CANNABIS BENCHMARKS WEEKLY REPORT -- PUBLISHED MAY 18, 2018
U.S. Cannabis Spot Index down 2.8% to $1,252 per pound.
The simple average (non-volume weighted) price decreased by $8 to $1,374 per pound, with 68% of transactions (one standard deviation) in the $631 to $2,117 per pound range. The average deal size increased 3.2% to 5.6 pounds from 5.4 pounds last week. In grams, the Spot price was $2.76, and the simple average price was $3.03.
National Transaction Stats continued their recent steadiness, which has at this point been documented for four consecutive weeks. The relative frequency of transactions for outdoor-grown flower increased by about 1% week-over-week, at the expense of trades for greenhouse product. Flower grown under glass or tarp saw its share of the total reported weight moved increase by almost 1% compared to last week, while marginal corresponding declines were observed for the relative volumes of the other grow types.
The U.S. Spot Index fell for the seventh week in a row, a run that began in the opening week of April. All three grow types saw week-over-week drops in their volume-weighted averages, with the two sun-fueled product types largely responsible for the overall decline. Average deal sizes were up for the most part - a rare occurrence this year - with only the average transaction volume for outdoor flower experiencing a very slight contraction.
Despite prices for warehouse and greenhouse flower being significantly lower in Colorado than in Oregon, the greater prevalence of very inexpensive outdoor-grown product in the latter’s market is dragging the Beaver State’s Spot Index close to that of Colorado.
Last year at this time, Maine’s Spot Index was the closest of the medical-only markets to the national average. This week, composite volume-weighted average rates in Arizona and Michigan were observed to settle closer to the U.S. Spot Index.
June Forward unchanged at $1,350 per pound.
The average forward deal was just under 60 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 50%, 34%, and 16% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 60 pounds, 67 pounds, and 43 pounds, respectively.
At $1,350 per pound, the June Forward represents a premium of 7.8% relative to the current U.S. Spot Price of $1,252 per pound. With significant regulatory uncertainty weighing on certain markets, Forward prices are remaining elevated despite severe oversupply in numerous states, the disposition of which remains uncertain.
Reports from the field indicate that many buyers in states with regulations in flux - notably California and Michigan - are purchasing supplies on the cheap ahead of the implementation of new rules in those markets. However, the looming regulations, once put in place fully, will almost certainly raise the price of compliant supplies in the under-construction and nascent licensed systems. Much uncertainty is likely to be eliminated in the coming months as regulatory timelines are clarified, allowing forward buyers and sellers the opportunity to recalibrate to their new realities. 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:
18 May 2018. Copyright © 2018 New Leaf Data Services, LLC. All rights reserved