The U.S. Cannabis Spot Index decreased 0.4% to $950 per pound.
The simple average (non-volume weighted) price decreased $63 to $1,235 per pound, with 68% of transactions (one standard deviation) in the $494 to $1,977 per pound range. The average reported deal size increased to 2.7 pounds. In grams, the Spot price was $2.09 and the simple average price was $2.72.
The relative frequency of transactions for indoor flower fell 1%, while that of greenhouse flower rose 1%. Outdoor transaction frequency was unchanged in the week.
The relative volume of indoor product rose 1%, while that of greenhouse product rose 2% and that of outdoor product fell 2%.
U.S. Spot price slipped $3 to test the $950 per pound level for the first time ever as legacy markets saw a net $29 gain. California and Oregon added $16 and $34 per wholesale pound this week. Colorado slid $17 this week to reach yet another record low price. Washington State has managed to keep well above its all-time low as price regressed to 2019 levels and steadied, a feat normally associated with legal trading markets. Washington’s rather steady prices suggest the market is more commoditized than that of super-producers California and Oregon, having got the limited licensing game just right.
Legacy state outdoor prices continue to bump along the bottom of recent ranges despite a significant pullback in harvest totals in Oregon. That said, prices for the most plentiful grow type in legacy states appear to be bottoming out. The price pull of abundant outdoor crops spread up through greenhouse and indoor product. Now, however, as downside moves are generally smaller, some indoor and greenhouse prices have recently turned higher. While Oregon and Washington State outdoor prices appear to have stalled out down at a 100% regression to 2019 prices, California and Colorado made significant new lows in the post pandemic market, far exceeding what would have been a 100% retracement from pandemic highs, suggesting these markets are still producing too much cannabis.
January 2023 Implied Forward unchanged at $975 per pound.
The average reported forward deal size was 78 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 41%, and 13% of forward arrangements, respectively.
The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 91 pounds, 70 pounds, and 56 pounds, respectively.
At $975 per pound, the January 2023 Implied Forward represents a premium of 2.7% relative to the current U.S. Spot Price of $950 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.
