April 23, 2021

U.S. Cannabis Spot Index — April 23, 2021

U.S. Cannabis Spot Index — Published April 23, 2021

U.S. Cannabis Spot Index down 0.8% to $1,516 per pound.

 

The simple average (non-volume weighted) price increased $2 to $1,771 per pound, with 68% of transactions (one standard deviation) in the $1,005 to $2,538 per pound range. The average reported deal size was 2.3 pounds. In grams, the Spot price was $3.34 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 greenhouse flower contracted by about 2% this week. The relative volumes of indoor and outdoor product each expanded by about 1%.

New data this week out of Michigan shows that the state’s young adult-use market saw a sales boom in March. Combined with revenue generated by medical cannabis dispensaries, total legal cannabis sales in Michigan reached over $145 million. Notably, Michigan’s March sales outpaced by a significant measure the over $109 million in revenue racked up by licensed retailers in Oregon in the same month, despite Michigan’s adult-use market being open for fewer than 18 months, making it roughly three years younger than Oregon’s. 

 

As we have noted in our reports throughout this month, the younger markets of Massachusetts, Illinois, and Michigan are now seeing sales comparable to or in excess of those out of more mature, but less-populated Western states, such as Oregon and Nevada. Despite rapidly-climbing sales, however, the state Spot Indices of Illinois and Michigan have both trended downward so far this year, indicating that production capacity in each state continues to ramp up and is better meeting demand compared to a year ago. 

 

 

The U.S. Spot has exhibited modest gains this month on the back of rising supply side rates in California and Arizona. Producers in Arizona are still building out additional production capacity after a faster-than-expected start to adult-use sales. California’s composite price has been lifted in part by the robust premium commanded by indoor-grown flower in the state, which is unique amongst other large Western markets.

May 2021 Implied Forward unchanged at $1,550 per pound.

 

The average reported forward deal size was 51 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 54%, 33%, and 13% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 63 pounds, 41 pounds, and 27 pounds, respectively.

 

At $1,550 per pound, the May Implied Forward represents a premium of 2.2% relative to the current U.S. Spot Price of $1,516 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:

Colorado

Denver Approves Cannabis Delivery, Lifts Business License Cap for Social Equity Applicants in New Legislation

Michigan

Monthly Adult-Use and Medical Cannabis Sales Spike 38% in March to Total Over $145 Million

Arizona

Newly Awarded Adult-Use Licenses Will Bring Storefronts to Rural Areas and Increase Statewide Production Capacity

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23 April 2021.  Copyright © 2021 New Leaf Data Services, LLC.  All rights reserved