January 17, 2020

U.S. Cannabis Spot Index — January 24, 2020

U.S. Cannabis Spot Index — Published January 24, 2020

U.S. Cannabis Spot Index up 3.0% to $1,443 per pound.

 

The simple average (non-volume weighted) price increased $44 to $1,623 per pound, with 68% of transactions (one standard deviation) in the $898 to $2,348 per pound range. The average reported deal size declined to 1.9 pounds. In grams, the Spot price was $3.18 and the simple average price was $3.58.

 

The relative frequency of trades for indoor flower decreased by almost 3% this week. The relative frequencies of deals for greenhouse and outdoor product increased by about 2% and 1%, respectively.

 

Outdoor flower’s share of the total reported weight moved nationally contracted by 3% this week. The relative volumes of warehouse and greenhouse product expanded by 1% and 2%, respectively.

The U.S. Spot Index rose by 3% this week to settle at $1,443 per pound. Yet the current overall trend of the national composite price remains a fairly modest downward slide, driven primarily by such price movement in California and Colorado, the country’s two largest markets. Additionally, while still holding stable overall, the trend line of Oregon’s Spot exhibited a slight decline this week.

 

On the West Coast, indoor growers are currently enjoying elevated rates for their produce. Prices for warehouse-grown flower in California, Oregon, and Washington State all rose this week and settled above their 2019 peaks. In the Pacific Northwest states, rates for outdoor product documented so far this month are elevated compared to those observed in December, while prices for such flower in California have declined in the opening weeks of 2020.

 

 

The new adult-use markets of Illinois and Michigan continue to experience tight supply and high wholesale flower prices. However, Massachusetts’ Spot Index this week vaulted above its 2019 peak and is the highest in the country by a significant measure. This week’s Massachusetts Spot is up 19% year-over-year. Last year at this time, the state’s adult-use market was just two months old and consisted of only a handful of retailers. Now, with over 30 shops authorized to sell to general consumers, it seems demand has grown and is putting pressure on cultivators to keep up. Similar scenarios could play out in Illinois and Michigan; wholesale price peaks may be some months down the road if retail access and demand growth continues to outpace supply.

Prices for both adult-use and medical flower climbed in all three of the states with the newest recreational markets.

 

  • Illinois 

    • Adult-use: $3,041 per pound, up 0.4% from last week.

    • Medical: $3,096 per pound, up 7.2% from last week.  

  • Massachusetts

    • Adult-use: $3,538 per pound, up 5.2% from last week.

    • Medical: $3,418, up 0.9% from last week.  

  • Michigan 

    • Adult-use: $3,490 per pound, up 0.4% from last week. 

    • Medical: $2,553, up 1.9% from last week. 

     

February Forward unchanged at $1,450 per pound.

 

The average reported forward deal size was 42 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 47%, 39%, and 14% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 49 pounds, 32 pounds, and 41 pounds, respectively.

 

At $1,450 per pound, the February Forward represents a premium of 0.5% relative to the current U.S. Spot Price of $1,443 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

Wholesale Flower Designated as Adult-Use Commanded Premium of Almost 25% Over Medical Product in 2019

 

Oregon

Retail Sales Grew 23% YoY in 2019; Market Trends Suggest Even Larger Revenue Expansion Possible in 2020

 

Washington

Monthly Sales Stabilized in Second Half of 2019 at Just Under $100 Million, as YTD Total through November Tops $1 Billion

 

Massachusetts

State Spot Index Surpasses $3,475 Per Pound, Higher Than Newer Recreational Markets in Illinois and Michigan

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

24 January 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved