The U.S. Cannabis Spot Index decreased 2.4% to $1,003 per pound.
The simple average (non-volume weighted) price decreased $11 to $1,270 per pound, with 68% of transactions (one standard deviation) in the $543 to $1,997 per pound range. The average reported deal size was nominally unchanged at 2.5 pounds. In grams, the Spot price was $2.21 and the simple average price was $2.80.
The relative transaction frequency of indoor product rose 1% this week, while that of greenhouse flower fell 1%. Outdoor transaction frequency was unchanged in the week.
The relative volume of indoor product rose 1%, while that of greenhouse flower fell 2%. Outdoor flower’s relative volume rose 1%
The Cannabis Benchmarks U.S. Spot Index fell to a new all-time low this week at $1,003 per pound wholesale, taking out the previous all-time low of $1,007, made just two weeks ago. For some perspective on the market, one must cast back to 2019, pre-COVID, a period in which the market was in a strong, though restrained uptrend. The 2019 spot rally peaked in February 2020 at $1,459 per pound wholesale.
The Spot Index showed little variability through the onset of COVID, trading in a $135 range bounded by the February high and the May 2020 low of $1,322, after which price took off as the pandemic economic math took over: Unemployment plus government subsidies compounded by nothing but free time equaled a cannabis price rally. The Spot Index’s pandemic price peak came in late October 2020 at $1,665 per pound. Starting in October 2020, price stayed within a $188 range through August 2021, when the market topped out at $1,610. Since August 2021 the spot market has lost 37.7% of its value.
March 2023 Implied Forward initially assessed at $1,015 per pound.
The average reported forward deal size was 74 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 54%, 32%, and 14% of forward arrangements, respectively.
The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 82 pounds, 65 pounds, and 64 pounds, respectively.
At $995 per pound, the October 2022 Implied Forward represents a discount of 0.8% relative to the current U.S. Spot Price of $1,003 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.