July is the third consecutive month to see an increase in its average Spot price. While demand has been strong in the major adult-use markets, there are signs that downward pressure on wholesale prices could emerge in some states in the weeks and months ahead. California’s legal market has been experiencing growing pains as it works to establish itself, but with nearly all temporary cultivation licenses expired, those businesses that gained annual and provisional permits appear poised to generate sufficient, if not excessive, supply. In Oregon, mid and late summer harvests boosted supply around this point in both 2017 and 2018. Finally, the volume and quality of the fall harvest has yet to be determined, as is whether record-setting demand levels are enough to absorb the surge of new inventory that will come in Q4.  

The national volume-weighted price for flower to be sold to general consumers increased for the second consecutive week on rises in that sector of the market in California and Colorado, as well as in Oregon’s and Alaska’s licensed systems. Prices for medical flower sank for the second straight week, despite many medical-only markets seeing increases in their Spot Indices. However, downturns in the medical portion of California’s market, along with a slight decline in Michigan and a decrease in Maine’s Spot, were the primary drivers of the downward slide in national rates for product designated as medical.

August Forward assessed up $25 to $1,300 per pound.

 

The average reported forward deal size was 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 55%, 29%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 42 pounds, 52 pounds, and 64 pounds, respectively.

 

At $1,300 per pound, the August Forward represents a discount of 4.3% relative to the current U.S. Spot Price of $1,359 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

  • State Cultivation Licensing Data Shows Permitted Growers Outnumber Legal Storefronts by About 2:1, Similar to Ratio in Oregon
  •  
  • Colorado

    State Spot Index Rises to New Annual Peak for the Fifth Straight Week as Rates for Both Indoor and Greenhouse Product Ascend

  • Oregon

  • Retail Sales Revenue for June Reaches Record High for State’s Market, But Sales Volume Figures Show Plateauing or Decreasing Demand in Q2
  •  
  • Washington

  • Regulators Loosen Some Reporting Requirements as Problems with Traceability System Persist
  •  
  • Nevada

  • Sales Rebound in May, State Spot Index Also on the Rise in that Month
  •  
  • Massachusetts

  • Adult-Use Retailers Gross Over $40 Million in Sales in June; State Spot Index Inched Upward as Harvest Data Showed Contraction in Production Compared to May

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

26 July 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

July 19, 2019

U.S. Cannabis Spot Index — July 19, 2019

U.S. Cannabis Spot Index — Published July 19, 2019

U.S. Cannabis Spot Index up 4.3% to $1,349 per pound.

 

The simple average (non-volume weighted) price increased $85 to $1,528 per pound, with 68% of transactions (one standard deviation) in the $736 to $2,319 per pound range. The average reported deal size increased to 2.3 pounds from 2.2 pounds last week. In grams, the Spot price was $2.97 and the simple average price was $3.37.

 

The relative frequency of trades for outdoor flower decreased by more than 6% week-over-week. The relative frequencies of transactions involving indoor and greenhouse product increased by about 2% and 5% respectively. Outdoor flower’s share of the total documented weight moved nationally contracted by 9% this week. The relative volumes of warehouse and greenhouse flower expanded by 5% and 4%, respectively, relative to the week prior.

The U.S. Spot Index rose by 4.3% this week to settle at $1,349 per pound, establishing a new year-to-date high for the second straight week. Emphasizing the extent of the recent recovery in U.S wholesale cannabis rates this year, this week’s national composite price would have been the fifth-highest recorded in all of 2018. Strong year-over-year demand growth in the four major Western markets continues to apply upward pressure on prices, especially as licensing and harvest data out of California, Colorado, and Oregon indicate that legal production capacity has either decreased or stabilized relative to a year ago. A significant contraction in the relative volume of outdoor product also underpinned this week’s rise in the U.S. Spot, as wholesale buyers on the West Coast continue to spurn last year’s harvest and are turning to summer light-deprivation crops, which come with higher prices than 2018’s outdoor product.  

The national volume-weighted price for flower to be sold to general consumers jumped this week on rises in that sector of the market in California and Colorado, as well as in Oregon’s licensed system, which makes no distinction between adult-use and medical product at the point of wholesale transfer. Prices for medical flower sank this week. Despite a rise in rates in that portion of California’s market, week-over-week declines were observed in essentially every sizeable medical-only legal cannabis program – namely Arizona, Illinois, Maine, Michigan, and Rhode Island. 

August Forward assessed up $75 to $1,275 per pound.

