The U.S. Cannabis Spot Index increased 6.4% to $1,025 per pound.
In grams, the Spot price was $2.26.
Despite the U.S. Spot Index falling through the $950 per pound level and establishing new historic lows earlier this month, the national volume-weighted average price for wholesale cannabis flower turned upward in the past two weeks, rising this week to settle up year-on-year for the first time since July 7.
We’ve noted in recent weeks that, from roughly the second half of 2022 to the present, wholesale flower prices have stabilized and begun to fall back into less volatile, more traditional seasonal patterns. Even this week’s price movement is not necessarily a break from prior trends. We have in previous years observed a brief jump in wholesale prices in the early stages of the harvest season, as fresher product comes to market. In 2022, the U.S. Spot climbed from the final week of September into late October, for example.
However, the underlying drivers of this year’s late September price bump are different. Wholesale prices for greenhouse and outdoor-grown flower have continued the decline that began in July, while the recent rise in the overall national wholesale price is due to climbing rates for indoor-grown product.
California and Nevada saw some of the more significant increases in prices for indoor flower this week, with smaller gains seen in Colorado, Washington, and Michigan. We’ve noted contracting production and tightening overall supply in some of the larger markets just mentioned; namely, California, Colorado, and Michigan.
Additionally, the increasing prevalence of flower being sold at wholesale pre-packaged, rather than in bulk, is currently working to push up the price for indoor flower and the U.S. Spot. Fewer and fewer retailers are engaging in the “deli style” model in which bulk flower is weighed out when purchased and are instead stocking pre-packaged eighths, quarters, half-ounces, and ounces in order to increase efficiency and better control inventory. Unsurprisingly, pre-packaged flower typically commands a premium wholesale price relative to bulk product due to the increased costs and materials that come with it.
October 2023 Implied Forward assessed up $40 to close at $950 per pound.
At $950 per pound, the October 2023 Implied Forward represents a discount of 7.3% relative to the current U.S. Spot Price of $1,025 per pound.
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