cannabis benchmarks weekly report -- published 21 july 2017
U.S. Cannabis Spot Index down 2.7% to $1,581 per pound.
The simple average (non-volume weighted) price increased $9 to $1,821 per pound, with 68% of transactions (one standard deviation) in the $1,027 to $2,615 per pound range. The average deal size decreased 3.2% to 7.9 pounds from 8.2 pounds last week. In grams, the Spot price was $3.49, and the simple average price was $4.01.
The influence of greenhouse product on the nation’s overall volume-weighted average subsided this week, as the relative volume of such flower contracted by 6% compared to last week. Most of the corresponding gain in that metric accrued to warehouse-grown product, which also saw a 5% week-over-week uptick in its relative frequency of observed transactions. Outdoor flower’s presence in our observations remained marginal, but its relative volume did increase slightly compared to the week prior.
Indoor flower spanned from $999 to $6,400 per pound; the median price was $1,800/lb.
Greenhouse flower spanned from $850 to $2,800 per pound; the median price was $1,305/lb.
Outdoor flower spanned from $700 to $1,600 per pound; the median price was $1,200/lb.
Since attaining its highest rate since the week of 4/20 in the final week of June, the U.S. Spot Index has for the most part been on the decline this month, falling this week by nearly 3%. The national composite price was dragged down by dips in the volume-weighted average rates for sun-grown product. Pricing for indoor flower declined, but remained above the $1,800 per pound threshold, below which it has fallen only once so far this year, in the first week of June.
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 flower in both medical and adult-use markets dropped this week, but more so in the former, due mainly to a nearly identical drop in the Spot Index of California, the nation’s most sizeable medical cannabis market. In Colorado, supply side pricing for product in each market segment, which remains separate by rule, was virtually identical this week, with volume-weighted average rates on the medical side commanding just a $3 premium.
August Forward unchanged at $1,540 per pound.
Forward arrangements represented 6% of overall market activity this week. The average forward deal increased to 49 pounds, from 42 pounds last week. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 30%, 60%, and 10% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 26 pounds, 63 pounds, and 38 pounds, respectively.
At $1,540, the August Forward represents a discount of 2.6% relative to the current U.S. Spot Index of $1,581. 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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Warehouse flower this week increased its share of the total observed volume traded in California by about 6% compared to last week. Outdoor-grown product did the same, but by a slightly smaller magnitude. Consequently, greenhouse flower saw its portion of the total documented weight moved contract by 10% compared to last week. This week also saw trades for product grown under lamps increase in relative frequency, from about two-thirds of all observed deals last week to almost three-quarters this week. After being the object of a quarter of all reported transactions last week, greenhouse flower was traded in only a fifth of all documented deals this week.
After achieving a year-to-date high of $1,724 per pound in the final week of June, California’s Spot Index has been on the decline. This week saw the state’s composite volume-weighted average fall by 3.4% to settle at $1,558 per pound, down nearly 10% from the aforementioned annual high price recorded just three weeks ago. Still, this week’s Spot rate remains above the average composite price for the year thus far, which is currently $1,534 per pound.
Indoor-grown flower continued to hover above the $1,800 per pound threshold, as it has for seven consecutive weeks at this point. However, this week did see a nearly 3% decline in volume-weighted average rates for such product, with some market participants remarking that they expected more to come as summer and fall wear on.
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21 July 2017. Copyright © 2017 New Leaf Data Services, LLC. All rights reserved.