CANNABIS BENCHMARKS WEEKLY REPORT — September 7, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED September 7, 2018

U.S. Cannabis Spot Index down 0.8% to $1,108 per pound.

 

The simple average (non-volume weighted) price decreased by $32 to $1,285 per pound, with 68% of transactions (one standard deviation) in the $512 to $2,059 per pound range. The average deal size was nominally unchanged at 4.5 pounds. In grams, the Spot price was $2.44, and the simple average price was $2.83.

 

The relative frequency of trades for outdoor product increased by 1% week-over-week, with that for greenhouse flower experiencing a decline of the same proportion, while indoor product’s share of this metric was flat. Each individual grow type’s share of the total reported weight moved was virtually unchanged compared to last week. Only outdoor flower saw an uptick in its relative volume large enough to be discernible in the chart below; shifts in the relative volumes of warehouse and greenhouse product were negligible.  

 

 

The U.S. Spot Index slipped downward slightly this week, continuing the up-and-down behavior that has been observed since late July. A drop in the volume-weighted price for indoor flower was entirely responsible for the decline in the composite rate. Average deal sizes continued to shrink for the most part and are significantly smaller than those observed in the opening week of 2018, when the average composite transaction volume, and those for warehouse, greenhouse, and outdoor product were documented at 11.6, 8.9, 14.1, and 20.4 pounds, respectively.   

The national volume-weighted prices for flower to be sold to registered patients and general consumers both decreased this week by magnitudes similar to that of the U.S. Spot Index as a whole. In the adult-use realm, small declines in those sectors in California, Colorado, and Washington State worked to push down the national rate. Product in Colorado’s medical cannabis market also experienced a week-over-week downturn, as did the Spot Indices of Illinois and Maine.

March 2019 Forward initially assessed at $1,065 per pound.

 

The average reported forward deal decreased to 61 pounds this week, from 64.5 pounds last week. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 43%, 40%, and 18% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 92 pounds, 42 pounds, and 40 pounds, respectively.

 

The initial assessment of the March 2019 Forward price reflects uncertainty in the California market. This week’s forward observations, and additional feedback from the field, reflect an essentially equal split as to whether prices will increase or decrease in March relative to February. By March, a good proportion of California businesses could be subject to plant and inventory tracking, with incremental administrative costs being passed on to wholesale and retail buyers. Additional upward price pressure in the spring could come from demand growth in the Massachusetts market, although such pressure could also conceivably be minimal given the slow pace of that state’s rollout of its adult-use system.

 

At $1,100 per pound, the October Forward represents a discount of 0.7% relative to the current U.S. Spot Price of $1,108 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

    After July’s Monthly Composite Price Increased Slightly with New Compliance Requirements, Downward Trend in Monthly Wholesale Rates Resumed in August

  • Colorado

    Despite Numerous Changes to Product Testing Rules in 2018 and Increased Costs to Growers, Monthly Spot Prices Have Trended Downward Consistently This Year

  • Oregon

    State Spot Index Rises for Second Consecutive Week, Behavior Not Observed Since Early April

  • Washington

    Composite Price Slips Slightly This Week, But Still Up Over 10% Compared to Current YTD and Historic Low Observed at the End of July

  • New Mexico

  • Statewide Production Decreases in Q2 for Second Straight Quarter as Patient Purchasing and Wholesale Prices Rise
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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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