The U.S. Cannabis Spot Index decreased 4.1% to $1,068 per pound.
The simple average (non-volume weighted) price decreased $32 to $1,362 per pound, with 68% of transactions (one standard deviation) in the $593 to $2,131 per pound range. The average reported deal size increased to 2.6 pounds. In grams, the Spot price was $2.35 and the simple average price was $3.00.
The relative transaction frequency of indoor product was unchanged this week, that of greenhouse fell 1%, and that of outdoor product rose 1%.
The relative volume of indoor flower rose 2%, that of greenhouse flower fell 3%, and that of outdoor flower rose 1%.
U.S. Spot price fell $46 this week to $1,068 per pound on the back of net losses of $24 per pound in legacy states. Oregon fell $26 and Washington State was off $11, against gains of $5 in California and $7 in Colorado.
Adding to the pressure on Cannabis Benchmarks U.S. Spot Index are losses in Illinois of $67 per pound, a $45 loss in Michigan, a $41 decline in Arizona, a $25 decrease in Oklahoma, and a $46 slide in New Mexico.
It remains to be seen if Illinois spot retraces the entire gain from Spring 2020, when spot traded from $3,250 up to $3,900 per pound as the pandemic took hold. Given the state is dominated by a small number of very large growers, there may be an attempt to hold the line near current price, but the technical and statistical outlook suggests a retest of the $3,200 level is in the cards.
Michigan spot is trading up nearly $300 from an all-time low in early May 2022, even as the odds of ever seeing the high $2,700s again shrink against an uncapped licensing scheme and the likelihood of an ever-larger outdoor crop.
Oklahoma prices are also weighed down by the state’s massive number of cultivation licenses – a situation the state is addressing with a license moratorium beginning in August 2022.
New Mexico prices remain in a broad uptrend; price has softened within the trend. New Mexico greenhouse-grown product has been bid up as indoor-grown prices remained out of reach for many small retailers. The indoor / greenhouse spread is at $52 this week, versus $511 in April 2022 when the adult use market opened.
Alaska spot has put together five weeks of gains and is trading at nearly $2,300 per pound.
Massachusetts spot ticked up $48 per pound this week. A turnaround from current levels can only be achieved if the market can put together weeks or even months of incremental gains and avoid breaking below the all-time low set last week.
July 2022 Implied Forward assessed down $70 to $1,145 per pound.
The average reported forward deal size was 87 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 45%, 37%, and 18% of forward arrangements, respectively.
The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 90 pounds, 88 pounds, and 67 pounds, respectively.
At $1,145 per pound, the July 2022 Implied Forward represents a premium of 7.2% relative to the current U.S. Spot Price of $1,068 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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