The U.S. Cannabis Spot Index decreased 2.0% to $985 per pound.
In grams, the Spot price was $2.17.
U.S. wholesale spot cannabis price fell $20 this week and is trading just over the all-time low made in mid-December 2023. Since November 2022, the market has been trading in just a $55 range. Such behavior is typically indicative of a bottom in the market, but since the U.S. spot price is determined by combining prices in artificially segregated state markets, one cannot say the downside is over. Evidence for a near-term bottom might come from states that themselves are trading in a tightening range with low volatility.
Legacy state cannabis prices made a net gain of $3 this week on the back of a $10 gain in California spot and $27 gain in Washington State spot. Oregon’s price slid another $12 this week and is nearer to the bottom of a $43 trading range intact since mid-January 2023. Colorado spot fell $22 this week and looks likely to test the all-time low set in January 2023.
New England markets collectively jumped $72 this week led by a $96 gain in Massachusetts spot price. Rhode Island spot was up $19 this week as it slowly recovers from a brutal sell-off that took price down 52.5% between July 2022 and the end of January 2023. Connecticut and Vermont remain the two most expensive cannabis markets in New England with prices north of $2,400 per wholesale pound. That circumstance is likely to continue as both markets are constrained by what appear to be intentionally slow roll-outs of their respective adult use markets; slow licensing, caps on how much consumers can buy, and the sheer expense of getting into those markets.
It’s worth following the Cannabis Benchmarks U.S. Spot Price as it reflects legal cannabis prices across the country and is therefore a leading indicator of where prices are headed long term. Regional prices offer a more nuanced view of the market since they tend to reflect the cost of production in the broadest sense in each region. All things being equal, it is not unreasonable to expect regional prices to converge. Given differing production costs and other factors, this should provide guidance on whether one wishes to enter a regional market and in what capacity – vertically integrated, partially integrated, or at a single spot on the supply chain?
May 2023 Implied Forward unchanged at $1,015 per pound.
At $1,015 per pound, the May 2023 Implied Forward represents a premium of 3.1% relative to the current U.S. Spot Price of $985 per pound.
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