U.S. Cannabis Spot Index — February 15, 2019

U.S. Cannabis Spot Index — Published February 15, 2019

U.S. Cannabis Spot Index up 1.7% at $1,162 per pound.

 

The simple average (non-volume weighted) price decreased by $25 to $1,223 per pound, with 68% of transactions (one standard deviation) in the $425 to $2,020 per pound range. The average reported deal size was nominally unchanged at 3.2 pounds. In grams, the Spot price was $2.56, and the simple average price was $2.70.


The relative frequency of trades for both indoor and outdoor flower increased week-over-week, by 1% each, while transactions involving greenhouse product saw a 2% decline in this metric. Warehouse flower’s share of the total reported weight moved nationwide grew slightly this week, by 1%, with the relative volume of greenhouse product contracting by the same proportion. Outdoor product is the only grow type to see its relative volume exceed its relative frequency of trades.   

The U.S. Spot Index increased by 1.7% this week to settle at $1,162 per pound. Oregon and Arizona were the only sizeable markets to see downturns in their composite prices this week, which were overwhelmed by increases in the Spot Indices of California, Colorado, Washington State, and Nevada. Smaller markets such as Massachusetts, Michigan, Illinois, and Maine have also applied consistent upward pressure on the national volume-weighted average this year. Based on historical sales data from more mature adult-use markets, January and February are typically months that see lulls in sales compared to the higher-demand months of December and March. While the U.S. Spot Index did dip in the latter weeks of January and the early ones of February, this week’s price is virtually identical to the rate of $1,165 per pound, observed at the outset of the year.  

The national volume-weighted price for flower to be sold in adult-use markets jumped this week, primarily due to rises in California, Colorado, Washington, and Nevada. Declines in the medical markets of Arizona and New Mexico pulled down the national price for product designated for registered patients recorded this week, with assistance decreases in the smaller markets of New Hampshire and Vermont.         

March 2019 Forward unchanged at $1,100 per pound.

 

The average reported forward deal size decreased to 49.3 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 55%, 28%, and 17% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 53 pounds, 45 pounds, and 43 pounds, respectively.

 

At $1,100 per pound, the March Forward represents a discount of 5.3% relative to the current U.S. Spot Price of $1,162 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

    Rising Volume-Weighted Prices for Indoor Flower Persist This Week, Now Up by Almost 7% from Beginning of 2019

  • Colorado

    Monthly Sales Increase in December 2018, Total Retail Revenues Reach $1.54 Billion for Last Year

  • Oregon

  • State Spot Index Drops to Within a Few Dollars of Historic Low Established in October 2018
  •  
  • Washington

  • Notable Homogeneity Observed in Pricing of Individual Wholesale Transactions Across All Grow Types
  •  
  • Michigan

  • State Officials Project About $300 Million in Retail Sales from Medical Cannabis Program in Period from October 2018 through September 2019, But Early Revenue Figures Reported to be Low
  •  
  • Illinois

  • Monthly Cultivator Revenues Reach Record High for State’s Market in January 2019 as State Spot Index Continues to Trend Upward

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

15 February 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — February 15, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published February 15, 2019

The CCSI declined 5.4% this week to C$6.04 per gram, from C$6.39 per gram. The index has moved to the lowest point since legalization. C$6.04 per gram equates to US$2,062 per pound at current exchange rates.

 

This week we saw quarterly earnings from the two largest licensed producer, Aurora Cannabis and Canopy Growth. The earning period for both companies end Dec 31st, 2018 cover the first full quarter of legalized Canadian markets. This week, we drill in to the quantity of total dry cannabis sold, and its average net selling price from the top two LPs.

 

Canopy broke out their recreation and medical sales with the addition of recreation sales this quarter. Total volumes of dry and cannabis extract sold increased to 10,102 kg from 2,330 kg reported the previous quarter.  Recreational sales made up 82% of total sales, with dry flower accounting for 62% of total sales. The average net selling prices for dry and cannabis extracts was reported at C$6.96/gram, while medical averaged C$8.49/gram.



Aurora Cannabis kept their numbers at a higher level by lumping medical and recreational sales together. Aurora Cannabis produced 7,822 kg over the quarter with 6,999 kg sold. Digging into the Management Discussion & Analysis we managed to find total recreational dry cannabis sold was 3,500 kg and total cannabis extracts was 306 kg, suggesting that 54% of their production was sold into the newly legalized market. The average net selling prices for dry and cannabis extracts for both the medical and recreational markets was reported to be C$6.23/gram.

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

15 February 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — February 8, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published February 8, 2019

The CCSI moved 2.2% lower this week to C$6.39 per gram, from C$6.53 per gram. The index looks to have found its sweet spot within a narrow C$0.28 range. C$6.39 per gram equates to US$2,196 per pound at current exchange rates.

 

This week we take a deeper look at the final price consumers are paying for dry cannabis products. Each provincial retail structure is set up slightly differently, but ultimately consumers purchase recreational cannabis in pre-rolls or canisters. Unlike products sold in the U.S., Canadian cannabis packaging enforces strict volume and labelling guidelines. The canisters are mainly sold in one gram, 3.5 gram, and 7 gram increments with a strict labelling protocol that includes the producer’s brand, strain information and Health Canada warning labels. Many of the recent supply issues have been attributed to faulty packaging.

