The U.S. Cannabis Spot Index decreased 3.3% to $986 per pound.
In grams, the Spot price was $2.17.
The U.S. Spot Index continued its recent slide this week, declining 3.3% to $986 per pound of wholesale domestic cannabis flower. This is the first time since mid-April that the national average wholesale price has settled under the $1,000 per pound threshold.
The overall national average was pulled down by a decline in the price for indoor-grown flower. The downturn in wholesale prices for warehouse-grown product comes amidst a heatwave that is impacting much of the Continental U.S., raising HVAC costs for indoor cultivators and sometimes causing lower yields and / or product quality when climate control systems cannot keep up or fail.
National prices for greenhouse and outdoor-grown flower have generally trended upward from early this year, perhaps reflecting contracting supply due to grower attrition or pullbacks in production capacity. Late summer should bring light-deprivation crops to market. Freshly harvested product frequently sees a price bump relative to rates for crops cut down the prior year, an effect that may be accentuated this summer and early fall if reports of growers downsizing or exiting are borne out.
From a regional perspective, much of the national decrease in wholesale flower prices was driven by price erosion in the West Coast markets. Oregon’s Spot price continues to see the most pronounced sell-off of the group. With reports of growers exiting the market voluntarily or closing up shop under duress, falling prices may be reflective of inventory being liquidated to satisfy accounts payable, creditors, and tax collectors. Cultivators in Oregon have spoken out recently of struggles to pass new required testing for aspergillus and downward pressure on prices could also reflect lower rates for flower that failed testing, but was “remediated.”
August 2023 Implied Forward assessed down $25 to $1,050 per pound.
At $1,050 per pound, the August 2023 Implied Forward represents a premium of 6.4% relative to the current U.S. Spot Price of $986 per pound.
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