May 24, 2019

U.S. Cannabis Spot Index — May 24, 2019

U.S. Cannabis Spot Index — Published May 24, 2019

U.S. Cannabis Spot Index up 6.5% to $1,196 per pound.


The simple average (non-volume weighted) price increased $78 to $1,314 per pound, with 68% of transactions (one standard deviation) in the $556 to $2,072 per pound range. The average reported deal size decreased nearly 15% to 2.8 pounds from 3.3 pounds last week. In grams, the Spot price was $2.64 and the simple average price was $2.90.


The relative frequency of trades for outdoor flower decreased by 3% week-over-week. The relative frequency of transactions involving indoor and greenhouse product both increased, by 1% and 2%, respectively. Outdoor product’s share of the total documented weight moved nationally contracted by 10% this week. The relative volumes of warehouse and greenhouse flower expanded by 5% each compared to last week.


The U.S. Spot Index rose by 6.5% this week to settle at $1,196 per pound, a new year-to-date high and the first time that the national price observed in the opening week of this year has been exceeded. Significant increases in the Spot Indices of California and Oregon were the primary drivers of the uptick in the national rate. Perhaps just as influential, though, was a contraction in the relative volume of outdoor flower. Wholesale buyers in Oregon continue to state that much of what is on offer is undesirable. Additionally, licensed growers in California are becoming fewer, while more are required to employ the state’s track-and-trace system, theoretically reducing the porousness of the state’s licensed market to unlicensed production.   

The national volume-weighted price for flower to be sold in adult-use markets jumped this week on notable increases in California and Oregon. Rising prices in Nevada’s market also provided upward pressure on the U.S. rate for product designated as recreational.


Prices for medical flower were up this week on rising rates in California, Colorado, Arizona, Michigan, and Connecticut.  

June Forward up $40 at $1,075 per pound.


The average reported forward deal size was 44 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 55%, 30%, and 15% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 39 pounds, 49 pounds, and 51 pounds, respectively.


Monthly Implied Forward Prices for June through October increased this week. Trends in cultivation licensing in California, the country’s largest legal cannabis market, are leading to fewer permitted operators overall, as we discussed in detail in last week’s report.


Meanwhile, those California growers that are able to gain annual or provisional licenses are required to use the state’s track-and-trace system, leading to the regulated market becoming increasingly closed off to unlicensed production. Reports from the field indicate that this should tighten supply progressively, at least until the fall harvest.


At $1,075 per pound, the June Forward represents a discount of 10.1% relative to the current U.S. Spot Price of $1,196 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample Headlines From This Week’s Premium Report:

  • California

  • State Spot Index Ascends to Highest Point Since January, As Volume-Weighted Price for Outdoor Flower Reaches New Annual Peak
  • Colorado

    Overall Stability in Wholesale Pricing Observed in Nation’s Most Mature Market This Year, But Modest Downward Trend Has Developed in Recent Weeks

  • Oregon

  • State Spot Index Jumps to Settle Just Below Current Year-to-Date High
  • Washington

  • Bill That Would Have Allowed Business Owners to Hold More Licenses and Permitted Some Out-of-State Investment Did Not Pass This Year
  • Illinois

  • Retail Demand in April Up 81% Year-Over-Year, Yet Wholesale Prices Fell for the First Time in 2019

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Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

24 May 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved