cannabis benchmarks weekly report -- published december 1, 2017
U.S. Cannabis Spot Index down 1.4% to $1,373 per pound.
The simple average (non-volume weighted) price decreased $46 to $1,675 per pound, with 68% of transactions (one standard deviation) in the $949 to $2,401 per pound range. The average deal size decreased 22% to 11.2 pounds from 14.4 pounds last week. In grams, the Spot price was $3.03, and the simple average price was $3.69.
Just like last week, only minor changes in the relative volumes of each grow type were reported this week. Both indoor and outdoor product experienced slight increases in their shares of the total observed weight moved, while that of greenhouse flower saw a modest decline. The relative frequency of trades involving warehouse and outdoor-grown product both swelled, by about 6% and 2%, respectively, resulting in a corresponding decline in that metric for greenhouse flower.
Indoor flower spanned from $800 to $5,400 per pound; the median price was $1,700/lb.
Greenhouse flower spanned from $800 to $3,000 per pound; the median price was $1,200/lb.
Outdoor flower spanned from $400 to $2,500 per pound; the median price was $900/lb.
The U.S. Spot Index slipped this week, erasing nearly all of last week’s increase. National volume-weighted average rates for the sun-fueled grow types were both down week-over-week, while that for indoor product experienced a negligible rise. After contracting by over 40% last week, the average deal size for transactions involving outdoor flower experienced another significant decrease.
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 settling in close quarters in recent weeks, this week saw the national volume-weighted average for product traded in adult-use markets dip by almost 3%, causing the premium commanded by flower dealt in medical systems to increase. The larger proportional drop in the national price for recreational product was due primarily to significant declines in the markets of Oregon and Washington State. Modest price drops in California and Arizona were enough to push down the national volume-weighted average for flower traded in medical markets, despite increases in other states.
June 2018 Forward assessed at $1,625 per pound.
The average forward deal declined 2 pounds to 86 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 46%, 39%, and 15% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 126 pounds, 56 pounds, and 42 pounds, respectively.
At $1,575 per pound, the January Forward represents a premium of 14.7% relative to the current U.S. Spot Index of $1,373 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.
Sample headlines from this week's Premium Report:
Sample content from this week's Premium Report:
The Washington State Liquor and Cannabis Board (LCB), recently updated its Marijuana Dashboard to include monthly sales figures for October. According to LCB data, over $142 million in total sales were recorded in October. Previously, in our report for November 10th, we cited 502 Data’s tally of October’s tax collections to deduce that month’s sales would decline compared to September, as receipts had fallen somewhat. However, LCB spokesperson Mikhail Carpenter clarified to our analysts in an email this week that the monthly sales figures shown on the state’s dashboard include sales by producers and producer / processors, as well as retailers. Sales by supply side businesses are not taxed in Washington. As a result, October’s increase in total revenues, but declining tax collections, is likely due to an increase in wholesale sales, a phenomenon that would be expected in the month dubbed “Croptober.”
Due to the fact that the state’s 37% excise tax is levied at the point of retail sale, the just under $29.5 million in excise tax collections documented by the LCB in October indicate that retailers in Washington racked up just under $79.7 million in revenues in that month. Consequently, supply side businesses tallied about $62.3 million in revenues. While those figures at first glance suggest slim margins, it is likely that buyers were taking advantage of harvest season abundance to stock their inventories with product obtained at favorable rates. The latter number likely also includes sales of plant material by producer-only licenses to processors. As we have noted in recent weeks, Washington’s Spot Index is not down year-over-year by the proportions observed in Colorado, the only other state-legal adult-use cannabis market in the country that has been online for at least three years. Some of the reasons for this involve market structure and approaches to licensing that are discussed in our Mid-Year Wholesale Market Report.
1 December 2017. Copyright © 2017 New Leaf Data Services, LLC. All rights reserved