March 20, 2020

U.S. Cannabis Spot Index — March 20, 2020

U.S. Cannabis Spot Index — Published March 20, 2020

U.S. Cannabis Spot Index down 2.1% to $1,375 per pound.

 

The simple average (non-volume weighted) price decreased $27 to $1,591 per pound, with 68% of transactions (one standard deviation) in the $845 to $2,337 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.03 and the simple average price was $3.51.

 

The relative frequency of trades for greenhouse flower decreased by 5% this week. The relative frequencies of deals for indoor and outdoor product increased by 3% and 2%, respectively. 

 

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

Fallout from the COVID-19 – or coronavirus – pandemic continued to ripple across the U.S. this week. Reports from several states told of runs on legal cannabis retailers, as consumers and patients looked to stock up ahead of taking recommended social distancing and self-isolation measures. We noted in last week’s report that the COVID-19 pandemic could result in a short-term increase in demand due to such circumstances.

 

In other cases, such as in the San Francisco Bay Area, residents were ordered to “shelter in place,” or stay at home unless absolutely necessary, beginning Monday, March 16. However, while non-essential businesses in the Bay Area were ordered to close, licensed cannabis retailers were deemed essential and permitted to stay open. California Governor Gavin Newsom extended the shelter-in-place order to the entire state beginning Thursday, March 19. Yet, in virtually all states with legal cannabis markets, sales have continued through this week. Officials in numerous states have designated cannabis retailers – both medical and adult-use – as essential businesses for the time being.

 

A rundown from Leafly provides updates on many regulated cannabis markets in the U.S.

April Forward down $35 to $1,400 per pound.

 

The average reported forward deal size was 38 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 48%, 35%, and 17% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 43 pounds, 31 pounds, and 36 pounds, respectively.

 

 

At $1,400 per pound, the April Forward represents a premium of 1.8% relative to the current U.S. Spot Price of $1,375 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

Northern California Grower States Wholesale Sales are Slow, Attributes to Shelter-in-Place Order for San Francisco Bay Area

Oregon

February Retail Sales Up 30% YoY

 

Michigan

February Sales and Production Data Indicates Supply is Loosening, Future Months Should See Bigger Harvests if Production is Not Disrupted by Pandemic

       

Arizona

Dispensaries Sell Almost 13,400 Pounds of Flower in February

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

Become a member of our Price Contributor Network and receive discounted pricing and exclusive analysis!

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

20 March 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

March 13, 2020

U.S. Cannabis Spot Index — March 13, 2020

U.S. Cannabis Spot Index — Published March 13, 2020

U.S. Cannabis Spot Index up 1.1% to $1,404 per pound.

 

The simple average (non-volume weighted) price increased $45 to $1,617 per pound, with 68% of transactions (one standard deviation) in the $866 to $2,369 per pound range. The average reported deal size increased to 2.1 pounds. In grams, the Spot price was $3.10 and the simple average price was $3.57.

 

Transaction stats on the national level, shown in the chart below, were largely stable from last week. 

 

 

As we approach the end of the first quarter of 2020, relatively more indoor flower is being traded compared to the start of this year. In the opening week of 2020, each grow type constituted roughly a third of the total observed volume traded in the U.S. Now, however, indoor flower’s share of the total documented weight moved is almost half. Despite higher-priced warehouse product making up a significantly larger portion of the total, this week’s U.S. Spot is up only $7 from the first week of this year. 

The U.S. Spot Index rose by 1.1% this week to settle at $1,404 per pound. As the COVID-19 – or coronavirus – pandemic dominates national and international headlines, it is not yet clear how the situation will impact the U.S. cannabis industry. However, numerous states with large legal cannabis markets are being affected. At this point, information from the Centers for Disease Control (CDC) shows that Washington State and California are among the top three states in terms of reported cases of the virus (along with New York). As of March 12, Colorado officials had counted 49 presumptive cases of COVID-19 in the state. 

 

Recommended measures such as “social distancing” could lead to lower sales for a period, depending on how long the situation persists. On the other hand, consumers and patients in hard-hit areas may look to stock up on product ahead of isolating themselves, possibly providing a short-term increase in demand. On the production side, greater spread of the virus in areas with significant cultivation capacity could interrupt or constrict supply if employees are compelled to stay home or work only intermittently. 

 

In more quotidian developments, Boston saw its first licensed adult-use retailer open recently, which should result in a boost to statewide revenue figures as there are currently only about three dozen permitted recreational storefronts in Massachusetts. Meanwhile, regulatory changes in Michigan could tighten supply and result in less flexibility in transferring product from the medical to the adult-use sector in some cases.

March Forward unchanged at $1,435 per pound.

 

The average reported forward deal size was 38 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 48%, 36%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 43 pounds, 31 pounds, and 37 pounds, respectively.

 

 

At $1,435 per pound, the April Forward represents a premium of 2.2% relative to the current U.S. Spot Price of $1,404 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

Q4 2019 Tax Collections Suggest Flattening Retail Sales, While Amount of Flower Entering Commercial Market Grew Almost 20% from Prior Quarter

Colorado

January 2020 Sales Up 12% YoY, Maintaining Annual Growth Rate Observed for 2019

 

Michigan

Officials Apply New Parameters to Transfers from Medical Dispensaries to Adult-Use Retailers, Allow Growers to Transfer Plants from Medical to Adult-Use Operations

       

Washington

Public Hearing on Proposed Rules for Enhanced Quality Control Testing Delayed, Comment Period Extended Due to Coronavirus Concerns

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

Become a member of our Price Contributor Network and receive discounted pricing and exclusive analysis!

