April 5, 2019

U.S. Cannabis Spot Index — April 5, 2019

U.S. Cannabis Spot Index — Published April 5, 2019

U.S. Cannabis Spot Index down 2.0% to $1,066 per pound.

 

The simple average (non-volume weighted) price decreased nearly $10 to $1,108 per pound, with 68% of transactions (one standard deviation) in the $369 to $1,846 per pound range. The average reported deal size was nominally unchanged at 2.7 pounds. In grams, the Spot price was $2.35 and the simple average price was $2.44.


The relative frequency of trades for indoor flower decreased week-over-week by 1%. The relative frequency of transactions involving outdoor product increased by the same proportion, while that for deals involving greenhouse flower was flat. Greenhouse product’s share of the total reported weight moved nationwide increased by 3% relative to last week. The relative volumes of warehouse and outdoor flower both contracted, by 2% and 1%, respectively.   

The U.S. Spot Index declined by 2% this week, resuming the downward trend that commenced in mid-February and sliding to a year-to-date low of $1,066 per pound. The five largest adult-use markets – California, Colorado, Oregon, Washington, and Nevada – all saw their composite prices decrease this week. Notably, reported wholesale rates in California remain relatively stable, despite some market observers sounding the alarm regarding the expiration of temporary cultivation licenses, a matter we discuss below in more detail. This week also saw several markets that have seen rising prices for much of this year experience declines, namely Illinois, Rhode Island, and Washington, D.C. With just two weeks to go ahead of 4/20, it appears that the holiday will not result in discernible upward movement in the national composite rate, as it has in previous years.

The national volume-weighted price for flower to be sold in adult-use markets declined this week on decreases in all four of the major Western markets, as well as Nevada and Alaska. Rising prices for medical product in Maine, Michigan, and Massachusetts were primarily responsible for pushing up the national rate for flower to be sold to patients.   

October 2019 Forward initially assessed at $975 per pound.

 

The average reported forward deal size declined to 45 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 59%, 29%, and 12% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 42 pounds, 49 pounds, and 44 pounds, respectively.

 

The October 2019 Forward was assessed at $975 per pound, 3.9% lower than the September Forward of $1,015 per pound. For context, the U.S. Spot Index averaged $1,117 in September 2018 and declined 3.7% to $1,076 in October 2018.

 

 

At $1,050 per pound, the May Forward represents a discount of 1.5% relative to the current U.S. Spot Price of $1,066 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample Headlines From This Week’s Premium Report:

  • California

    Regulators Announce Intent to Issue Provisional Licenses as Temporary Permits Expire in Attempt to Avoid Market Disruption

  • Colorado

    Wholesale Prices Continued to Rise in Q1 2019, But Upward Momentum Slowed in March

  • Oregon

  • Falling Prices for Indoor and Greenhouse Flower, Increasing Relative Volume of Inexpensive Outdoor Product, Pulled State Spot Index to Historic Lows in Q1
  •  
  • Washington

  • Despite Price Rises Early This Year, Quarterly Average Spot Price for Q1 2019 Nearly Identical to Q4 2018’s Mean
  •  
  • Michigan

  • March 31st Licensing Deadline Goes Unenforced Due to Lawsuits Brought Against the State
  •  
  • Rhode Island

  • State Spot Index Up This Year as Sales and Patient Counts Grow, But New Cultivators Coming Online Could Provide Downward Pressure on Prices

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

5 April 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

March 29, 2019

U.S. Cannabis Spot Index — March 29, 2019

U.S. Cannabis Spot Index — Published March 29, 2019

U.S. Cannabis Spot Index up 1.2% to $1,087 per pound.

 

The simple average (non-volume weighted) price increased more than $5 to $1,117 per pound, with 68% of transactions (one standard deviation) in the $385 to $1,850 per pound range. The average reported deal size declined to 2.7 pounds. In grams, the Spot price was $2.40 and the simple average price was $2.46.

