The U.S. Cannabis Spot Index decreased 1.7% to $1,077 per pound.
In grams, the Spot price was $2.37.
The U.S. spot wholesale cannabis price fell $19 per pound this week as weakness across legacy markets, the Midwest, and Southwest outweighed gains made in New England.
California spot price slid $29 this week and Colorado spot fell $7 per pound. The Midwest slid $32 on the back of a $33 per wholesale pound price drop in Illinois. The Southwest Sand States netted -$23 per pound behind a $19 drop in Arizona spot and an $11 drop in Oklahoma spot price. New England states netted +$88 per pound on across-the-board gains.
It’s becoming clearer that newer states are undergoing a much faster reduction in wholesale cannabis prices than legacy states did at the outset of their markets. With the acceleration of the business cycle, the boom and bust of it all, business participants newer to the adult use market are likely to start thinking about investing in a piece of the supply chain instead of trying to own the entire chain.
In a matter of a few years time – and assuming interstate commerce is permitted – it is likely that there will be smaller crops and fewer growers in states with climates inhospitable to the plant, as well as more and better retail in those same states. Cannabis manufacturing might well move to states with low labor costs, while marketing and financialization will take place primarily in New York. Cannabis cultivation will start to center in states where climate and energy costs are conducive to the undertaking.
To get the economics of the cannabis industry right and sustainable and to eradicate illicit businesses, interstate trade must take place, otherwise investments in cannabis businesses will continue to flow toward states where long-term success is unlikely.
July 2023 Implied Forward unchanged at $1,100 per pound.
At $1,100 per pound, the July 2023 Implied Forward represents a premium of 2.1% relative to the current U.S. Spot Price of $1,077 per pound.
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May Adult Use Sales Hold Steady; Medical Sales Slide Slowly
Adult Use Sales Top Medical for First Time in May