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

13 March 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

March 6, 2020

U.S. Cannabis Spot Index — March 6, 2020

U.S. Cannabis Spot Index — Published March 6, 2020

U.S. Cannabis Spot Index up 2.3% to $1,389 per pound.

 

The simple average (non-volume weighted) price decreased $6 to $1,572 per pound, with 68% of transactions (one standard deviation) in the $838 to $2,306 per pound range. The average reported deal size decreased to 2.0 pounds. In grams, the Spot price was $3.06 and the simple average price was $3.47.

 

The relative frequency of trades for indoor flower decreased by 4% this week. The relative frequency of deals for greenhouse product increased by the same proportion, while that for transactions for outdoor flower was unchanged. 

 

 

Warehouse product’s share of the total reported weight moved nationally contracted by 3% this week. The relative volume of greenhouse flower expanded by the same proportion, while that for outdoor flower was unchanged.

The U.S. Spot Index rose by 2.3% this week to settle at $1,389 per pound. National prices for outdoor flower stabilized this week after declining since mid-January. The U.S. volume-weighted average for indoor product also bounced back this week after declines in the latter portion of February. 

 

On the state level, four of the five largest markets saw upticks in the Spot rates, with Colorado the only exception. Oregon is the state with the most up-to-date, detailed market data available at this point, which shows roughly 800,000 pounds of unsold flower and trim still in the hands of growers and processors. While wholesale prices in the state rose despite similar surpluses at this time last year, we expect that sales growth – which approached 25% year-over-year in 2019 – will subside this year. 

 

Looking ahead, high wholesale flower prices in Illinois, Massachusetts, and Michigan could lift the U.S. Spot. However, adult-use sales slipped month-over-month in Illinois in February, likely due mainly to inadequate supply. Given the slower rollouts taking place in those states – relative to the preceding Western markets that generally had larger medical cannabis systems to build on – it is at this point an open question as to whether trading volumes in the newer markets will expand to rival those of the West Coast states and Colorado this year.

September Forward initially assessed at $1,400 per pound.

 

The average reported forward deal size was 39 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 50%, 33%, and 17% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 43 pounds, 33 pounds, and 37 pounds, respectively.

 

 

At $1,435 per pound, the March Forward represents a premium of 3.3% relative to the current U.S. Spot Price of $1,389 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

Cultivators Held Over 55% of Over 1 Million Pounds of Unsold Flower & Trim as of early February

Nevada

Total Legal Cannabis Sales Topped $700 Million in 2019, Up 21% YoY

 

Michigan

Licensed Businesses No Longer Able to Purchase Extracts and Other Manufactured Products from Caregivers, Now Limited to Flower and Trim Only  

       

Illinois

February Retail Sales in Adult-Use Sector Down 11% MoM, Likely Due to Limited Supply

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

Become a member of our Price Contributor Network and receive discounted pricing and exclusive analysis!

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

6 March 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved

February 28, 2020

U.S. Cannabis Spot Index — February 28, 2020

U.S. Cannabis Spot Index — Published February 28, 2020

U.S. Cannabis Spot Index down 4.4% to $1,358 per pound.

 

The simple average (non-volume weighted) price decreased $107 to $1,578 per pound, with 68% of transactions (one standard deviation) in the $861 to $2,296 per pound range. The average reported deal size decreased to 2.1 pounds. In grams, the Spot price was $2.99 and the simple average price was $3.48.

 

The relative frequency of trades for greenhouse flower decreased by 5% this week. The relative frequencies of deals for indoor and outdoor product increased by 3% and 2%, respectively. 

Greenhouse product’s share of the total reported weight moved nationally contracted by 4% this week. The relative volume of outdoor flower expanded by the same proportion, while that for warehouse flower was unchanged.

U.S. Spot Index declined by 4.4% this week to settle at $1,358 per pound. Overall on a national level, and in the West Coast states individually, outdoor flower has been observed to have been coming to market in increased amounts in recent weeks. Average deal sizes for such product, as well as its proportions of the total amount of flower documented to have been traded, have been on the rise. Although prices for outdoor product are generally strong relative to a year ago, the greater prevalence of the lowest-priced grow type has contributed to the recent downward trend in the national composite price. 

 

Meanwhile, the recent development of slightly falling prices in the states with the newest adult-use markets persisted this week. However, assessments of both adult-use and medical product prices were observed to stabilize overall this week in Illinois, Michigan, and Massachusetts. However, in the latter state, sales continue to grow while production has stagnated in the past four months. Additionally, production data out of Michigan reviewed in previous reports indicates that a lull in harvests could occur at some point in the coming weeks, leading to tighter supply.

March Forward assessed down $40 to close at $1,435 per pound.

 

The average reported forward deal size was 40 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 50%, 34%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 44 pounds, 33 pounds, and 39 pounds, respectively.

 

At $1,435 per pound, the March Forward represents a premium of 5.7% relative to the current U.S. Spot Price of $1,358 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 Officials Release Proposed Regulations to Establish Appellations of Origin for Cannabis Products

Arizona

January 2020 Sales Volumes Slip Slightly for Second Straight Month; Still Up 30% YoY

 

Massachusetts

Monthly Adult-Use Revenues Top $50 Million for the First Time in January as State Spot Ascended Above 2019 Peaks   

       

Illinois

Medical Cannabis Sales Down Almost 15% in January, While Average Flower Price for Patients Rose 5%

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

Become a member of our Price Contributor Network and receive discounted pricing and exclusive analysis!

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

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

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

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

Become a member of our Price Contributor Network and receive discounted pricing and exclusive analysis!

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

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