U.S. Cannabis Spot Index up 1.5% to $1,251 per pound.
The simple average (non-volume weighted) price increased $42 to $1,431 per pound, with 68% of transactions (one standard deviation) in the $617 to $2,246 per pound range. The average reported deal size declined to 2.6 pounds from 2.8 pounds last week. In grams, the Spot price was $2.76 and the simple average price was $3.16.
The relative frequency of trades for indoor flower increased by over 1% week-over-week. The relative frequency of transactions involving greenhouse product decreased by the same proportion, while that for deals for outdoor flower was unchanged. Greenhouse flower’s share of the total documented weight moved nationally expanded by almost 5% this week. The relative volumes of warehouse and outdoor product contracted by about 4% and 1%, respectively, compared to last week.
The U.S. Spot Index rose by 1.5% this week to settle at $1,251 per pound, establishing a new year-to-date peak for the third consecutive week. Additionally, this week is the first time in 2019 that the national composite price has been up relative to a year ago, when it settled at $1,237 per pound in the opening week of June. While the large adult-use markets have garnered much of our attention, numerous medical markets – such as in Illinois, Rhode Island, and Connecticut – have seen growing patient counts and demand push up wholesale rates. Meanwhile, prices have also been on the rise in other mid-sized markets such as Massachusetts, Michigan, and Maine, due to the opening of adult-use sales in the former case and the implementation of new regulatory structures in the latter two.
The national volume-weighted price for flower to be sold to general consumers jumped this week on increases in every functioning adult-use market except for Colorado. Prices for medical flower were up slightly this week. Declines in California and Arizona dampened increases observed in every other medical market covered in our reporting.
December Forward initially assessed at $1,065 per pound.
The average reported forward deal size was 47 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 56%, 29%, and 15% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 41 pounds, 51 pounds, and 65 pounds, respectively.
Implied Forward Prices for July and August have been assessed upward, as can be seen in the table below. Historical sales trends in the more mature adult-use markets show that demand increases as the summer months wear on. Furthermore, wholesale buyers in Oregon and Washington have recently begun to show a willingness to pay higher prices, perhaps due to crops harvested in previous years losing their appeal. Finally, California’s supply chain appears to be undergoing a turbulent period and is losing production capacity, but the market landscape could settle by late summer or early autumn.
At $1,125 per pound, the July Forward represents a discount of 10.1% relative to the current U.S. Spot Price of $1,251 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:
Wholesale Prices Trending Downward Gradually, as Other Major Adult-Use Markets See Upticks in Rates