U.S. Cannabis Spot Index up 2.5% to $1,554 per pound.
The simple average (non-volume weighted) price decreased $1 to $1,770 per pound, with 68% of transactions (one standard deviation) in the $1,011 to $2,530 per pound range. The average reported deal size was 2.2 pounds. In grams, the Spot price was $3.43 and the simple average price was $3.90.
The relative frequency of trades for indoor flower decreased by 1% this week. The relative frequency of transactions for outdoor product increased by the same proportion, while that for greenhouse flower was unchanged.
The relative volumes of greenhouse and outdoor flower both contracted marginally this week, with that for warehouse product expanding slightly.
The U.S. Spot Index rose to a year-to-date peak this week to touch its highest point since late November 2020, when a fall harvest-related decline in national wholesale flower prices commenced. Additionally, after the monthly average U.S. composite price was largely stable from February to March, April saw the U.S. Spot average $1,527 per pound, an increase of 1.3% from the previous month.
The gradual upward trend in wholesale flower prices to begin Q2 2021 contrasts with behavior observed last year, when the U.S. Spot slid downward from mid-February through late May. At that time, the COVID-19 pandemic was just arriving and beginning to take hold in America, and market participants faced significant uncertainty as to how consumer demand for cannabis would respond.
Now, however, legal cannabis businesses have experienced roughly a year of elevated demand, while historical trends indicate that sales will continue to increase in the coming months. Newer markets in higher-population states continue to expand as well. Meanwhile, the first full month of adult-use sales in Arizona saw the state’s licensed businesses post impressive total revenue figures, but also suggested significant room for growth in the new recreational sector.
May 2021 Implied Forward closes 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 discount of 0.2% relative to the current U.S. Spot Price of $1,554 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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