cannabis benchmarks weekly report -- published 12 may 2017
U.S. Cannabis Spot Index down 3.1% to $1,579 per pound.
The simple average (non-volume weighted) price decreased $7 to $1,829 per pound, with 68% of transactions (one standard deviation) in the $1,078 to $2,580 per pound range. The average deal size increased 1.7% to 7.8 pounds this week, from 7.7 pounds last week. In grams, the Spot price was $3.48, and the simple average price was $4.03.
Transaction stats observed this week were nearly identical to those of last week. The only documented changes include an increase of 1% in both the relative frequency of deals and the relative volume of greenhouse flower. Those marginal increases corresponded to declines of the same magnitude for outdoor-grown product. Just like last week, warehouse flower accounted for a bit less that two-thirds of all observed transactions and just under half of the documented weight moved.
Indoor flower spanned from $999 to $6,500 per pound; the median price was $2,000/lb.
Greenhouse flower spanned from $1,000 to $3,100 per pound; the median price was $1,305/lb.
Outdoor flower spanned from $700 to $2,000 per pound; the median price was $1,200/lb.
The U.S. Spot Index has now experienced six consecutive weeks of falling or flat performance, declining this week by just over 3% to settle at $1,579 per pound. The overall decrease in the nation’s composite volume-weighted average was driven primarily by a fall in pricing for indoor product, though greenhouse-grown flower also saw a slight decline in its going rate as well. Of the three grow types, outdoor product was the only one to see an increase in its average pricing, rising by over 5% to approach the $1,200 per pound threshold.
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.
Rates for product in medical and adult-use markets continue to move largely in parallel, with the former commanding a premium over the latter of $341 this week, up from $316 last week. The steeper decline in pricing for flower to be sold to general consumers this week was prompted primarily by historic low rates in Colorado, in addition to pricing declines in Oregon and Alaska. Though California saw a marginal rise in its state Spot this week, other significant medical markets such as Arizona, Michigan, Illinois, and Nevada all saw their state Spot Indices drop week-over-week.
June Forward declines $20 to $1,680 per pound.
Forward arrangements represented 3.7% of overall market activity this week. The average forward deal increased to 36.4 pounds, from 16.1 pounds last week, on larger greenhouse deals. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 42%, 50%, and 8% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 25 pounds, 47 pounds, and 30 pounds, respectively.
At $1,680 per pound, the June Forward represents a premium of 6.4% relative to the current U.S. Spot Index of $1,579. Despite increasing prices during this period last year - in 2016, the U.S. Spot Index reached a high of $2,096 on May 27th - declining prices over the past six weeks are lowering expectations for the June Forward, which is currently $334 per pound less than the June 2016 average price of $2,014. 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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The U.S. Spot Index continued to decline this week, falling 3.1% to settle at $1,579 per pound. This week is the first time that the national composite volume-weighted average has been observed to drop below the $1,600 per pound threshold since early March. Currently, the year-to-date high price for the U.S. Spot occurred in the week ending March 31st, when the national average reached $1,682 per pound. Last year at this time, the U.S. Spot was rising on its way to achieving an annual high price at the end of May, when it peaked at $2,096 per pound in the week ending May 27, 2016. If the current year-to-date high price for 2017 were to hold for the remainder of the year, that would mark the second consecutive year in which the annual peak price was observed to occur earlier than the year prior. 2016’s late May peak was much earlier than 2015’s high price, documented in September, just ahead of the harvest season. As we note below in the Forward Curve commentary, market participants are still reporting that they expect prices to rise and peak in June, but constantly morphing supply-demand dynamics have the potential to continue to upset traditional knowledge.
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12 May 2017. Copyright © 2017 New Leaf Data Services, LLC. All rights reserved.