CANNABIS BENCHMARKS WEEKLY REPORT — November 9, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED NOVEMBER 9, 2018

VISIT US AT THE MJ BIZ CONFERENCE BOOTH #3979!

U.S. Cannabis Spot Index down 1.2% to $1,047 per pound.

 

The simple average (non-volume weighted) price decreased by $24 to $1,246 per pound, with 68% of transactions (one standard deviation) in the $483 to $2,010 per pound range. The average deal size increased 2.8% to 4 pounds. In grams, the Spot price was $2.31, and the simple average price was $2.75.

 

National Transaction Stats were quite stable week-over-week. The relative frequency of trades for indoor flower declined by 1%, with the resulting increase accruing to transactions involving greenhouse product. Each grow type’s share of the total reported weight moved nationwide was virtually unchanged compared to last week. Last year at this time, the relative volumes of warehouse, greenhouse, and outdoor-grown flower were documented to settle at 44%, 31%, and 25%, respectively.

The U.S. Spot Index declined by 1.2% this week to settle at $1,047 per pound. This week’s national composite price represents another historic low, the third consecutive week in which that milestone has been established. Nearly every state market covered by our reporting – with the exceptions of Nevada, Maine, Massachusetts, and Vermont – saw week-over-week decreases in their Spot Indices, while Oregon’s was flat.

 

Transaction States continued to be fairly stable, both on the national level and in the major Western markets. This observation – along with the significantly smaller deal sizes documented this year relative to last – suggests that persistent oversupply situations and low prices have dampened demand from wholesale buyers, who in prior years have been eager to stock up on cheap product in the wake of the autumn harvest.

The national volume-weighted price for flower to be sold in adult-use markets dropped by almost 2% this week. Nevada was the only state with a functional adult-use system to see an uptick in its Spot rate this week, and of less than 1% at that. Declines in the medical-only markets of Arizona, Illinois, and Michigan, among numerous others, weighed down the national rate for product designated for registered patients.  

December 2018 Forward unchanged at $1,050 per pound.

 

The average reported forward deal increased to 56 pounds from 52 pounds last week. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 54%, 30%, and 16% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 69 pounds, 38 pounds, and 41 pounds, respectively.

 

At $1,050 per pound, the December Forward represents a premium of 0.2% relative to the current U.S. Spot Price of $1,047 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

    Issuance of First Annual Licenses Means Those Businesses Will be Required to Use METRC Tracking, But Wholesale Price Disruption Not Expected Immediately

  • Colorado

    Composite Price Again Falls to New Historic Low on Declining Prices for Greenhouse Flower, Increased Relative Volume of Outdoor Product

  • Oregon

    Despite Recent Upward Trend, Quarter-to-Date Average of State’s Spot Index Down Over 15% Compared to Q3’s Mean Composite Price

  • Washington

    Tax Collection Data Suggests Decrease in Demand Contributing to Record Low Wholesale Prices

  • Michigan

  • Commencement of Regulated Medical Market Still Uncertain as Voters Approve Adult-Use Legalization Measure
  •  
  • New Mexico

  • Judge Strikes Down State’s Plant-Count Restrictions on Licensed Businesses, Calls for New Rules to be Formulated that Could Increase Supply
  • New Governor-Elect Has Expressed Support for Legal Cannabis, a Departure from the Views of Current Governor
  •  

 Watch our CEO, Jonathan Rubin, in his latest appearance on BNN Bloomberg discussing the price declines experienced in competitive U.S. markets and the likely parallels forthcoming in Canada.

VISIT US AT THE MJ BIZ CONFERENCE BOOTH #3979!

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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