CANNABIS BENCHMARKS WEEKLY REPORT -- JUNE 1, 2018
U.S. Cannabis Spot Index down 3.9% to $1,237 per pound.
The simple average (non-volume weighted) price decreased by $40 to $1,375 per pound, with 68% of transactions (one standard deviation) in the $624 to $2,127 per pound range. The average deal size decreased 2.2% to 5.4 pounds from 5.6 pounds. In grams, the Spot price was $2.73, and the simple average price was $3.03.
National Transaction Stats showed a small increase in the prevalence of outdoor-grown flower this week. The relative frequency of transactions for indoor-grown product decreased by 2% week-over-week, with the corresponding increase accruing to trades for outdoor flower. Outdoor-grown product saw a 3% expansion in its share of the total reported weight moved nationally, with warehouse flower experiencing the entirety of the resulting contraction. National transaction stats for greenhouse product were stable week-over-week.
Several new historic and year-to-date lows were documented this week. Nationally, the U.S. Spot Index and the volume-weighted average price for outdoor product sank to all-time lows of $1,237 and $700 per pound, respectively. The state Spot prices reported from California and Oregon represent historic lows for those markets, settling this week at $1,112 and $977 per pound, respectively. Nevada’s Spot Index reached a year-to-date low of $2,187 per pound, just $28 above its all-time trough of $2,159 per pound, recorded in the week ending June 2, 2017.
For 2018, the opening week of the year remains the annual high point of the U.S. Spot Index thus far. However, after a precipitous drop over the course of January, the national composite price rose to crest at $1,392 per pound in the final week of March, the second-highest weekly Spot rate recorded this year. Since that point, the U.S. Spot Index has sank by 11.1% to this week’s current all-time low, outpacing the rate of decline documented in the same period last year.
As illustrated in the chart below, the Cannabis Benchmarks U.S. Spot Index declined to $1,237 per pound for the week ending June 1st, 2018, its lowest price since inception in April 2015. Year-to-date, the Spot Index has averaged $1,317 per pound versus $1,619 per pound through the same period last year.
December Forward initially assessed at $1,300 per pound.
The average forward deal was 62 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 51%, 35%, and 14% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 64 pounds, 69 pounds, and 43 pounds, respectively.
At $1,400 per pound, the July Forward represents a premium of 13% relative to the current U.S. Spot Price of $1,237 per pound. As previously reported on several occasions, the increase in the July Forward price over the current market is based predominantly on the uncertainty regarding the end of transition period allowances for licensed businesses in California. As witnessed in Oregon, wholesale prices increased dramatically in Q4 2016 as new mandates were imposed upon the licensed adult-use market, including product testing requirements of a stringency comparable to those to be put in place in California in the second half of this year. 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:
1 June 2018. Copyright © 2018 New Leaf Data Services, LLC. All rights reserved