For this week’s analysis, we specifically focussed in on the retail price of 14 out of the 80 listed dry cannabis products on the Ontario Cannabis Store (https://ocs.ca/). We chose a variety of products from different licensed producers (LP), varying THC and CBD levels, and assorted flower types (Sativa, Indica, or Hybrids).

 

Of the 14 products, the calculated average selling price for one gram was C$11.66 (inclusive of the 13% retail sales tax) with a range of C$9.25 to C$17.25.

Source: Cannabis Benchmarks, Ontario Cannabis Store

Using our in-house pricing models, we were able to back calculate the average LP’s selling price to C$6.72/gram. This falls roughly inline with the posted CCSI price over the past 7 weeks. Here are the components of our pricing model:

Lastly, we looked at the volume discount customers are given when they buy quantities larger than one gram. For many of the 14 products we analyzed, there were prices listed but no product available in those larger quantities.

 

As can be seen in the chart below, the discount was almost standardized as consumers purchased larger quantities with a 4.9% discount when customer purchased 3.5g, and 9.7% discount when customers purchased 7g.

Source: Cannabis Benchmarks, Ontario Cannabis Store

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

1 February 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — February 8, 2019

U.S. Cannabis Spot Index — Published February 8, 2019

U.S. Cannabis Spot Index down 1.4% at $1,142 per pound.

 

The simple average (non-volume weighted) price decreased by $8 to $1,248 per pound, with 68% of transactions (one standard deviation) in the $429 to $2,067 per pound range. The average reported deal size declined to 3.2 pounds this week from 3.3 pounds last week. In grams, the Spot price was $2.52, and the simple average price was $2.75.


The relative frequency of trades for outdoor flower increased week-over-week, by almost 2%, while transactions involving indoor and greenhouse product each saw an almost 1% decline in this metric. Similar movement was observed in regard to the relative volumes of the three grow types: That for outdoor flower expanded by 2% compared to last week, while warehouse and greenhouse product’s shares of the total reported weight moved each contracted by 1%.  

The U.S. Spot Index slipped by 1.4% this week to settle at $1,142 per pound. Although several mid-sized markets saw notable increases in their Spot Indices this week – including Massachusetts and Illinois – that upward price pressure was overwhelmed by declines in the composite rates of California, Colorado, and Oregon, with the West Coast markets just mentioned each seeing decreases of over $30 compared to last week. As of this week, the tug-of-war between the upward-trending national price for warehouse flower and the slowly-sliding U.S. averages for greenhouse and outdoor product saw the latter gain the upper hand. Elevated rates in California have for the time being buoyed the national price for indoor flower against sliding prices for such product in Colorado and Oregon this year.

The Trailing 4-Week Average of the U.S. Spot Index persisted this week in the very gradual downward slide that has so far marked 2019, though its negative momentum accelerated somewhat this week. At the moment, the national average is being pulled down by declines in the trend lines of the Spot Indices of California and Oregon. Nevada’s Trailing 4-Week Average price also applying negative pressure, even as sales in the Silver State appear to be growing, at least as of late last year, as we discuss below. The trend line of Michigan’s Spot Index continued to rise this week, as more product recalls likely have buyers looking for inventory that they can be assured will not run afoul of regulators, despite being technically allowed to sell untested product.       

March 2019 Forward unchanged at $1,100 per pound.

 

The average reported forward deal size decreased to 53.8 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 56%, 28%, and 15% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 60 pounds, 48 pounds, and 43 pounds, respectively.

 

At $1,100 per pound, the March Forward represents a discount of 3.7% relative to the current U.S. Spot Price of $1,142 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

    BCC Data Provides Glimpse of Volume of Flower Traded in California’s Licensed System from July 2018 through January 2019

  • Colorado

    State Spot Index Sees Small Week-Over-Week Decline, First Downward Movement Since Early November 2018

  • Oregon

  • OLCC’s Supply & Demand Report Contains Insights on Inventory Management by License Type
  •  
  • Washington

  • LCB Reminds Producer / Processors that Volume Discounting in Deals with Retailers is Prohibited
  •  
  • Nevada

  • Cumulative and Adult-Use Sales Both Reach New Record Highs for State’s Market in November 2018, but Stable Spot Index Indicates Sufficient Supply
  •  

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

8 February 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — February 1, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published February 1, 2019

 

The CCSI moved 2.6% higher this week to C$6.53 per gram, from C$6.35 per gram. The index continues to fluctuate within a narrow C$0.28 range. C$6.53 per gram equates to US$2,240 per pound at current exchange rates.

 

On January 29th, Health Canada released another snapshot of the preliminary data on sales, finished inventory and unfinished inventory with December 2018 included. This data is released as part of the Cannabis Tracking System instituted by the Canadian government to ensure illegal supply does not cross into legalized markets. This data set is important for many reasons, but primarily to give industry participants a look at the fundamentals of non-medical cannabis sales in Canada.

 

With three full months of operation behind us we have more data on consumer habits and inventory. Let’s start by looking at total non-medical sales. From the report we see that total recreational sales in December grew by 5% or to 7,252 kg, but that is not actually the case because December has 31 days. When we normalize for the number of days in each month, sales are essentially flat, more clearly showing Canada currently consumes approximately 232 kg per day.

 

Next let’s look at the Inventory on hand. The reported amount of finished dried cannabis inventory, or product that is ready of sale, as of the end of December was 19,085 kg, or 2.7x the total dried cannabis actually sold on average during November and December to medical and non-medical customers. Perhaps more thought provoking is the December end of month unfinished dried cannabis inventory, or product that has been cultivated but not packaged or labelled. This inventory sits at 109,236 kg of dried cannabis or 15x the total dried cannabis actually sold on average during November and December to medical and non-medical customers. Lets ask the same question again: Is there really a supply shortage?

This dataset is released every two weeks, and its labelled as “Preliminary”; therefore we want to discuss how much the October and November data changed. The table below gives the full comparison, but in this report we focus on a couple of the big moving factors.

 

First to note is the total medical sales in November dropped by 1,922 kg. This could be a result of a consumers that have a medical prescription procuring product from the non-medical sector.

 

The next piece of information that has changed is the finished inventory ready for sale. The end of month volume held by Federally licensed holders dropped by 4,785 kg in November. Simultaneously, the unfinished end of month inventory held by Federally licensed holders jumped by similar amount or 4,470 kg. Our quick take is that product that was assumed to be ready for sale in fact was not quite ready.

With each release of the report we will continuously assess data and highlight the changes.

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

1 February 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — February 1, 2019

U.S. Cannabis Spot Index — Published February 1, 2019

U.S. Cannabis Spot Index up nominally 0.2% at $1,159 per pound.

 

The simple average (non-volume weighted) price increased by $3 to $1,256 per pound, with 68% of transactions (one standard deviation) in the $458 to $2,054 per pound range. The average reported deal size declined to 3.3 pounds this week from 3.4 pounds last week. In grams, the Spot price was $2.56, and the simple average price was $2.77.

 

National Transaction Stats were very stable week-over-week to begin February. Indeed, they were virtually unchanged from the week prior. Stability in the metrics illustrated in the chart below likely stems in large part from the general abundance of wholesale flower available in the major markets, along with the maturation of adult-use systems in some of those states. With plentiful inventory and greater understanding of sales trends, buyers do not feel compelled to snap up new harvests as soon as they come down and are less likely to be caught off guard by surges in demand.

The U.S. Spot Index held fairly steady this week, inching upward by $2 to settle at $1,159 per pound. Elevated rates for indoor-grown flower in California helped lift the national volume-weighted price for such product, which buoyed the U.S. composite rate against declines in prices for sun-grown flower. From a state-level perspective, positive trends in wholesale prices in Colorado, the country’s second-largest legal market, have been providing consistent upward pressure on the U.S. Spot Index through the early weeks of this year. Meanwhile, the newer adult-use markets of Nevada and Alaska appear as if consistent declines could be in the offing, though the opening of more storefronts and consolidation in the former later this year may disrupt current trends.

The national volume-weighted price for flower to be sold in adult-use markets increased again this week. Rising rates in that sector of the market in California, as well as in Colorado, Washington, and Massachusetts outweighed declines in Oregon, Nevada, and Alaska. For the second straight week, decreasing wholesale rates in the medical section of California’s market pulled down the national price for product designated for registered patients recorded this week.      

August 2019 Forward initially assessed at $1,015 per pound.

 

The average reported forward deal size decreased to 54.5 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 57%, 27%, and 16% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 60 pounds, 49 pounds, and 43 pounds, respectively.

 

The August Forward represents a decrease of 1% relative to the July Forward. For context, the U.S. Spot Index declined 2.0% from July to August in 2017 – from $1,614 to $1,582 per pound – and by 2.6% in the same span in 2018 – from $1,147 to $1,117 per pound.

 

At $1,100 per pound, the March Forward represents a discount of 5% relative to the current U.S. Spot Price of $1,159 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 Treasurer and Legislator Introduce Plan to Lower Taxes and Stimulate Licensed Market, But its Passage into Law and Ultimate Impact Uncertain

  • Colorado

    Upward Trend in Wholesale Prices That Closed 2018 Continued Through January, But Pace of Increase Slowed

  • Oregon

  • Monthly Average Price for Indoor Flower in January was Lowest in State’s History at Less Than $900 Per Pound
  •  
  • Washington

  • Monthly Spot Index Rose by 2% in January; First Increase Since August 2018
  •  
  • Nevada

  • Cultivators See Almost 20% Decrease in Wholesale Excise Tax on Flower for H1 2019 Compared to Second Half of 2018
  •  
  • Florida

  • New Governor, State Lawmakers Suggest that Vertical Integration Requirement and License Caps May be Addressed this Year

Are you a licensed market participant in the U.S. or Canada? 

Do you support wholesale market transparency?

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

1 February 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved