U.S. Cannabis Spot Index up 1.5% to $1,647 per pound.
The simple average (non-volume weighted) price increased $63 to $1,863 per pound, with 68% of transactions (one standard deviation) in the $1,083 to $2,644 per pound range. The average reported deal size increased to 2.2 pounds. In grams, the Spot price was $3.63 and the simple average price was $4.11.
September sales data continues to show demand elevated well above pre-COVID levels. However, similar to August, there are also some signs that it may have reached, or at least be near, a current peak. Sales volume to patients in Arizona’s medical cannabis system declined for the second straight month in September. Adult-use sales in Illinois continued to climb, but growth has slowed in recent months after a big jump in July, although that may be due in part to still-developing production capacity and tight supply.
As record sales have strained supplies even in mature and previously well-supplied markets, new regulatory developments could add more costs for businesses, potentially applying further upward pressure on wholesale prices. Proposed rules in Oregon and Washington would enact new regulations around additives in vape products in the former state and implement required pesticide and heavy metals tests for products in the latter. Mandatory quality assurance and safety screenings of products will begin in Arizona’s market in November for the first time in the history of the state’s medical cannabis program.
November Forward up $15 to $1,560 per pound. The average reported forward deal size was nominally unchanged at 22 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 35%, 40%, and 25% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 24 pounds, 18 pounds, and 25 pounds, respectively.
At $1,560 per pound, the November Forward represents a discount of 5.3% relative to the current U.S. Spot Price of $1,647 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.