 

The relative frequency of trades for greenhouse flower decreased week-over-week by 1%. The relative frequency of transactions involving outdoor product increased by the same proportion, while that for indoor flower was flat. Warehouse product’s share of the total reported weight moved nationwide increased by 2% compared to last week. The relative volumes of both greenhouse and outdoor flower each decreased week-over-week by 1%.

The U.S. Spot Index reversed a sustained decline this week, ticking upward by 1.2% to settle at $1,087 per pound. The national composite rate rose on an increase in the volume-weighted price for indoor flower, as well as an expansion in that grow type’s relative volume. The U.S. rate for warehouse product is being pushed up by rising prices in the mid-sized medical markets of Illinois, Maine, Michigan, and New Mexico; of the four major Western markets only Washington saw prices for indoor flower increase this week. Expanding patient counts and demand in the first and final medical markets just listed have been driving prices in those states upward, while shifting regulatory landscapes in Michigan and Maine have resulted in uncertainty for participants in those markets.

The histograms below show price dispersion by grow type for March 2019 versus March 2018. Most notably, nearly 80% of outdoor transactions were priced above $600 per pound last year, whereas nearly 85% are currently priced below $600. Additionally, expansion of greenhouse capacity in higher priced markets such as Nevada (compared to West Coast markets) helped increase the proportion of greenhouse transactions priced above $1,000 per pound from 34% to 43%.   

April 2019 Forward closes unchanged at $1,075 per pound.

 

The average reported forward deal size declined to 46 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 59%, 28%, and 13% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 44 pounds, 48 pounds, and 44 pounds, respectively.

 

At $1,075 per pound, the April Forward represents a discount of 1.1% relative to the current U.S. Spot Price of $1,087 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample Headlines From This Week’s Premium Report:

  • California

    Over 300 Annual and Provisional Cultivation Licenses Issued Between Late February and March 22nd, But 3,450 Listed as “About to Expire” as of Last Week

  • Colorado

    Taxes on Flower Transferred Internally by Vertically-Integrated Adult-Use Operations Will Rise by Over 3% in Q2, the Second Consecutive Quarter to See an Increase

  • Oregon

  • Retail Demand Slides in February for Second Consecutive Month, as Spot Index Fell to a Historic Low for the State’s Market
  •  
  • Washington

  • LCB Canopy Report Shows that Growers are Not Fully Utilizing Allowed Production Capacity, Large Operations Hold Outsized Market Share
  •  
  • Nevada

  • State Spot Index Again Drops Sharply, Establishing New Historic Low for the Market for the Second Straight Week
  •  
  • Michigan

  • Unlicensed Dispensaries That Account for Almost Half of Operational Storefronts in the State to be Compelled to Close at End of March, Reducing Wholesale Demand

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

29 March 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

March 22, 2019

U.S. Cannabis Spot Index — March 22, 2019

U.S. Cannabis Spot Index — Published March 22, 2019

U.S. Cannabis Spot Index down 1.7% to $1,074 per pound.

 

The simple average (non-volume weighted) price decreased $43 to $1,112 per pound, with 68% of transactions (one standard deviation) in the $392 to $1,831 per pound range. The average reported deal size was nominally unchanged at 2.8 pounds. In grams, the Spot price was $2.37 and the simple average price was $2.45.

 

The relative frequency of trades for indoor flower decreased week-over-week by 3%. The relative frequency of transactions involving greenhouse and outdoor product increased by 1% and 2%, respectively. Outdoor flower’s share of the total reported weight moved nationwide increased by 2% compared to last week. The relative volume of warehouse-grown product decreased by the same magnitude, while that for greenhouse flower was stable week-over-week at just under a quarter of all documented weight moved nationally.  

The U.S. Spot Index ticked downward for the fifth consecutive week, by 1.7%, to settle at $1,074 per pound. This week is the third consecutive one in which the national composite price has fallen to establish a new year-to-date low. As we have pointed out previously, the behavior of the U.S. Spot in recent weeks has diverged from the upward momentum observed at this point in the year in both 2017 and 2018. Plentiful available inventory in the major adult-use markets is likely suppressing wholesale rates even as 4/20 approaches. Additionally, the ramp-up in production that has been occurring in Nevada since prior to adult-use sales opening in mid-2017 appears to have resulted in supply outpacing demand in the Silver State, which is currently seeing the most pronounced downward trend in wholesale prices of any sizeable legal cannabis market in the country.  

