U.S. Cannabis Spot Index decreased 2.0% to $1,515 per pound.
The simple average (non-volume weighted) price decreased $27 to $1,843 per pound, with 68% of transactions (one standard deviation) in the $1,007 to $2,679 per pound range. The average reported deal size was 2.6 pounds. In grams, the Spot price was $3.34 and the simple average price was $4.06.
The relative frequencies of trades for each grow type were relatively stable from last week.
The relative volumes of each grow type were also virtually unchanged from last week.
An increase in late summer supply – as well as supply from last year’s autumn harvest, in some cases – is pushing down assessed flower prices in California and Oregon. Meanwhile, surging demand in newer adult-use markets such as Michigan is lifting or stabilizing wholesale flower prices in those states.
In some states, such as Illinois, the state’s Spot Index has recently climbed above $4,000 per pound, a milestone that it tested, but did not exceed in all of 2020, the first year of adult-use sales in the state. In Massachusetts, observed wholesale flower prices have stabilized at around $3,500 – $3,550 per pound in recent weeks.
Arizona has also seen its Spot price remain steady. Despite Arizona’s adult-use market being only about seven months old, the state’s Spot has tracked at prices roughly half those observed in Massachusetts recently. Arizona’s medical cannabis program already boasted robust production, which operators have been able to expand upon in recent months, as the state has no capacity limits on individual cultivators.
Still, surging sales and higher prices in newer markets have not yet reached a magnitude sufficient to direct the course of the U.S. Spot as a whole. This is due to the fact that significantly higher prices in those states belie significantly smaller volumes traded. For example, in Massachusetts, Cannabis Benchmarks projects that around 110,000 pounds will be sold to consumers in the state’s adult-use market by the end of 2021. This figure is less than half the 250,000 pounds of flower we estimate were sold in Oregon last year.
September 2021 Implied Forward assessed down $15 to $1,600 per pound.
The average reported forward deal size increased 6% to 67 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 47%, 40%, and 13% of forward arrangements, respectively.
The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 85 pounds (up nearly 8% from 79 pounds last week), 52 pounds, and 29 pounds, respectively.
At $1,600 per pound, the September Implied Forward represents a premium of 3.5% relative to the current U.S. Spot Price of $1,546 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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