The U.S. Cannabis Spot Index increased 0.7% to $956 per pound.
The simple average (non-volume weighted) price increased $22 to $1,257 per pound, with 68% of transactions (one standard deviation) in the $502 to $2,013 per pound range. The average reported deal size was nominally unchanged at 2.7 pounds. In grams, the Spot price was $2.11 and the simple average price was $2.77.
The relative frequency of transactions for indoor flower rose 1%, while that of greenhouse flower was unchanged this week. Outdoor flower transaction frequency fell 1%.
The relative volume of indoor product rose 2%, while that of greenhouse product fell 2%. Outdoor product’s relative volume was unchanged on the week.
The U.S. Spot cannabis price gained $6 this week behind a legacy state net of -$4 and amid rather large price dislocations across the country. Most notably, the New England spot net this week is – $464 per pound due to a massive price dislocation in Massachusetts, where price cratered by 22.7% in the week. For more on the Massachusetts price rout, see our analysis in this week’s Premium Report.
California spot fell $23 and continues to make new all-time lows in a market chronically oversupplied. Talk of growers turning in licenses has not made a dent in a state where both the legal and illicit markets are awash in inventory. Colorado spot prices fell another $13 this week and represents another all-time low in a state experiencing oversupply and waning demand. Oregon spot has managed to put together several weeks of gains amid the state’s second license moratorium and what locals describe as a “bloodbath” among cultivators. Sources indicate licenses are being turned in at a furious rate as growers look to get out from under debts incurred during the June 2021 to June 2022 price rout. The pace of spot losses in Washington State has shrunk, but week-to-week losses are still the norm with spot falling just $5 this week.
As legacy state outdoor flower prices steady between $300 and $450 per pound, the western cannabis markets may start seeing minor price gains in 2023. Price gains in the most inexpensive product category should help steady indoor and greenhouse prices next year as states continue to try different regulatory fixes to curb cultivation and illicit market activity.
January 2023 Implied Forward assessed down $15 to $960 per pound.
The average reported forward deal size was 77 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 46%, 41%, and 14% of forward arrangements, respectively.
The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 90 pounds, 69 pounds, and 58 pounds, respectively.
At $960 per pound, the January 2023 Implied Forward represents a premium of 0.4% relative to the current U.S. Spot Price of $956 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.