The national volume-weighted price for flower to be sold in adult-use markets declined this week on significant downturns in Oregon and Nevada, as well as a decline in Washington, which overwhelmed increases in California and Colorado. Falling prices for medical product in Arizona, Massachusetts, Michigan, and New Mexico, among other markets, pulled down the national rate for flower to be sold to patients.   

April 2019 Forward unchanged at $1,075 per pound.

 

The average reported forward deal size was unchanged at 46 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 58%, 29%, and 13% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 45 pounds, 48 pounds, and 44 pounds, respectively.

 

At $1,075 per pound, the April Forward is nominally equivalent to the current U.S. Spot Price of $1,074 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample Headlines From This Week’s Premium Report:

  • California

    Volume-Weighted Price for Indoor Flower Down by 5% Since Beginning of March, After Rising Through First Two Months of 2019

  • Colorado

    State Spot Index, Prices for Indoor and Greenhouse Flower, Up Compared to a Year Ago as Wholesale Rates Continue to Trend Upward in Current Quarter

  • Oregon

  • Spot Index Slips to Historic Low for the State, Settling Under $550 Per Pound
  • Relative Volume of Outdoor Flower Sees Significant Expansion This Week as Official Data Shows 1.15 Million Pounds of Unsold Plant Material in Licensed System
  •  
  • Washington

  • State Economists Report Lower-Than-Expected Tax Collections from State’s Cannabis Industry in February, But Expect Revenues to Rise and Stabilize Later this Year
  •  
  • Nevada

  • State Spot Index Settles Under $1,600 Per Pound for the First Time
  •  
  • Arizona

  • Total Sales Volume Decreases in February for Second Consecutive Month, Even as Sales of Extracts Jump Sharply

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

22 March 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

March 15, 2019

U.S. Cannabis Spot Index — March 15, 2019

U.S. Cannabis Spot Index — Published March 15, 2019

U.S. Cannabis Spot Index down 0.7% to $1,092 per pound.

 

The simple average (non-volume weighted) price decreased $30 to $1,155 per pound, with 68% of transactions (one standard deviation) in the $415 to $1,894 per pound range. The average reported deal size declined to 2.8 pounds from 3.1 pounds last week. In grams, the Spot price was $2.41, and the simple average price was $2.55.

 

The relative frequency of trades for indoor flower increased week-over-week by 1%. The relative frequency of transactions involving greenhouse product decreased by the same proportion, while that for deals for outdoor flower was unchanged. Outdoor product’s share of the total reported weight moved nationwide contracted by 1% compared to last week. The relative volume of greenhouse flower increased by the same magnitude, while that for indoor product was stable week-over-week.

The U.S. Spot Index ticked downward for the fourth consecutive week, by 0.7%, to settle at $1,092 per pound. At this point, it appears unlikely that a late-March rally in the national composite price will occur, as it has in each of the previous two years. 2017’s annual high price was observed in the final week of March, while the same week last year saw the second-highest weekly Spot rate documented in 2018. Still, it should be noted that sustained upward momentum in wholesale prices has been observed in several mid-sized and small markets so far this year – notably Michigan, Massachusetts, and Illinois. However, low and declining prices in the West Coast markets have overwhelmed those gains. Colorado’s Spot Index also saw its second decline in three weeks, tempering the consistent ascent of prices that was observed earlier this year.

The national volume-weighted price for flower to be sold in adult-use markets this week ticked upward slightly. While Oregon was the only such market to see an increase in its Spot Index, an increase in reported trading volume from that state lent the price rise more influence, causing it to outweigh marginal decreases in the other major recreational markets.         

April 2019 Forward unchanged at $1,075 per pound.

 

The average reported forward deal size declined nominally to 46 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was unchanged at 56%, 28%, and 16% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 50 pounds, 41 pounds, and 41 pounds, respectively.

 

At $1,075 per pound, the April Forward represents a discount of 1.6% relative to the current U.S. Spot Price of $1,092 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample Headlines From This Week’s Premium Report:

  • California

    Los Angeles Releases New Info on Next Phase of Local Licensing, But Timeline for More Retailers to Open Remains Uncertain

  • Colorado

    Total Retail Sales in January 2019 Down Month-Over-Month, But Up Almost 6% From January 2018

  • Oregon

  • State Spot Index Sees Second Consecutive Increase, Slowing Downward Momentum of Wholesale Prices Observed So Far in 2019
  •  
  • Washington

  • Composite Price Off by Almost 3% from Recent Peak Observed a Month Ago, After 12.5% Rise to Open 2019
  •  
  • Michigan

  • Recent Report Shows Steady Sales at Licensed Dispensaries from December through February As State Spot Index Rose During That Span

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

15 March 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

March 8, 2019

U.S. Cannabis Spot Index — March 8, 2019

U.S. Cannabis Spot Index — Published March 8, 2019

U.S. Cannabis Spot Index down 1.1% to $1,100 per pound.

 

The simple average (non-volume weighted) price increased $16 to $1,185 per pound, with 68% of transactions (one standard deviation) in the $409 to $1,962 per pound range. The average reported deal size increased to 3.1 pounds. In grams, the Spot price was $2.42, and the simple average price was $2.61.

 

The relative frequency of trades for indoor flower decreased week-over-week by 2%. The relative frequency of transactions involving greenhouse product decreased by the same proportion, while that for deals for outdoor flower was unchanged. Warehouse flower’s share of the total reported weight moved nationwide contracted by 1% compared to last week. The relative volume of greenhouse product increased by the same magnitude, while that for outdoor flower was stable week-over-week.   

The U.S. Spot Index ticked downward for the third consecutive week, by 1%, to settle at $1,100 per pound. Last year at this time, the national composite price had been on the rise for four straight weeks, behavior that would continue for another three consecutive weeks afterward.

 

Falling prices in California, Oregon, and Nevada have been primarily responsible for the downturn in the U.S. Spot Index so far this year, outweighing gradual gains in the more mature licensed adult-use markets of Colorado and Washington State. With upward momentum in the latter appearing to level off in recent weeks, further downward pressure on the national average could come from the Evergreen State in the near future.

The national volume-weighted price for flower to be sold in adult-use markets this week continued the downward slide that commenced in  late February on decreases in California, Washington State, Nevada, and Alaska. Upticks in the medical markets of Arizona, Michigan, Illinois, and Maine – as well as a few other smaller markets – drove up the national price for product designated for registered patients recorded this week.         

April 2019 Forward unchanged at $1,075 per pound.

 

The average reported forward deal size was nominally unchanged at 47 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 56%, 28%, and 16% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 51 pounds, 41 pounds, and 41 pounds, respectively.

 

At $1,075 per pound, the April Forward represents a discount of 2.2% relative to the current U.S. Spot Price of $1,100 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample Headlines From This Week’s Premium Report:

  • California

    State Spot Index Drops Below $1,100 Per Pound For the First Time Since Last Year’s Harvest Season

  • Colorado

    Composite Price Continued Upward Movement This Week, Despite Sales Trends Suggesting Plateau in Demand

  • Oregon

  • 70% of Reported Volume of Indoor Flower Traded Last Week Sold for Under $1,000 Per Pound, 28% Sold for Less Than $500 Per Pound
  •  
  • Washington

  • Bottom of State’s Wholesale Market for All Grow Types Has Shifted Downward Significantly in Past 12 Months
  •  
  • Nevada

  • Official Sales Data Shows Combined Adult-Use and Medical Cannabis Sales Topped $580 Million in 2018
  •  
  • New Mexico

  • New Interim Rule Allows Producers to Increase Plant Count by Over 5X, But How Quickly Additional Supply Can be Brought to Market is Uncertain
  •  
  • Illinois

  • Retail and Wholesale Revenues Both Reached Record Highs for State’s Medical Market in February as Spot Index Continues to Rise on Strong Demand
  •  

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

8 March 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved