May 1, 2020

U.S. Cannabis Spot Index — May 1, 2020

U.S. Cannabis Spot Index — Published May 1, 2020

U.S. Cannabis Spot Index down 2.5% to $1,334 per pound.


The simple average (non-volume weighted) price decreased $41 to $1,547 per pound, with 68% of transactions (one standard deviation) in the $821 to $2,272 per pound range. The average reported deal size was nominally unchanged at 2.3 pounds. In grams, the Spot price was $2.94 and the simple average price was $3.41.


The relative frequency of trades for outdoor flower increased by 2% this week. The relative frequency of deals for greenhouse product decreased by the same proportion, while that for indoor flower was unchanged. 



Outdoor flower’s share of the total reported weight moved expanded by 2% this week. The relative volumes of warehouse and greenhouse product each contracted by 1%.

This week, Colorado became the first state with a major legal cannabis market to loosen its stay-at-home order, offering a glimpse of what businesses and consumers might expect in the weeks and months to come as other states and municipalities follow suit. One thing that has become clear over the past month or so that stay-at-home orders have been in place across the country is that resumptions in economic activity will be gradual processes; it will not be like flicking a switch. 


One significant item to consider is that major metropolitan areas, which are often home to disproportionately large amounts of cannabis commerce in states with legalization, will likely keep restrictions in place for longer than states as a whole. For example, Colorado Governor Jared Polis allowed the state’s “Stay-at-Home” order to lapse on Monday, April 27, and replaced it with a less stringent “Safer-at-Home” order. However, on Friday, April 24, Denver Mayor Michael Hancock extended the city’s stay-at-home order through May 8. Several other counties in the Denver metropolitan area also extended stay-at-home orders to May 8, as did Boulder County.


In anticipation of Polis letting the state’s stay-at-home order lapse, the Colorado Marijuana Enforcement Division (MED) issued a bulletin to licensees. Overall, MED instructed licensees that a previous bulletin outlining COVID-19 protocols for cannabis businesses remains in effect. MED said it will provide updates on any changes pursuant to new executive orders. However, even in local jurisdictions that are moving to the state’s “Safer-at-Home” order, the operational constraints placed on cannabis retailers by officials in response to COVID-19 did not change. Polis has also stated that he expects that some social distancing and other protocols will persist for some time, likely months, even under loosened restrictions. 


Still, from the perspective of this writer, Colorado’s shift from “Stay-at-Home” to “Safer-at-Home” has resulted generally in increased amounts of people in Denver leaving their homes for various reasons, which could conceivably increase traffic at licensed cannabis retailers. Additionally, beginning Monday, May 4, offices that had been compelled to shift to remote working will be permitted to bring back some staff, provided that guidelines are followed, which should result in more people out and about. While the operational constraints to which Colorado cannabis businesses have been subject will not immediately change, retailers may see additional customers who previously opted to follow the stay-at-home order. 


Nevada, on the other hand, offers a different scenario. We have pointed out that Nevada Governor Steve Sisolak ordered the state’s cannabis retailers to move to sales via delivery only in late March. Additionally, with hotels and casinos closed, and Las Vegas tourism essentially non-existent, sales have reportedly slowed considerably, though official data for March and April is not yet available. (Below, we discuss February sales in Nevada, which saw a pronounced and unexpected month-over-month decline.)


This week, Sisolak announced on Twitter that most of Nevada’s “Stay at Home” measures will be extended through mid-May. However, today, May 1, a new order will relax restrictions on some businesses, including licensed cannabis retailers. Beginning today, cannabis retailers will be able to make sales “curbside,” offering another avenue by which transactions can be carried out. Yet, Nevada’s consumer base remains limited to in-state residents. A report on the changes from the Nevada Appeal notes, “[Sisolak] said the opening of Las Vegas casinos likely won’t happen until the third or fourth phase of his gradual reopening plan, but he has not released any more details or timeline.”   


A return to normalcy in the Nevada cannabis industry is contingent on a full reopening of Las Vegas and its various tourist attractions and amenities. Similar sentiments can be applied to markets such as Denver, which typically sees sales rise through the summer to peak in August or September, with help from purchases made by tourists to Colorado. However, as we ruminate on below, in the Forward Curve commentary, gradual easing of restrictions, along with the possibility of a second wave of infections, could make for unexpected shifts in demand that vary state-to-state.

November Forward initially assessed at $1,375 per pound.


The average reported forward deal size was nearly 37 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 46%, 37%, and 17% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 43 pounds, 29 pounds, and 36 pounds, respectively.


At $1,425 per pound, the June Forward represents a premium of 6.8% relative to the current U.S. Spot Price of $1,334 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:


New Research Examines Cost of Product Testing in Legal Market


Governor Loosens Stay-at-Home Order, but Operational Restrictions on Cannabis Businesses Remain in Place



  • February Sales Dive by Over 20% MoM, Even Before COVID-Motivated Shift to Only Delivery Sales in Late March
  • Retailers Now Permitted to Offer “Curbside” Sales in Addition to Delivery



State Data Shows Production by Adult-Use Cultivators Continuing Steadily Since Retailers Forced to Close; Recreational Sales Remain Suspended Until at Least May 18

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1 May 2020.  Copyright © 2020 New Leaf Data Services, LLC.  All rights reserved