The U.S. Cannabis Spot Index decreased 2.3% to $987 per pound.
The simple average (non-volume weighted) price decreased $29 to $1,215 per pound, with 68% of transactions (one standard deviation) in the $529 to $1,901 per pound range. The average reported deal size increased to 2.7 pounds. In grams, the Spot price was $2.18 and the simple average price was $2.68.
The relative transaction frequency of indoor product fell 1%, while that of greenhouse product rose 1%. Outdoor transaction frequency was unchanged this week.
The relative volume of indoor product fell 1%, while that of greenhouse product rose 1%. Outdoor flower’s relative volume was unchanged on the week.
U.S. Spot market prices were mostly lower this week, with the weighted average spot index down $23. The national greenhouse flower price fell $12 to $763 per pound wholesale and indoor flower fell $34 to $1,231. Only the outdoor U.S. spot ticked up this week, gaining $26 to trade at $466 per pound. Recent price improvements are likely to be transitory with an increasing number of states undergoing price adjustments to the downside.
U.S. indoor spot price underwent a bit of a summer bump with price improving from the high $1,200s to the mid $1,300s per pound from early July to early August. With the end of summer, however, demand looks to have dropped with price again reaching an all-time low. Greenhouse product has similarly started back on a downward trend after trading up to the $800 per pound level in early August.
The outdoor price rise this week perhaps reflects new product coming to market. Cannabis Benchmarks contacts have noted fresh outdoor supply in the market beginning in August. Given the vast oversupply in outdoor product and the upcoming harvest season, prices are likely to remain under pressure, though that pressure may be relieved somewhat during the holiday season. It seems growers are generally aware the market is oversupplied but are loath to decrease crop size in any meaningful way.
Oregon, perhaps the most oversupplied market in the U.S., shows little sign of reigning in production. As we have covered recently, the state has implemented its second moratorium in the hope of reducing the number of licenses, with a knock-on effect of eventually lowering supply.
October 2022 Implied Forward unchanged at $995 per pound.
The average reported forward deal size was 74 pounds. The proportions of forward deals for outdoor, greenhouse, and indoor-grown flower were 52%, 34%, and 14% of forward arrangements, respectively.
The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 83 pounds, 64 pounds, and 64 pounds, respectively.
At $995 per pound, the October 2022 Implied Forward represents a premium of 0.8% relative to the current U.S. Spot Price of $987 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.