Cannabis Benchmarks weekly Report -- published august 11, 2017
The current U.S. Cannabis Spot Indices are assessed using transaction statistics from the following legal wholesale markets: Alaska, Arizona, California, Colorado, Connecticut, Washington D.C., Illinois, Massachusetts, Maine, Michigan, Nevada, New Hampshire, New Mexico, Oregon, Rhode Island, Vermont, and Washington.
U.S. Cannabis Spot Index down 4.8% to $1,556 per pound.
The simple average (non-volume weighted) price decreased $112 to $1,772 per pound, with 68% of transactions (one standard deviation) in the $1,054 to $2,490 per pound range. The average deal size increased 24.9% to 11.2 pounds from 9.0 pounds last week. In grams, the Spot price was $3.43, and the simple average price was $3.91.
Indoor-grown flower’s share of the total observed volume traded declined by 6% week-over-week, but such product still accounted for over half of all documented weight moved. Most of the corresponding increase in relative volume accrued to greenhouse flower, which made up over a third of all observed volume traded while constituting just over a quarter of all reported deals. Outdoor product’s influence on the national composite price increased slightly compared to last week.
Indoor flower spanned from $650 to $6,300 per pound; the median price was $1,950/lb.
Greenhouse flower spanned from $900 to $3,200 per pound; the median price was $1,305/lb.
Outdoor flower spanned from $500 to $1,800 per pound; the median price was $1,000/lb.
The U.S. Spot Index this week saw its most dramatic proportional movement in months, declining by almost 5%. Each individual grow type experienced a week-over-week drop in volume-weighted average rates, but the decrease in the composite price was driven primarily by an over 4% dip in rates for warehouse flower. Pricing for greenhouse product ticked downward slightly after being on the upswing for the prior two weeks.
New Mexico’s Spot Index fell below the $3,000 per pound threshold for the first time in recent memory. Oregon’s Spot dropped by almost $100 per pound for the second straight week.
Two new year-to-date low prices were observed this week. The national-level rate for indoor-grown flower dipped to $1,757 per pound; this week is only the second time this year that volume-weighted average pricing for such product has fallen below $1,800 per pound. In Oregon, outdoor flower tumbled into a new annual trough for the second consecutive week, falling to $875 per pound.
The table below illustrates the U.S. Spot Index, along with the volume weighted averages for all transactions accompanied by a medical or recreational / adult-use designation.
Wholesale rates for product in adult-use markets dipped sharply this week, falling by over 8%. The national-level drop can be attributed primarily to a roughly 7% decline in pricing in Oregon’s adult-use system, while Colorado’s also saw a small price decrease. Wholesale rates in Oregon were down overall, with pricing in its medical market falling as well. Although, a decline in California’s Spot Index was the main driver behind the nearly 3% downturn in national rates for product in medical markets.
September Forward unchanged at $1,550 per pound.
Forward arrangements represented nearly 6% of overall market activity this week. The average forward deal increased to 54.5 pounds, from 49 pounds last week. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 48%, 33%, and 19% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 58.5 pounds, 51.5 pounds, and 50 pounds, respectively.
At $1,550, the September Forward represents a discount of 0.4% relative to the current U.S. Spot Index of $1,556. The premium or discount for each forward price, relative to the U.S. Spot Index, is illustrated in the table below.
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Oregon’s Transaction Stats shifted significantly this week on a surge of greenhouse supply. The relative frequency of trades for such product jumped by 10% week-over-week, while the relative volume ballooned by over 20% to account for over half of all reported weight moved, up from just under a third last week. Small increases in the relative frequency of deals and relative volume of outdoor-grown flower meant that indoor product saw its influence on the state’s volume-weighted average shrink drastically. After making up almost two-thirds of all documented volume traded last week, the relative volume of warehouse flower shrank by 24% this week.
Oregon’s state Spot Index fell for the third consecutive week, declining by just over 5% to settle at $1,764 per pound. This week is the second consecutive one in which the composite volume-weighted average experienced a decrease of nearly $100 per pound. Despite pricing for indoor product jumping up over $2,200 per pound for the first time since late May, continually falling rates for the sun-fueled grow types - including a new year-to-date low price for outdoor flower - dragged down the state’s Spot.
The Oregon Medical Marijuana Program (OMMP) recently released its July “Statistical Snapshot,” which includes data through roughly Q2 of this year. The report shows that patient and grower numbers are holding relatively steady since the last update, while the number of medical-only dispensaries and processors continues to shrink.
Interestingly, the number of growers registered in the OMMP has held largely steady, with medical cultivators likely waiting for recently-passed legislation affecting the regulation of their activities to be implemented before making an ultimate decision as to whether to remain in the program. 33,351 medical cannabis growers were registered with the state as of July, down just over 1% from April’s numbers. The number of farmers registered with the OMMP is down 14.5% year-over-year; notably, though, the number of growers counted in April was down 22% year-over-year, emphasizing the fact that medical cultivator registrations stabilized somewhat in the previous quarter.
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11 August 2017. Copyright © 2017 New Leaf Data Services, LLC. All rights reserved