U.S. Cannabis Spot Index — Published August 7, 2020
U.S. Cannabis Spot Index up 2.4% to $1,516 per pound.
The simple average (non-volume weighted) price increased $37 to $1,763 per pound, with 68% of transactions (one standard deviation) in the $944 to $2,581 per pound range. The average reported deal size was nominally unchanged at 2.2 pounds. In grams, the Spot price was $3.34 and the simple average price was $3.89.
The relative frequency of trades for indoor flower increased by 4% this week. The relative frequencies of transactions for greenhouse and outdoor product each decreased by 2%.
The relative volume of warehouse product expanded by over 5%. The relative volumes of greenhouse and outdoor flower contracted by about 3% and 2%, respectively.
In our report for July 24, we noted that sales data out of numerous markets showed that the dramatic expansions of demand documented in many state-legal cannabis systems had cooled. While sales continued to climb in numerous cases, they did so by much smaller magnitudes than the increases observed in March, April, and May. Some markets, such as Oregon, even saw small month-over-month downturns in June after several months of unprecedented growth.
However, the first July sales figures reported out of Massachusetts and Illinois this week show a resurgence in retail revenue in the adult-use sectors of both. Each market saw month-over-month sales spikes of around 30% in July, leading to new record revenue totals. It should be noted that in Illinois, the dramatic increase in sales may be related to expanding production beginning to catch up to demand. Illinois producers have been working rapidly since last year to build out new production capacity as the state moved quickly to begin adult-use sales this year, on top of experiencing strong growth in the medical sector.
Another notable development is freshly-reported May sales figures from Nevada show retail revenue bouncing back strongly that month, even as tourism to Las Vegas remained down by 96% compared to the same month last year. Curbside sales and pickup orders began to be allowed in Nevada in May, after retailers were limited to sales via delivery only from late March. It appears that keeping such sales channels open can make a big impact on the ability of legal cannabis sellers to meet consumer demand.
February 2021 Forward assessed at $1,350 per pound.
The average reported forward deal size was 30 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 42%, 33%, and 26% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 31 pounds, 26 pounds, and 33 pounds, respectively.
At $1,400 per pound, the September Forward represents a discount of 7.6% 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:
Sales Bounce Back Strongly in May Even as Tourism Remains Almost Nonexistent
July Adult-Use Sales Surge to New Record After Slow Restart in June
Previously Quarantined Vape Products May be Released for Sale Under New Order
Adult-Use Revenues Jump 28% in July, Account for Almost 80% of June’s Combined Medical and Adult-Use Sales
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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC
7 August 2020. Copyright © 2020 New Leaf Data Services, LLC. All rights reserved