The U.S. Cannabis Spot Index increased 2.8% to $1,301 per pound.
The simple average (non-volume weighted) price increased $1 to $1,535 per pound, with 68% of transactions (one standard deviation) in the $688 to $2,382 per pound range. The average reported deal size declined to 2.3 pounds. In grams, the Spot price was $2.87 and the simple average price was $3.38.
The relative frequency of transactions for indoor flower rose 1%, while greenhouse deal frequency was unchanged. Outdoor deal frequency fell 1%.
The relative volume of indoor flower rose 1%; that of greenhouse flower was unchanged, while that of outdoor flower fell 1%.
Legacy state spot prices were mixed this week. Colorado Spot slipped nearly $6 per pound on 10-week average weekly losses of -$3, although spot has gained ground in four of the last six weeks. California Spot price rose $1.30, though average weekly losses are still in negative territory at -$5 per pound over the past 10 weeks. That said, California’s weekly losses have narrowed from -$8.62 per pound last week. Oregon Spot fell over $20 per pound, though average weekly losses are narrowing as well, dropping down to -$13.60 from last week’s average loss of -$15.50. Washington State Spot price gained just over $2 this week, cutting 10-week average weekly losses down to -$2 per pound versus nearly -$5 per pound last week.
Younger markets in high population states have also been under significant price pressure this year. Illinois Spot is down over 9% this year. While the legal issues surrounding licensing in the state have yet to be worked out, it appears there is some jockeying for position, based on price, before new licenses hit the market.
Michigan Spot has also undergone a bit of a rout this year, falling just over 40%. This week Michigan Spot shaved off another $33, pushing 10-week average weekly losses to nearly $72 from $60 last week. Losses of this magnitude will likely not be fully reversed, though a move back upward may occur if there is a seasonal spring / summer demand surge.
Massachusetts Spot continues to be pummeled with a $35 per pound drop this week on a 10-week average weekly loss of over $95 per pound. Spot pound prices are down nearly 32% this year, as demand appears to have plateaued at about $116 million per month in the adult use market. Despite the losses in Massachusetts spot prices, retail ounce prices have only fallen 1.7% this year, from $367.59 to $361.42.
The most expensive cannabis in the U.S. continues to be in states with special factors. Alaska is remote and thus unlikely to see illicit interstate arbitrage pressuring prices, which are propped up by an $800 per pound wholesale tax on flower. Illinois is an adult use unicorn in the Midwest, pulling significant traffic from nearby states and supplied by only about 20 licensed cultivators. In Connecticut, the adult use market has yet to open and prices will likely rise ahead of sales at the end of 2022. Yet, these expensive markets will and have started to fall toward Cannabis Benchmarks U.S. Spot price; at the end of the day, it is all one commodity, though not yet one market.
May 2022 Implied Forward unchanged at $1,265 per pound.
The average reported forward deal size declined fractionally to 78.2 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were unchanged at 36%, 50%, and 14% of forward arrangements, respectively.
The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 86 pounds, 77 pounds, and 62 pounds, respectively.
At $1,265 per pound, the May 2022 Implied Forward represents a discount of 2.8% relative to the current U.S. Spot Price of $1,301 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.
Illinois Cannabis Sales Skyrocket to $131 million
Prices & Seasonal Factors Weigh on Monthly Cannabis Sales
Adult Use Sales Opening Weekend Exceeds Expectations – Interview
March Cannabis Sales Set New Record High