 

The average reported forward deal size was 49 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 55%, 29%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 42 pounds, 53 pounds, and 64 pounds, respectively.

 

The entire Six-Month Implied Forward Curve was assessed upward this week. Continued demand growth in the major Western markets this year appears as if it is straining production capacities that have stabilized or diminished relative to a year ago. Meanwhile, despite robust harvests cut down at the end of last year, buyers are reportedly dissatisfied with the remaining inventory on offer and are turning increasingly to higher-priced indoor, greenhouse, and light-deprivation product that has been cut down more recently.  

 

 

At $1,275 per pound, the August Forward represents a discount of 5.5% relative to the current U.S. Spot Price of $1,349 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

  • Audit of BCC Indicates that Oversight and Enforcement of Licensed Businesses Has Room to Become Significantly More Stringent
  •  
  • Colorado

    Retail Revenues Rise to Reach New Record High in May, YTD Sales Up Almost 9% Compared to First Five Months of 2018

  • Oregon

  • Historical Harvest Data Shows Large Increases in July 2018 and August 2017, Suggesting New Supplies Could Reach Market in the Coming Weeks
  •  
  • Washington

  • Traceability System Issues Hamper Wholesale Trading this Week as State Spot Index Continues to Climb
  •  
  • Arizona

  • June Sales Volume to Patients Declines After Two Straight Months of Record Demand, State Spot Index Also Slips Slightly

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

19 July 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

July 12, 2019

U.S. Cannabis Spot Index — July 12, 2019

U.S. Cannabis Spot Index — Published July 12, 2019

U.S. Cannabis Spot Index up 1.2% to $1,293 per pound.

 

The simple average (non-volume weighted) price decreased $13 to $1,442 per pound, with 68% of transactions (one standard deviation) in the $640 to $2,245 per pound range. The average reported deal size declined to 2.2 pounds from 2.5 pounds last week. In grams, the Spot price was $2.85 and the simple average price was $3.18.

 

The relative frequency of trades for indoor flower decreased by more than 2% week-over-week. The relative frequency of transactions involving greenhouse product increased by the same proportion, while that for outdoor flower was unchanged. Greenhouse product’s share of the total documented weight moved nationally expanded by over 8% this week. The relative volumes of warehouse and outdoor flower contracted by about 6% and 3% respectively, relative to the week prior. 

The U.S. Spot Index rose by 1.2% this week to settle at $1,293 per pound, establishing a new year-to-date high after a small decline last week. The upward trend in the national composite price is being observed even in the face of injections of supply from summer light-deprivation crops, particularly in California. However, we have in the past observed wholesale price rises at the outset of light-dep or outdoor harvests, as fresher plant material is more appealing and can garner higher rates than that which was cut down months ago, or even the year prior. Market participants are also reporting lower demand from retailers in the wake of July 4, due to shops stocking up on extra inventory ahead of time. Yet rates in the four major Western markets all ticked upward this week, with Nevada the only large market to see a decline in its Spot.  

The national volume-weighted price for flower to be sold to general consumers declined this week as downturns in California and Nevada overwhelmed increases in Colorado, Oregon, and Washington State. Prices for medical flower increased sharply this week thanks to a notable jump in rates for such product in California. Additionally, apart from Maine and Vermont, every medical-only market covered in our reporting saw an increase in its Spot Index this week.

August Forward up $50 to $1,200 per pound.

 

The average reported forward deal size was 48.5 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 56%, 29%, and 15% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 42 pounds, 53 pounds, and 63 pounds, respectively.

 

At $1,200 per pound, the August Forward represents a discount of 7.2% relative to the current U.S. Spot Price of $1,293 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

  • Changes to Provisional Licensing Should Expand and Stabilize Number of Businesses Able to Participate in the State’s Licensed System
  •  
  • Colorado

    Volume-Weighted Rates for Indoor Flower Showed Notable Stability through First Half of 2019

  • Oregon

  • Behavior of State Spot Index in Q2 Shows that Wholesale Prices in Oregon Remain Some of Most Volatile in the U.S.
  •  
  • Washington

  • Average Price for Outdoor Flower in Q2 Down Compared to Prior Quarter, Bucking Trends Observed in Other West Coast Markets
  •  
  • Illinois

  • Demand Continues to Boom in State’s Medical Market; YTD Dispensary Sales for H1 2019 up 70% Compared to H1 2018, Retail Revenues for June Up 93% YOY

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

12 July 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved