cannabis benchmarks weekly report -- published august 18, 2017
U.S. Cannabis Spot Index down 1.6% to $1,531 per pound.
The simple average (non-volume weighted) price decreased $114 to $1,658 per pound, with 68% of transactions (one standard deviation) in the $1,067 to $2,249 per pound range. The average deal size decreased 26.6% to 8.2 pounds from 11.2 pounds last week. In grams, the Spot price was $3.37, and the simple average price was $3.66.
Indoor product’s share of the total observed weight moved continued to shrink this week and accounted for just under half of the reported volume traded. Just like last week, greenhouse product was the beneficiary of the corresponding increase; such flower saw its relative volume swell by 3% week-over-week. The relative frequency of transactions for greenhouse product also increased, by 8%. The relative frequency of trades and relative volume of outdoor flower were virtually identical to last week.
Indoor flower spanned from $999 to $5,208 per pound; the median price was $1,800lb.
Greenhouse flower spanned from $800 to $2,700 per pound; the median price was $1,305/lb.
Outdoor flower spanned from $700 to $1,775 per pound; the median price was $1,000/lb.
The U.S. Spot Index declined for the second consecutive week, by less than 2%, to just above $1,525 per pound. Despite the relatively modest decrease, this week’s national composite price is a new annual low. The overall decline in the overall volume-weighted average was driven by falling rates for each individual grow type, with outdoor flower experiencing the largest proportional decrease, while greenhouse product pricing was nearly flat week-over-week.
The roughly one dozen medical cannabis licensees that have managed to become operational in Massachusetts have been seeing wholesale rates above $3,000 per pound recently.
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.
After converging in late July, wholesale rates for product sold in medical and adult-use markets has diverged in recent weeks, with the former commanding a premium of $253 over the latter this week. The overall volume-weighted average price for adult-use flower was dragged down primarily by low-priced transactions in Colorado accounting for a greater proportion of observed trading compared to last week. Wholesale rates in Colorado and Oregon’s adult-use markets were both up compared to the week prior. California’s Spot price was flat week-over-week, doing much to maintain the steadiness displayed by the national rate for medical product.
September Forward unchanged at $1,550 per pound.
Forward arrangements represented nearly 6% of overall market activity this week. The average forward deal decreased to 47 pounds, from 54.5 pounds last week. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 32%, 40%, and 28% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 60 pounds, 47.5 pounds, and 33 pounds, respectively.
At $1,550, the September Forward represents a premium of 1.2% relative to the current U.S. Spot Index of $1,531. The premium or discount for each forward price, relative to the U.S. Spot Index, is illustrated in the table below.
Sample content from this week's Premium Report:
The Colorado Department of Revenue (CDOR) last week released data on taxes collected from the state’s legal cannabis markets in July, which correspond generally to retail and wholesale sales made in June. According to an analysis of the retail tax receipt data by The Cannabist, combined sales in Colorado’s medical and adult-use markets in June amounted to about $131.65 million, slightly less than the current all-time monthly record of $131.69 million, set in March of this year. June’s retail sales are up 3.5% compared to the $127.2 million worth of product sold to patients and general consumers in May. The Cannabist report notes that, through the first six months of 2017, total cannabis sales in the state are up 25.7% year-over-year.
Oregon is expecting to receive about a million out-of-state visitors hoping to get a glimpse of the total solar eclipse that will take place on Monday, August 21st, according to a report from Oregon Public Broadcasting. The report notes that some cannabis retailers are already reporting a jump in sales - from both general summer tourism and that specific to the eclipse - while others expect sales to pick up as the event draws closer. The path of the eclipse includes cities such as Salem and Corvalis. Portland lies just to the north of the eclipse’s path, while Eugene and Bend are not far to the south of it.
Luckily for outdoor growers, the few minutes during which the sun is obscured by the moon will not affect the flowering process of their crops, apart from depriving them of a negligible amount of photons that they may have otherwise received. According to a recent Seasonal Climate Forecast Verification from the Oregon Departments of Agriculture (ODA) and Forestry (ODF), late spring and early summer have for the most part treated farmers favorably, although generally below-average precipitation in south-central Oregon - in May and July particularly - means that additional irrigation was likely necessary to sustain crops in those months. Though we noted record high temperatures that baked Oregon earlier this month, the period from May through July did not see extreme heat, but was somewhat warmer than is typical.
Overall to this point, Oregon’s outdoor growing season appears to have been generally amenable to cannabis farmers. However, we are now entering the critical period in the cultivation of full-term crops, in which buds are blooming and plants therefore become more susceptible to pests, disease, and dramatic environmental fluctuations, due to the fact that much of their energy is devoted to flower development. Regardless, though, the fact that growers licensed in the state’s adult-use system are this year significantly more numerous than they were last year, in addition to having a full season - the first licenses for cultivators were not issued until May last year - this fall’s outdoor crop should provide substantially more supply than that of the year prior.
Sample headlines from this week's Premium Report:
18 August 2017. Copyright © 2017 New Leaf Data Services, LLC. All rights reserved