Cannabis benchmarks weekly report -- published 19 may 2017
U.S. Cannabis Spot Index up 2.8% to $1,623 per pound.
The simple average (non-volume weighted) price increased $131 to $1,960 per pound, with 68% of transactions (one standard deviation) in the $1,168 to $2,753 per pound range. The average deal size increased 18.3% to 9.2 pounds this week, from 7.8 pounds last week. In grams, the Spot price was $3.58, and the simple average price was $4.32.
The proportion of the total observed volume traded this week made up by each grow type held steady compared to last week for the most part, with a 2% increase in the relative volume of warehouse flower and a corresponding decrease in that for outdoor product. In regard to the relative frequency of transactions for each grow type, that for indoor rose by 6% to account for about two-thirds of all documented deals, with the corresponding decline was divided equally amongst the two sun-fueled cultivation approaches.
Indoor flower spanned from $999 to $6,400 per pound; the median price was $2,200/lb.
Greenhouse flower spanned from $1,000 to $3,150 per pound; the median price was $1,305/lb.
Outdoor flower spanned from $700 to $2,300 per pound; the median price was $1,200/lb.
The U.S. Spot Index this week saw its first upward movement in nearly two months, rising almost 3% to settle at $1,623 per pound. A drop in volume-weighted average rates for outdoor flower - which this week was observed to make up less than one-fifth of all documented weight moved - was offset by gains in pricing for both indoor and greenhouse-grown product. Warehouse flower accounted for almost half of the observed volume traded and rose to slightly exceed the $1,900 per pound threshold, off $90 from the current year-to-date high of $1,992.
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 diverged this week, with the former seeing a nearly 5% price rise compared to the latter’s slight decline. Volume-weighted average pricing in major medical markets such as California, Arizona, Michigan, and Nevada was up week-over-week. Observed rates in Colorado’s adult-use market and Washington’s licensed system settled below the national average for recreational product, shown in the table above, which was boosted by pricing in Oregon’s and Alaska’s younger, but at the moment much smaller, adult-use markets.
June Forward unchanged at $1,680 per pound.
Forward arrangements represented 3.9% of overall market activity this week. The average forward deal decreased to 29.9 pounds, from 36.4 pounds last week, on larger greenhouse deals. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 35%, 47%, and 18% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 25 pounds, 40 pounds, and 13 pounds, respectively.
At $1,680 per pound, the June Forward represents a premium of 3.5% relative to the current U.S. Spot Index of $1,623. The premium or discount for each forward price, relative to the U.S. Spot Index, is illustrated in the table below.
Sample content from this week's Premium Report:
Nevada transaction specifics are shown in the accompanying chart. All prices are volume weighted averages.
Beginning this week, Nevada cannabis businesses were allowed to apply to participate in the state’s upcoming early recreational sales program, set to begin in July, according to the state Department of Taxation. Applications will be accepted through the end of the month. Existing Nevada licensees that are in good standing are eligible to apply for cultivation, production, lab and retail licenses; furthermore, businesses may only apply for the type and number of licenses they hold currently, meaning that an operation consisting of a single dispensary license could not apply for two recreational retail licenses.
Opportunities for new entrants to Nevada’s market - or for existing businesses to expand and diversify their operations - are in the distributor field. For such licenses, applications will be accepted from current medical cannabis licensees, those holding wholesale liquor licenses, as well as companies currently transporting medical cannabis whose employees hold valid agent cards.
Application fees for all license types are $5,000 and are nonrefundable. For those that receive a license, fees of $10,000 will be levied on processors, $15,000 on distributors and testing labs, $20,000 for retailers, and $30,000 for cultivators. Applicants’ businesses must be located in a jurisdiction that will allow early recreational sales; we noted previously that the cities of Las Vegas, North Las Vegas, and Clark County at large intend to allow general cannabis commerce and encompass the bulk of Nevada’s current medical cannabis operations. Reno also recently voted to participate in the early sales program, according to the Gazette-Journal, while the Las Vegas Review-Journal points out that the city of Henderson put in place a six-month moratorium on recreational sales in February.
Sample headlines from this week's Premium Report:
19 May 2017. Copyright © 2017 New Leaf Data Services, LLC. All rights reserved.