The U.S. Cannabis Spot Index increased 0.8% to $1,096 per pound.
In grams, the Spot price was $2.42.
The U.S. Spot wholesale cannabis price jumped $24 per pound this week on the back of gains in the Southwest, Midwest, and in legacy states.
Despite the current recovery in some legal wholesale cannabis markets, it’s fair to say that cannabis prices are headed lower due to oversupply in nearly every state and it pays to remember one of the tenets of legalizing adult use cannabis was to eradicate illicit sales. In order for that to happen, legal cannabis prices can’t just match the illicit market, they must trade under that market for a period of time to establish choosing legal cannabis as the norm. What this means for growers and retailers is lower prices for longer.
The current market shake-out is not unlike other industries in that a saturated market necessarily means businesses in established legal cannabis regions can only expand by taking market share from competitors or increasing consumer demand. Companies can increase market share by innovating, offering new products that competitors don’t sell, and by lowering prices to pull demand from legal and illicit competitors. The cannabis industry is still in its infancy where business turnover is expected as the market balances supply and demand in the legal and illicit markets.
July 2023 Implied Forward unchanged at $1,100 per pound.
At $1,100 per pound, the July 2023 Implied Forward represents a premium of 0.4% relative to the current U.S. Spot Price of $1,096 per pound.
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