U.S. Cannabis Spot Index up 0.4% to $1,571 per pound.
The simple average (non-volume weighted) price increased $36 to $1,798 per pound, with 68% of transactions (one standard deviation) in the $1,027 to $2,568 per pound range. The average reported deal size was 2.3 pounds. In grams, the Spot price was $3.46 and the simple average price was $3.96.
The relative frequency of transactions for greenhouse flower increased by 2% this week. The relative frequencies of deals for indoor and outdoor product contracted by 1% each.
The relative volume of greenhouse flower expanded by 1% this week. That for outdoor product contracted correspondingly, while the relative volume of warehouse flower was unchanged.
Prior to this week, the recent upward trend of the U.S. Spot Index has been driven primarily by rising wholesale flower prices in California, which is by far the country’s largest market. Apart from Nevada, rates for flower in other large state cannabis markets in the western U.S. have been observed to be relatively stable or trending down. Additionally, Michigan’s state Spot price is on the downswing as production continues to expand. Similarly, composite prices in Illinois and Massachusetts are down compared to the end of 2020.
In this week’s Premium Report, we detail tax collection data that shows the large expansion that took place in the Golden State’s licensed system in 2020. Interestingly, the data shows that less product entered the state’s wholesale market in Q4 than in Q3 2020, despite the autumn harvest taking place in the final quarter of the year.
Whether this observation reflects a smaller outdoor crop remains to be seen; 2021 data has not yet been made available. Last year’s harvest may have been slow to be sold into the regulated market, as tax data indicates that demand in California subsided in Q4 2020 as well. In previous reports, we noted that accounts from market participants suggested that the state’s fall crop was largely spared from the record-setting wildfires that burned parts of the Emerald Triangle. In Oregon, growers collectively posted record-setting harvest numbers despite facing the same adversity and wholesale flower prices have begun to trend upward slightly in recent weeks.
June 2021 Implied Forward unchanged at $1,585 per pound.
The average reported forward deal size was 52.1 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 54%, 33%, and 13% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 65 pounds, 41 pounds, and 27 pounds, respectively.
At $1,585 per pound, the June Implied Forward represents a premium of 0.9% relative to the current U.S. Spot Price of $1,571 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.
California
State Cannabis Tax Collections Increased 63% from 2019 to 2020
Colorado
Total Year-to-Date Sales Through March Up 28% Compared to Q1 2020, Outpacing Last Year’s Accelerated Growth During COVID
Arizona
Sales Volume of Concentrates, Extracts in Medical Market Continued to Grow in April as Other Product Categories Saw Declines
Oklahoma
March’s Medical Cannabis Sales Rise to Over $89M as Patient Count Has Plateaued and Declined Slightly in Recent Months