CANNABIS BENCHMARKS WEEKLY REPORT -- PUBLISHED MARCH 23, 2018
U.S. Cannabis Spot Index up 1.7% to $1,367 per pound.
The simple average (non-volume weighted) price increased by $219 to $1,598 per pound, with 68% of transactions (one standard deviation) in the $668 to $2,507 per pound range. The average deal size increased 31.8% to 9.3 pounds from 7.1 pounds last week. In grams, the Spot price was $3.01, and the simple average price was $3.52.
The relative frequency of trades for indoor and outdoor flower both increased this week, by about 6% and 1%, respectively, resulting in a nearly 7% decline in that metric for transactions involving greenhouse product. Both greenhouse and outdoor flower saw their shares of the total reported weight moved increase week-over-week, by 3% each. Consequently, warehouse-grown product experienced a 6% decline in its relative volume compared to last week.
Indoor flower spanned from $700 to $6,400 per pound; the median price was $1,400/lb.
Greenhouse flower spanned from $475 to $3,000 per pound; the median price was $904/lb.
Outdoor flower spanned from $300 to $1,600 per pound; the median price was $800/lb.
The U.S. Spot Index continued its recent upward movement, increasing for the sixth consecutive week. A significant rise in the volume-weighted average price for indoor flower was exclusively responsible for the uptick in the overall composite rate, as both the sun-fueled grow types saw downturns in their going prices. Average deal sizes for greenhouse and outdoor product experienced notable expansions this week, recovering from recent contractions.
The U.S. Spot Index’s Trailing 4-Week Average continued its upward trek this week, with a slide in the trend line of California’s composite price nearly causing the two to meet for the first time in roughly two months. The Trailing 4-Week Average of Nevada’s Spot Index showed its first positive momentum since the conclusion of 2017. The trend lines of the remaining markets depicted below all continued to slide downward this week, although that of Colorado’s Spot Index is very close to flat. Oregon’s Spot rate continues to display the sharpest downturn of any of the major or secondary markets shown, as it has throughout March. The downward skid of Washington’s composite price also accelerated this week.
April Forward down $50 to $1,400 per pound.
The average forward deal was 58 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 30%, 39%, and 30% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 67 pounds, 70 pounds, and 31 pounds, respectively.
April’s Forward, as well as those of May, June, and July, were lowered this week. Currently, market participants are still warily eyeing July as the likely peak of wholesale pricing in 2018, due primarily to potential disruptions in California’s new regulated market that we have discussed previously on several occasions, in addition to the expectation of higher rates in Massachusetts’ new adult-use system, which appears on track to open in that month.
The following is an excerpt from the Annual Review & Outlook: 2017-2018 Edition.
Viewing the quarterly wholesale pricing trends in Washington State in 2017, it is evident from the chart below that steadiness through the first three quarters of the year gave way to falling rates in Q4, which have continued into this year.
Washington’s quarterly Spot Index was very stable through Q1 and Q2 2017, while volume-weighted average prices for each individual grow type were quite comparable as well. The state’s composite rate slipped by just 1.9% in Q3 2017, and would slide downward by an additional 8.2% in the final quarter of the year. With only one week left in Q1 2018, the quarter-to-date average of Washington’s Spot Index is $985 per pound, off by 21.2% from Q4 2017’s going rate, indicating that the wholesale price decline that began at the end of last year is accelerating. Such behavior - particularly a drop off as pronounced as the one being observed to take place currently - is uncharacteristic of the transitions from Q4 to Q1 observed generally across state markets. In years past, price recoveries have frequently been documented in that span.
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23 March 2018. Copyright © 2018 New Leaf Data Services, LLC. All rights reserved