CANADA CANNABIS SPOT INDEX — April 19, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published April 19, 2019

The CCSI moved lower by 5.9% to C$6.69 per gram, from last week’s C$7.11 per gram. This week’s price equates to US$2,272 per pound at current exchange rates.

 

This week Health Canada released their preliminary summary of February sales data from the Cannabis Tracking System. In our analysis below, we focus on sales of non-medical dry cannabis and oil, which have proven to be weaker than anticipated. In the last month many provinces have restated their cannabis revenue projections for 2019, adjusting them downward due to a flourishing black market with lower prices and more product variety.

 

The reports are labelled as preliminary, therefore data from the past months are adjusted with each release. In the most recent report, January sales for non-medical dry cannabis were restated higher by 8 kg/day, resulting in average daily sales of 179 kg for the month. Preliminary February sales figures came closely in line with both December and January at 178 kg/d.

Also in the most recent report, January sales of cannabis oil were restated higher by 2 litres/d, for an average daily sales of 95 litres. February sales figures came slightly lower than January at 91 litres/d.

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

19 April 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

CANADA CANNABIS SPOT INDEX — April 12, 2019

CANADA CANNABIS SPOT INDEX (CCSI) 

Published April 12, 2019

The CCSI moved higher by 2.5% to C$7.11 per gram, from last week’s C$6.94 per gram. This week’s price equates to US$2,418 per pound at current exchange rates.

 

The hype around cannabis legalization and the tax revenues that would pour into federal and provincial coffers seems to be slowly fading. Several provinces are restating their future revenue projections from this highly publicized new source of tax revenue.

 

The Ontario budget, released on Thursday, gave some new insight into the current state of the legal cannabis market in the province. Ontario, with 38% of the country’s population and an estimated 1.8 million cannabis users, cut their projected revenue from cannabis excise taxes to C$80 million from C$115 million for the 2019-2020 fiscal year. The cut reflects a black market still thriving due to volatile supply, limited retail locations, and higher than expected prices at the counter in the legal market. In reaction to the revised budget, Ontario politicians are engaging more deeply with Premier Doug Ford’s government and introducing changes to how cannabis is sold across the province to increase sales in the legal market.

 

The U.S. is closely monitoring the evolution of these markets in Canada and the Canadian case study could play a formative role in how some states move forward.

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

12 April 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved

U.S. Cannabis Spot Index — April 12, 2019

U.S. Cannabis Spot Index — Published April 12, 2019

U.S. Cannabis Spot Index up 0.3% to $1,068 per pound.

 

The simple average (non-volume weighted) price increased $53 to $1,161 per pound, with 68% of transactions (one standard deviation) in the $389 to $1,932 per pound range. The average reported deal size increased to 2.9 pounds from 2.7 pounds last week. In grams, the Spot price was $2.36 and the simple average price was $2.56.

 

The relative frequency of trades for indoor flower increased week-over-week by 4%. The relative frequency of transactions involving greenhouse and outdoor product decreased by 1% and 3%, respectively. Greenhouse product’s share of the total reported weight moved nationwide contracted by 2% relative to last week. The relative volumes of warehouse and outdoor flower both increased by 1% each. National relative volumes one year ago at this time were observed at 53%, 29%, and 18%, for indoor, greenhouse, and outdoor product, respectively.  

The U.S. Spot Index ticked upward marginally this week, by $2, to settle at $1,068 per pound, recovering slightly from last week’s current annual low. Relative steadiness in the Spot Indices of California and Washington helped to offset declines in Colorado and Oregon, while rising rates in Nevada, Michigan, New Mexico, and Alaska, among others, ultimately pushed the national composite price up a bit. Last year at this time – a week ahead of 4/20 – the U.S. Spot Index slipped by 1.4%, from $1,386 to $1,367 per pound, although it must be noted that it had previously trended upward from mid-February through early April. This week’s national composite price is off by 22% year-over-year, maintaining the overall rate of decline observed in annual average prices from 2017 to 2018, which was 23%.

The national volume-weighted price for flower to be sold in adult-use markets rose slightly this week on significant increases in the Spot Indices of Nevada and Alaska, as well as a modest uptick in Washington’s composite price. Rising prices for medical product in Illinois, Michigan, and New Mexico, as well as a couple other smaller markets, were primarily responsible for pushing up the national rate for flower to be sold to patients.    

May 2019 Forward unchanged at $1,050 per pound.

 

The average reported forward deal size declined to 44 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 60%, 28%, and 12% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 41 pounds, 49 pounds, and 44 pounds, respectively.

 

At $1,050 per pound, the May Forward represents a discount of 1.7% relative to the current U.S. Spot Price of $1,068 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

    Volume-Weighted Prices for Product in Adult-Use Sector Reported to Fall Sharply for Second Consecutive Week

  • Colorado

    Monthly Retail Sales Slip for Second Straight Month in February, But Year-Over-Year Revenue Growth Stands at Almost 14% Through First Two Months of 2019

  • Oregon

  • State Spot Index Drops to All-Time Low for Any Market, Settling Below $500 Per Pound This Week
  •  
  • Washington

  • Analysis of Raw Transaction Data Shows Compression of Wholesale Prices Across All Grow Types, Particularly Indoor and Outdoor Flower
  •  
  • Nevada

  • Retail Demand in January 2019 Comparable to That Reported for Q4 2018; Wholesale Prices Also Showed Steadiness in Opening Month of This Year
  •  
  • Massachusetts

  • Adult-Use Revenues Grew Almost 35% from February to March, Medical Sales Volume Up 12% in Same Period; Yet State Spot Index Stabilized in Latter Month, Suggesting Production is Catching Up to Demand

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

12 April 2019.  Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved