CANADA CANNABIS SPOT INDEX — December 28, 2018

CANADA CANNABIS SPOT INDEX (CCSI) 

Published December 28, 2018

 

The CCSI declined 6% this week to C$6.63 per gram, from C$7.08 per gram last week, and is down 15% over the past two weeks. C$6.63 per gram equates to US$2,212 per pound, which places the CCSI at 188% of the U.S. Cannabis Spot Index, currently at US$1,175 per pound.

Wholesale prices in Canada headed lower with supply shortages; howevever, not as extreme as reported in November when AGLC had only 20% of their product delivered and Quebec closed retail locations due to insufficient supply. 

 

Supply shortages still exist, yet inventory on provincial online sites is not as limited as it was in November. AGLC showing nearly 80% of dried flower products available on the online site. Experienced consumers, frustrated with limited quantity, could be turning back to the black market while supply shortages get resolved. One of the contributing factors to the initial supply shortage was incorrect packaging and labeling. Reports from the field indicate that some LPs have been able to resolve these issues. 

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

21 December Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — December 28, 2018

U.S. Cannabis Spot Index — Published December 28, 2018

U.S. Cannabis Spot Index up 2.5% to $1,175 per pound.

 

The simple average (non-volume weighted) price increased by $46 to $1,341 per pound, with 68% of transactions (one standard deviation) in the $549 to $2,133 per pound range. The average reported deal size was nominally unchanged at 4.1 pounds. In grams, the Spot price was $2.59, and the simple average price was $2.96.

 

The relative frequency of trades for greenhouse flower grew this week, by 1%, while that for outdoor product decreased by the same proportion. The relative frequency of transactions for indoor flower was unchanged compared to last week. Warehouse-grown flower’s share of the total reported weight moved nationwide increased by 1% this week, as did the relative volume of greenhouse product. Consequently, the relative volume of outdoor flower contracted by 2% week-over-week.

The U.S. Spot Index finished 2018 with three consecutive weeks of positive movement, rising this week by 2.5% to settle at $1,175 per pound. For December, the national volume-weighted rate averaged $1,136 per pound, up by 5.7% from November’s mean monthly Spot Index of $1,075 per pound. Despite the recent upward momentum exhibited by the national composite price, however, a broader view demonstrates that this year saw significant price erosion. The U.S. Spot sank by 21.8% from the opening to the closing week of 2018. Additionally, for Q4, the national composite rate averaged $1,094 per pound, off by 32.8% compared to the quarterly average price of $1,417 per pound, documented in the same period in 2017. Yet, Q4 2018’s mean going rate is off by only 2.2% from Q3’s quarterly average price of $1,119 per pound. Rising rates in California, Colorado, and Oregon in the wake of the fall harvest period worked to mitigate the quarter-over-quarter downturn.

The national volume-weighted price for flower to be sold in adult-use markets jumped this week. Increases in California’s adult-use sector, as well as in Colorado and Nevada, outweighed marginal declines in Oregon and Washington. Sinking wholesale rates in the medical portion of California’s market, as well as in Arizona, were primarily responsible for pushing down slightly the national price for product designated for registered patients.   

January 2019 Forward closes up $25 to $1,150 per pound.

 

The average reported forward deal decreased to 55.8 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 54%, 29%, and 17% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 63 pounds, 49 pounds, and 43 pounds, respectively.

 

At $1,150 per pound, the January 2019 Forward represents a discount of 2.2% relative to the current U.S. Spot Price of $1,175 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 Falls by Almost 18% Over Course of 2018, Even as Compliance Costs Increased With Imposition of Licensing and Regulation

  • Colorado

    Weekly Composite Price Sees Smallest Proportional Decline of the Major Western Markets in 2018

  • Oregon

  • Composite Price Ticks Downward Slightly this Week, Off by 60% From Opening Week of 2018
  •  
  • Washington

  • State Spot Index Slides Over 55% from Beginning to End of 2018, Down Nearly 20% from Start of Q4
  •  

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28 December 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — December 21, 2018

U.S. Cannabis Spot Index — Published December 21, 2018

U.S. Cannabis Spot Index up 1.4% to $1,147 per pound.

 

The simple average (non-volume weighted) price increased by $16 to $1,294 per pound, with 68% of transactions (one standard deviation) in the $515 to $2,074 per pound range. The average reported deal size declined to 4.1 pounds from 4.2 pounds last week. In grams, the Spot price was $2.53, and the simple average price was $2.85.

 

The relative frequency of trades for indoor flower grew this week, by 1%, while that for greenhouse product decreased by the same proportion. The relative frequency of transactions for outdoor flower was unchanged compared to last week. Warehouse-grown flower’s share of the total reported weight moved nationwide increased by over 2% this week, while the relative volume of outdoor product contracted by the same proportion. The relative volume of greenhouse flower was stable week-over-week.  

The U.S. Spot Index rose for the second straight week, by 1.4%, to settle at $1,147 per pound. This week’s national composite price is the highest observed since early in H2 – in the week ending July 13th, specifically – and is up by 9.6%, or $100, from the current annual trough documented in the week ending November 9th. Still, as we close in on the end of 2018, this week’s U.S. Spot rate is off by nearly 20% year-over-year, compared to the national composite price of $1,431 per pound reported for the week ending December 22, 2017. This week’s uptick in the U.S. Spot was due largely to rising supply side rates in California and Colorado. Perhaps the most notable state-level price movement – the increase that took place in Massachusetts – had a minimal effect on the overall national average.

The national volume-weighted price for flower to be sold in adult-use markets slipped slightly this week. Declines in California’s adult-use sector, as well as in Oregon, Nevada, and Alaska, outweighed small increases in Colorado and Washington. Increases in wholesale rates in the medical portion of California’s market, as well as in Michigan, Massachusetts, and Illinois, were primarily responsible for pushing up the national price for product designated for registered patients.   

January 2019 Forward up $25 to $1,125 per pound.

 

The average reported forward deal decreased to 56.4 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 53%, 29%, and 18% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 65 pounds, 49 pounds, and 43 pounds, respectively.

 

At $1,125 per pound, the January 2019 Forward represents a discount of 1.9% relative to the current U.S. Spot Price of $1,147 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

    Composite Price Has Climbed 13% Since Falling to Harvest-Season Trough in Late October

  • Colorado

    Year-to-Date Average Rates for Indoor and Greenhouse Flower Down by Roughly 15% and 35%, Respectively, Compared to 2017’s Mean Prices

  • Oregon

  • State Spot Index Down 5.5% This Week, Largest Week-Over-Week Decline Observed So Far in Q4
  •  
  • Washington

  • Volume-Weighted Price for Greenhouse Flower Falls to Historic Low for Such Product in Any Market, Approaching $525 Per Pound
  •  
  • Massachusetts

  • State Spot Index Jumps by $100 Week-Over-Week, Up Almost 8% Since Beginning of Adult-Use Sales

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21 December 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — December 21, 2018

CANADA CANNABIS SPOT INDEX (CCSI) 

Published December 21, 2018
The CCSI declined 9% this week to C$7.08 per gram, from C$7.79 per gram last week, and is down 14% over the past two weeks. These declines may suggest that broad media coverage of shortages across the country, as well as actions by the provincial regulators, are tempering supply expectations from end-use consumers. C$7.08 per gram equates to US$2,387 per pound, which places the CCSI at 208% of the U.S. Spot Index, currently at US$1,147 per pound.
 
Activity across the country was notable as regulators moved to produce a more equitable approach to accessing supplies, while tempering demand, including moving to a lottery system in Alberta for purchase from the Provincial supplier, temporarily shutting government run stores in Quebec to provide time to re-stock shelves, and moving to a lottery system in Ontario for retail dispensary licenses (which is dramatically lower than the up to 1,000 brick and mortar stores expected to just 25 in the spring of 2019).

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21 December Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — December 18, 2018

CANADA CANNABIS SPOT INDEX (CCSI) 

Cannabis Benchmarks announces the launch of the first benchmark price to track wholesale adult-use cannabis prices in Canada, as governed by the The Cannabis Act. Sales to consumers began on October 17, 2018. The Canada Cannabis Spot Index (CCSI) is the assessed price paid by retailers to the Provincial body controlling supplies.

The CCSI was launched to assess prices at the national level. Provincial indices for Ontario, Quebec, Alberta and British Columbia will be introduced in the first quarter of 2019. Cannabis Benchmarks assesses the average wholesale price that an online or retail location pays for dried cannabis flower from Licensed Producers (LPs) under supply agreements with the provinces. Cannabis Benchmarks’ methodology includes working directly with market participants from both the supply and demand sides, including analysis of public and private data, such as StatsCan and LP company filings, to assess the average wholesale price paid each week.

For the week ending December 14th, the CCSI was up 0.8% to C$7.79/gram, equating to US$2,678/pound.

The CCSI has been quite volatile over the past nine weeks since legalization. Cannabis Benchmarks has recorded wholesale prices averaging C$7.50/gram or US$2,576/pound* over this time frame. The price range was C$6.66/gram to C$8.23/gram.

The structure of the Canadian cannabis market is fundamentally different than those of state markets in the U.S. While the U.S. market is a free market with wholesale prices established between buyers and sellers, the Canadian government exerts more control over the market, with wholesale prices and distribution set in large part by the provinces. Each province has a similar structure with a provincially-appointed government agency working directly with LPs to procure the region’s supply.

      In Quebec, New Brunswick, Nova Scotia and Prince Edward Island, cannabis is sold through government owned retail stores and online sites with both wholesale and retail prices set by the provinces.

      In Ontario, cannabis is currently available only through the Ontario Cannabis Store, a government controlled online store, with privately owned retail stores opening in April, 2019; however, the Ontario Cannabis Store will still be the exclusive wholesaler to these retail stores.

      In Alberta, although cannabis is distributed through privately owned retail stores that can set their own prices, the wholesale price is established by the Alberta Gaming and Liquor Commission through supply agreements with the LPs.

      British Columbia has a hybrid system with both government owned and privately owned retail stores, supplied by the British Columbia Liquor Distribution Branch.

      Manitoba, Newfoundland and Labrador, and Saskatchewan allow privately owned retail stores, regulated by the provincial liquor control commission and supplied through supply agreements with the LPs.

With the exception of Manitoba, all the provinces also run government owned online websites. Although the provinces have a large role in establishing both wholesale and retail pricing, there is still a wide range of prices across the country.

Wholesale price movement should be expected when implementing such vast legislation on a nation-wide scale. The recent weekly movement in prices was predominantly driven by supply shortfalls at the outset, resulting in retailers looking for any inventory to satisfy buyers. Despite supply shortfalls, which could have been used as an opportunity to capture higher margins, our research and data indicate that short-term windfalls by retailers were not pursued. Rather, retailers seemed disposed to securing new customers and creating a positive experience in the legal markets.


*At an average exchange 1.32 Canadian dollars per U.S. dollar

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

CANNABIS BENCHMARKS WEEKLY REPORT — December 14, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED December 14, 2018

U.S. Cannabis Spot Index up 3.8% to $1,131 per pound.

 

The simple average (non-volume weighted) price increased by $63 to $1,279 per pound, with 68% of transactions (one standard deviation) in the $514 to $2,044 per pound range. The average deal size was nominally unchanged at 4.2 pounds. In grams, the Spot price was $2.49, and the simple average price was $2.82.

 

The relative frequency of trades for indoor flower grew this week, by 2%, while that for greenhouse product decreased by the same proportion. The relative frequency of transactions for outdoor flower was unchanged compared to last week, as was the relative volume of such product. Warehouse-grown flower’s share of the total reported weight moved nationwide increased by over 2% this week, while the relative volume of greenhouse product contracted by the same proportion.    

The U.S. Spot Index jumped by 3.8% this week to settle at $1,131 per pound, the highest national composite price documented since July. While 12 of the 17 state markets covered by our reporting were observed to see week-over-week upticks in their Spot Indices, the overall increase in wholesale pricing at the national level was driven primarily by upward-trending rates in California and Colorado. The latter state’s wholesale market appears to be bucking last year’s trends, which saw prices fall to  what were then record lows to close 2017. Washington State was the only major market to see its composite rate decline this week, the continuation of a recent trend that has resulted in the repeated establishment of new historically low prices.

The national volume-weighted prices for flower to be sold in adult-use and medical markets both increased by magnitudes similar to the U.S. Spot Index this week. In the adult-use realm, only Washington State saw a week-over-week drop in wholesale prices. Most medical cannabis markets covered by our reporting was observed to see rising rates, apart from small declines documented in Arizona, Maine, New Mexico, and Vermont.  

January 2019 Forward up $35 to $1,100 per pound.

 

The average reported forward deal decreased nominally to 57.2 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 53%, 30%, and 17% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 65 pounds, 49 pounds, and 43 pounds, respectively.

 

At $1,100 per pound, the January 2019 Forward represents a discount of 2.7% relative to the current U.S. Spot Price of $1,131 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

    Prices for Indoor and Greenhouse Flower Rise to Highest Points Since April and May, Respectively

  • Colorado

    Spot Index Trended Downward in October as Total Retail Sales Contracted for the Second Consecutive Month

  • Oregon

  • State Data Shows 2018 Harvest Just as Large as Last Year’s, Resulting in Almost 1.3 Million Pounds of Unsold Product in Licensed System as of Early December
  •  
  • Washington

  • Volume-Weighted Price for Indoor Flower Reported to Fall Below $700 Per Pound for the First Time in Any Market
  •  
  • Nevada

  • New Adult-Use Retail Licenses Issued, Nearly Doubling Current Number of Open Shops; Eventual Effect on Wholesale Pricing Contingent on Numerous Factors
  •  
  • Illinois

  • Strong Demand Continues in November, While Wholesale Pricing Holds Steady

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

CANNABIS BENCHMARKS WEEKLY REPORT — December 7, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED December 7, 2018

U.S. Cannabis Spot Index down nominally, by 0.1%, to $1,089 per pound.

 

The simple average (non-volume weighted) price decreased by $8 to $1,216 per pound, with 68% of transactions (one standard deviation) in the $494 to $1,937 per pound range. The average deal size increased nearly 3% to 4.2 pounds from 4.1 pounds last week. In grams, the Spot price was $2.40, and the simple average price was $2.68.

The relative frequency of trades for greenhouse flower increased again this week, by more than 2%. The relative frequency of deals involving indoor product contracted marginally, while that for transactions of outdoor flower decreased by about 2%. Each individual grow type’s share of the total reported weight moved nationally was largely stable week-over-week, although a comparison of the chart below with last week’s shows that the relative volume of greenhouse product grew marginally.  

The U.S. Spot Index slipped marginally this week, by 0.1%, to settle at $1,089 per pound. Declines in Washington State and Nevada, as well as a small decrease in Arizona’s Spot Index, were enough to pull down the national average slightly. Additionally, as we noted last week, Oregon continues to see lower-than-usual trading volume, while that documented in Washington made up a larger proportion of the weight moved nationally than is typical. Overall, the U.S. Spot Index is up by 1.1% quarter-to-date, and has been lifted by rising volume-weighted prices for indoor and outdoor-grown flower. The national going rate for greenhouse product has declined since the outset of Q4, but by less than 1%.

The national volume-weighted price for flower to be sold in adult-use markets continued to climb this week, as rising wholesale rates in Colorado and Oregon outweighed declines in Washington, Nevada, and California’s recreational sector. Increases in rates for flower designated for patients in California, Michigan, Massachusetts, and New Mexico were not enough to push up the national rate for product in medical markets.   

June 2019 Forward assessed at $1,000 per pound.

 

The average reported forward deal increased to 57.6 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 53%, 30%, and 17% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 67 pounds, 49 pounds, and 44 pounds, respectively.

 

At $1,065 per pound, the January 2019 Forward represents a discount of 2.2% relative to the current U.S. Spot Price of $1,089 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 up Almost 9% from Harvest Season Trough in Late October, But Rates for Outdoor Continue to Slide Downward Gradually

  • Colorado

    Composite Price Ascends to Settle Above $900 Per Pound for the First Time Since July

  • Oregon

  • Monthly Average Spot Index for November Up 8% Compared to October’s, as Recovery in Weekly Composite Price Continued This Week
  •  
  • Washington

  • State Spot Index and Prices for Indoor and Greenhouse Flower Fall to Historic Lows for Any Market
  •  
  • New Mexico

  • Production Contracted in Q3, According to State Data, But Dispensaries Increased On-Hand Inventory and Wholesale Pricing Declined
  •  

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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