The U.S. Cannabis Spot Index decreased 2.0% to $1,046 per pound.
In grams, the Spot price was $2.31.
The U.S. wholesale Spot Index fell $21 per pound this week as legacy states, the Northeast, and the Southwest Sand States saw prices slide to varying degrees. Legacy states netted -$9 per pound this week on little price movement across individual markets.
New England states are seeing more volatile price moves than legacy states as companies jockey for position in the region’s cheek-by-jowl marketplace. Massachusetts wholesale spot price fell $53 per pound this week and remains the lowest price in the region. Connecticut remains the highest-priced cannabis in the region, gaining $11 per wholesale pound and trading at an arbitrage-friendly premium to Massachusetts of $1,351 per wholesale pound.
The Sand States netted – $100 per pound this week. Nevada is the outlier in the region, trading at an $805 per pound premium to Arizona, the lowest-priced cannabis in the region.
Prices of like commodities converge over time. Legacy state prices might be considered nearly fully converged with the spread between lowest and highest at $138 per pound. Prior to the pandemic, the low-high spread in legacy states was typically around $500. Adult use markets in Maine and Massachusetts also went through the pandemic and likely drew the same conclusion that legacy state operators drew: pandemic pricing and demand would remain, thus justifying cultivation expansion. That turned out not to be true and Maine and Massachusetts prices have reflected oversupply and less demand post-pandemic. Other New England states’ prices will converge at lower levels due to market forces including price competition, supply, and demand.
July 2023 Implied Forward closes unchanged at $1,100 per pound.
At $1,100 per pound, the July 2023 Implied Forward represents a premium of 5.2% relative to the current U.S. Spot Price of $1,046 per pound.
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