U.S. Cannabis Spot Index down 0.3% to $1,437 per pound.
The simple average (non-volume weighted) price decreased $14 to $1,645 per pound, with 68% of transactions (one standard deviation) in the $972 to $2,318 per pound range. The average reported deal size was nominally unchanged at 2.1 pounds. In grams, the Spot price was $3.17 and the simple average price was $3.63.
The relative frequency of trades for indoor flower increased by almost 2% this week. The relative frequencies of deals for greenhouse and outdoor product each decreased by about 1%.
Outdoor flower’s share of the total reported weight moved nationally contracted by 5% this week. The relative volumes of warehouse and greenhouse product expanded by 3% and 2%, respectively.
The U.S. Spot Index declined by 0.3% this week to settle at $1,437 per pound. The current month-to-date average price for December is down slightly compared to November’s mean U.S. composite rate.
At this point, this observation bucks trends from the prior two years. In 2017, the monthly average U.S. Spot price rose by 0.4% from November to December, from $1,412 to $1,417 per pound. In 2018, the monthly average national composite rate rose by 5.7% in the same span, from $1,075 to $1,136 per pound.
Next week’s U.S. Spot price would have to settle at above $1,483 per pound to exceed November’s average, which would constitute a week-over-week increase of at least 3.2%. This seems unlikely given recent trends. Upward price movement observed earlier this year in California, Colorado, and Oregon has leveled off and, in the case of the latter market, reversed recently.
Meanwhile, although the opening of the adult-use market in Michigan and a reportedly smaller fall harvest in Washington this year is pushing up rates in those states, the sizeable markets of Nevada and Arizona are balancing that upward pressure on the U.S. Spot with downward-trending composite prices.
The national volume-weighted price for flower to be sold to general consumers was flat for the second straight week. Increases in California, Washington, and Massachusetts were counterbalanced by declines in Colorado, Oregon, and Nevada.
The national price for medical flower declined this week on decreases in that section of the market in California and Colorado, in addition to falling rates in the medical-only systems of Illinois, Maine, and New Hampshire.
January 2020 Forward unchanged at $1,475 per pound.
The average reported forward deal size was 48 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 46%, 36%, and 18% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 50 pounds, 43 pounds, and 50 pounds, respectively.
At $1,475 per pound, the January 2020 Forward represents a premium of 2.7% relative to the current U.S. Spot Price of $1,437 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:
California
Average Number of Product Batches Subject to Required Testing Monthly from September to December Up About 30% Compared to Prior Three-Month Period, While Failure Rates Are Down
Colorado
Increases in Average Market Rates Set by Revenue Department Mean Adult-Use Cultivators Will See Larger Tax Burden on Internal Transfers in Q1
Oregon
Total Sales Decline in November for 3rd Straight Month, to About $67.5 Million, But Sales of Extracts & Concentrates Increase for 2nd Consecutive Month
Washington
State Lawmakers Acknowledge Product Shortages May Occur With Opening of Adult-Use Market in 2020