cannabis benchmarks weekly report -- published august 4, 2017
U.S. Cannabis Spot Index up 0.5% to $1,635 per pound.
The simple average (non-volume weighted) price decreased $2 to $1,884 per pound, with 68% of transactions (one standard deviation) in the $1,054 to $2,715 per pound range. The average deal size increased 11.1% to 9.0 pounds from 8.1 pounds last week. In grams, the Spot price was $3.60, and the simple average price was $4.15.
After the relative volume of greenhouse product declined over the course of the prior two weeks, the supply mix at the national level was unchanged this week. The only change in overall Transaction Statistics was a roughly 2% week-over-week increase in the relative frequency of trades for outdoor-grown product, which resulted in a corresponding decline in that metric for warehouse flower. Average deal sizes for outdoor product contracted significantly this week, as shown in the table below.
Indoor flower spanned from $650 to $6,400 per pound; the median price was $2,000/lb.
Greenhouse flower spanned from $1,000 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 was largely steady this week, rising by just half a percent to settle at $1,635 per pound. A small decline in the volume-weighted average rate for indoor flower was offset by a slightly larger increase in pricing for greenhouse product, which was less prevalent in our observations. Rates for field-grown flower experienced a notable uptick, but accounted for just over a tenth of the total observed volume traded, marginalizing its impact on the composite price.
Stability in national and state-level wholesale rates means that observations of pricing extremes continue to be rare. This week, only outdoor flower in Oregon and greenhouse product in Washington State dropped to year-to-date lows of $940 and $1,260 per pound, respectively. No new annual high prices were observed this week.
Nevada’s state Spot Index fell by over $150 this week after seeing a sharp spike last week. Oregon’s composite price dipped below $1,900 per pound for the first time in six weeks.
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 over the course of the previous month, rates for flower in medical and adult-use markets diverged this week, with the former commanding a premium of $141 over the latter. The small decline in wholesale pricing in adult-use markets was driven by falling rates in Oregon and Washington State. Meanwhile, after tracking at virtually the same level in recent weeks, volume-weighted average prices for adult-use product in Colorado ticked upward this week in defiance of national trends. Whereas medical flower in Colorado commanded a premium of $5 over adult-use product last week, this week the latter’s rate settled $24 above that of the former.
February 2018 Forward assessed at $1,570 per pound.
Forward arrangements represented nearly 7% of overall market activity this week. The average forward deal increased to 49 pounds, from 45 pounds last week. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 31%, 46%, and 23% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 39 pounds, 59 pounds, and 42 pounds, respectively.
The U.S. Spot Index average increased 4.7% from December 2015 to January 2016. The average increased 3.8% over the same period a year later. With greater uncertainty surrounding the ultimate disposition of both legal and illicit supplies in California, and other western markets, the January 2018 Forward is currently 5.5% higher than the December 2017 Forward, despite the potential for some new recreational sales at the beginning of the new year. While the average experienced a 2.5% increase from January 2017 to February 2017, expectations for lingering uncertainty are limiting expected increases to 1.6% during the same period in 2018.
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California Transaction Stats continued to show stability this week, with a 5% decline in the relative frequency of trades for indoor product the largest week-over-week shift. The corresponding increase was split relatively evenly between the two sun-fueled grow types. Meanwhile, outdoor-grown flower’s share of the total observed weight moved increased, but by just 1%, resulting in a decline of the same proportion in the relative volume of warehouse product. Average deal sizes for outdoor flower shrank by almost 10 pounds compared to last week, while those for indoor product swelled by just over a pound. Greenhouse flower’s average deal size contracted by 1.5 pounds week-over-week.
California’s Spot Index saw its second consecutive week of modestly-rising rates, ticking upward by 1% this week to settle at $1,590 per pound. Increases in the volume-weighted average prices for greenhouse and outdoor flower drove the rise in the state’s composite rate, which is still down almost 8% from its year-to-date high of $1,724 per pound, observed just over a month ago.
Despite the fact that pricing for field-grown product increased by over 13% week-over-week, several lots of such flower - harvested last year - were reported to have been moved for very low rates, specifically between $500 - $750 per pound. However, none of the aforementioned deals were for volumes greater than 50 pounds, resulting in them lacking significant influence on the volume-weighted average rate for that grow type, as well as the overall state Spot.
Warehouse-grown flower was the only grow type in California to see a dip in its volume-weighted average pricing, falling by 1.4% to settle at $1,781 per pound. Rates for indoor product have been on a slow but steady decline for almost a month after cresting recently in mid-July at $1,884 per pound. This week is the first time that pricing for warehouse flower has dipped below the $1,800 per pound threshold since the week ending June 2nd. This week’s rate is also below the average price for such product to this point in the year, which is $1,819 per pound. It is likely that a summer greenhouse harvests are putting downward pricing pressure on rates for indoor flower.
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4 August 2017. Copyright © 2017 New Leaf Data Services, LLC. All rights reserved