CANNABIS BENCHMARKS WEEKLY REPORT — AUGUST 31, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED AUGUST 31, 2018

U.S. Cannabis Spot Index up 0.7% to $1,117 per pound.

 

The simple average (non-volume weighted) price decreased by $5 to $1,317 per pound, with 68% of transactions (one standard deviation) in the $537 to $2,097 per pound range. The average deal size declined by 3.7% from 4.7 pounds to 4.5 pounds. In grams, the Spot price was $2.46, and the simple average price was $2.90.

 

The relative frequency of trades for indoor-grown flower decreased by 1% this week, with the entirety of the corresponding increase accruing to transactions involving greenhouse product. Warehouse flower also saw a slight contraction in its share of the total reported weight moved, while the relative volume of outdoor product also declined, by about 2% week-over-week. As a result, greenhouse flower’s share of the total observed volume traded this week was up by over 2% compared to last week.

The national volume-weighted rate for greenhouse flower fell to a historic low for that price assessment, at $924 per pound. Greenhouse product in Washington State saw its going rate this week slip to the lowest ever observed for that grow type in any market, at $644 per pound. California’s Spot Index declined to $1,101 per pound, an all-time low for the Golden State. Alaska’s Spot Index dropped to a year-to-date low of $3,944 per pound this week.   

The histogram below show price dispersion by grow type for August 2018. The proportion of outdoor-grown flower transacting at $400 per pound or less has more than doubled, from 17% in July to 39% in August. The oversupply in Western markets is well-documented, and the perennial objective of selling off inventory ahead of the fall outdoor harvest is expected. The price decline, however, is dramatic, with the August U.S. Spot Price for outdoor-grown flower averaging $676 per pound in 2018 vs. $1,101 in 2017, a 39% decrease.

September Forward closes at $1,150 per pound.

 

The average reported forward deal increased to 64.5 pounds this week, from 57 pounds last week. The increase in forward deal size was driven predominately by forwards in the West for outdoor-grown flower, including deals ranging from 200 to 800 pounds per month. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 40%, 40%, and 20% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 94 pounds, 43 pounds, and 40 pounds, respectively.

 

At $1,150 per pound, the September Forward represents a premium of 2.9% relative to the current U.S. Spot Price of $1,117 per pound. 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:

  • California

    State Spot Index Stable in Final Week of August, But Monthly Average Composite Price Down 1.4% from July

  • Colorado

    Rise in Wholesale Prices Observed Ahead of Labor Day Weekend in 2017 Not Repeated this Year, as State Spot Index is Stable to Close August

  • Oregon

    Trailing 4-Week Average Composite Price Falls Below That of Washington State for the First Time Since June 2016

  • Washington

    Volume-Weighted Price for Greenhouse Flower Slips to Record Low for Any Market at Less than $650 Per Pound, But Spot Index Rises for Fifth Consecutive Week

  • Nevada

  • Spot Index Declines in June as Total Retail Demand Slips Slightly Month-Over-Month
  •  
  • Illinois
  • New Law Could Result in Increased Demand in State’s Medical Program, Where Wholesale Prices Have Already Been Rising for Most of 2018

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

3 August 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

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