The U.S. Cannabis Spot Index decreased 0.3% to $1,286 per pound.
The simple average (non-volume weighted) price decreased $3 to $1,632 per pound, with 68% of transactions (one standard deviation) in the $822 to $2,441 per pound range. The average reported deal size was nominally unchanged at 2.5 pounds. In grams, the Spot price was $2.84 and the simple average price was $3.60.
The relative frequency of transactions for indoor product rose 1%, that for deals for greenhouse product fell 1% and the relative frequency of outdoor transactions was unchanged this week.
The Cannabis Benchmarks U.S. Spot Index fell just $3.28 this week, to $1,286 per pound. The 20-week average change in the U.S. Spot is -$13.90 and this week’s departure from the average weekly change is significant. The Oregon Spot 20-week average move is -$16.70; this week Oregon Spot fell just $3.49 per pound. Likewise, in California, the 20-week average weekly change in spot prices is -$24.15; this week the state Spot Index is down $15.68. The average price change in Colorado for the past 20 weeks has been -$7.47; again, losses narrowed to just $4.64 per pound. Washington spot prices have been in a downtrend as well with the 20-week average weekly change at -$7.00. However, this week the Spot downtrend in Washington intensified, with price down $49.17 per pound.
As legacy state weekly average price changes narrow for the most part, the market may be undergoing a post harvest “clearing,” where growers sell into a falling market, but weekly price changes narrow. That is, as the market clears, prices start to stabilize; first by narrowing losses and then by building a base price by repeated sales of crops within a tight range. State spot markets will not “clear” all at once, as illustrated by Washington’s sharp negative departure from the average weekly change. Still, the 20-week average spot price change may be an early signal wholesale flower prices are set to stabilize, at least in the near term.
June 2022 Implied Forward initially assessed at $1,410 per pound.
The average reported forward deal size declined to 67 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 38%, 47%, and 15% of forward arrangements, respectively.
The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 100 pounds, 52 pounds, and 35 pounds, respectively.
At $1,350 per pound, the January 2022 Implied Forward represents a premium of 4.9% relative to the current U.S. Spot Price of $1,286 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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