U.S. Cannabis Spot Index up 0.5% to $1,529 per pound.
The simple average (non-volume weighted) price increased $1 to $1,769 per pound, with 68% of transactions (one standard deviation) in the $1,001 to $2,537 per pound range. The average reported deal size was 2.2 pounds. In grams, the Spot price was $3.37 and the simple average price was $3.90.
The relative frequencies of trades for each grow type were essentially unchanged from last week.
The relative volume of indoor flower expanded by 1% this week. The relative volume of greenhouse product contracted by the same proportion, while that for outdoor flower was stable.
While the U.S. Spot Index has been relatively stable to this point in 2021, there has been an overall upward trend, albeit a modest one, since late January. Month-to-date, the national composite price is averaging $1,521 per pound for April, up from $1,508 per pound last month. In 2020, the U.S. Spot trended downward from late February through late May, before robust demand during the pandemic began to pressure supplies and push prices upward.
As we pointed out last week in regard to several significant state markets, demand remains strong this year. However, new February sales data out of Colorado shows that year-over-year growth in retail revenue slowed compared to the prior month. In last week’s report, we pointed out a similar observation in regard to Oregon’s sales; namely, that although annual growth rates remain impressive – in excess of 20% for both of the markets under discussion for the most recent month that sales data are available – they represent slowdowns compared to the booming annual growth rates documented in 2020.
The slowdown in sales growth in more mature markets has been accompanied by a documented increase in production in Oregon. While such data is not yet available for Colorado, previous information from the state has shown that licensed producers there are not close to utilizing their allowed production capacity fully, providing for the possibility of increased cultivation to meet the expanded demand that has manifested over the past year. Production is also ramping up in newer markets, which is likely contributing to the stability of the U.S. Spot this year.
May 2021 Implied Forward unchanged at $1,550 per pound.
The average reported forward deal size was 51.4 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 54%, 34%, and 12% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 64 pounds, 41 pounds, and 26 pounds, respectively.
At $1,550 per pound, the May Implied Forward represents a premium of 1.4% relative to the current U.S. Spot Price of $1,529 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.
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