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CANNABIS BENCHMARKS WEEKLY REPORT -- PUBLISHED DECEMBER 29, 2017
U.S. Cannabis Spot Index up 0.4% to close 2017 at $1,436 per pound.
The simple average (non-volume weighted) price decreased $5 to $1,686 per pound, with 68% of transactions (one standard deviation) in the $938 to $2,435 per pound range. The average deal size increased 20.7% to 14.2 pounds from 11.8 pounds last week. In grams, the Spot price was $3.17, and the simple average price was $3.72.
The relative frequency of trades for indoor product declined this week, by 3%. The relative frequency of transactions for greenhouse and outdoor flower were up by 2% and 1%, respectively, week-over-week. Like last week, warehouse product made up roughly half of all observed weight moved, although the relative volume of this grow type was down 1% compared to last week. The corresponding increase accrued to outdoor-grown flower, while the relative volume of greenhouse product was stable week-over-week.
Indoor flower spanned from $850 to $5,800 per pound; the median price was $1,600/lb.
Greenhouse flower spanned from $600 to $3,100 per pound; the median price was $1,104/lb.
Outdoor flower spanned from $500 to $2,200 per pound; the median price was $950/lb.
The U.S. Spot Index increase marginally to close the year, as pricing for each individual grow type was relatively steady week-over-week, with none experiencing price movement of more than 1%. Average deal sizes were up across the board at the conclusion of 2017; this is the second consecutive week that both sun-fueled grow types saw in increase in their average transaction volumes.
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.
Despite week-over-week increases in the Spot Indices of California and Michigan, downward pricing pressure in medical markets in other states was enough to result in a marginal drop in the national rate for product traded in such systems. Only slight week-over-week price movements were observed in states with adult-use markets, causing the national volume-weighted price for flower in recreational systems to be flat week-over-week. 2017 draws to a close with product in medical markets commanding a premium of $171 per pound over that in adult-use systems.
January 2018 Forward closes down $50 at $1,475 per pound.
The average forward deal declined nominally to 71.5 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 55%, 23%, and 22% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 89 pounds, 54 pounds, and 48 pounds, respectively.
2017 closed with a more modest rise in the U.S. Spot than has been observed in prior years. Furthermore, anticipated disruption due to the imposition of regulation on the major markets of California and Michigan has not resulted in dramatic price fluctuations in those states to this point. Increasingly, it appears market participants believe that the transition to licensed, regulated systems in those states will be a gradual process, at least through the first half of 2018. Combined with continuing downward price pressure in the major markets of Colorado, Oregon, and Washington State, near-term Forward price assessments were lower again this week. At $1,475 per pound, the January Forward represents a premium of 2.7% relative to the current U.S. Spot Index of $1,431 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 trend line of the U.S. Spot Index concluded 2017 by demonstrating slight positive momentum in the final month of the year. Last year, an upward trend in the U.S. Spot’s Trailing 4-Week Average was significantly more evident. The trend lines of the Spot Indices of California, Oregon, and Michigan were also on the upswing to close 2017. Meanwhile, Colorado and Washington State continue to see their Trailing 4-Week Average prices slip, with the former doing so for virtually the entirety of Q4 2017, and even prior to that as well. The trend line of Nevada’s Spot Index is also showing a small decline to end the year, indicating that enough supply is available to meet demand recently, after record adult-use sales in October.
The U.S. Spot Index experienced a marginal bump in the final week of 2017, rising by just $5, or 0.4%, to settle at $1,436 per pound. This week’s national composite price is down 11.1% year-over-year, compared to the rate of $1,615 per pound documented in the final week of 2016. From mid-December through this week, the U.S. Spot has risen by 2.4%, whereas last year saw an over 10% increase in the same span. The Spot Indices of the major Western markets are all down year-over-year, though to varying degrees, with California’s off by a significantly smaller proportion than that of Colorado, Oregon, or Washington. Overall, after a typical harvest season decline in the national average - which dropped by 18% between mid-September and mid-November, when the annual low rate of $1,368 per pound was observed - the final six weeks of 2017 saw a 5% increase in the U.S. Spot Index.
29 December 2017. Copyright © 2017 New Leaf Data Services, LLC. All rights reserved