U.S. Cannabis Spot Index — April 5, 2019

U.S. Cannabis Spot Index — Published April 5, 2019

U.S. Cannabis Spot Index down 2.0% to $1,066 per pound.

 

The simple average (non-volume weighted) price decreased nearly $10 to $1,108 per pound, with 68% of transactions (one standard deviation) in the $369 to $1,846 per pound range. The average reported deal size was nominally unchanged at 2.7 pounds. In grams, the Spot price was $2.35 and the simple average price was $2.44.


The relative frequency of trades for indoor flower decreased week-over-week by 1%. The relative frequency of transactions involving outdoor product increased by the same proportion, while that for deals involving greenhouse flower was flat. Greenhouse product’s share of the total reported weight moved nationwide increased by 3% relative to last week. The relative volumes of warehouse and outdoor flower both contracted, by 2% and 1%, respectively.   

The U.S. Spot Index declined by 2% this week, resuming the downward trend that commenced in mid-February and sliding to a year-to-date low of $1,066 per pound. The five largest adult-use markets – California, Colorado, Oregon, Washington, and Nevada – all saw their composite prices decrease this week. Notably, reported wholesale rates in California remain relatively stable, despite some market observers sounding the alarm regarding the expiration of temporary cultivation licenses, a matter we discuss below in more detail. This week also saw several markets that have seen rising prices for much of this year experience declines, namely Illinois, Rhode Island, and Washington, D.C. With just two weeks to go ahead of 4/20, it appears that the holiday will not result in discernible upward movement in the national composite rate, as it has in previous years.

The national volume-weighted price for flower to be sold in adult-use markets declined this week on decreases in all four of the major Western markets, as well as Nevada and Alaska. Rising prices for medical product in Maine, Michigan, and Massachusetts were primarily responsible for pushing up the national rate for flower to be sold to patients.   

October 2019 Forward initially assessed at $975 per pound.

 

The average reported forward deal size declined to 45 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 59%, 29%, and 12% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 42 pounds, 49 pounds, and 44 pounds, respectively.

 

The October 2019 Forward was assessed at $975 per pound, 3.9% lower than the September Forward of $1,015 per pound. For context, the U.S. Spot Index averaged $1,117 in September 2018 and declined 3.7% to $1,076 in October 2018.

 

 

At $1,050 per pound, the May Forward represents a discount of 1.5% relative to the current U.S. Spot Price of $1,066 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

    Regulators Announce Intent to Issue Provisional Licenses as Temporary Permits Expire in Attempt to Avoid Market Disruption

  • Colorado

    Wholesale Prices Continued to Rise in Q1 2019, But Upward Momentum Slowed in March

  • Oregon

  • Falling Prices for Indoor and Greenhouse Flower, Increasing Relative Volume of Inexpensive Outdoor Product, Pulled State Spot Index to Historic Lows in Q1
  •  
  • Washington

  • Despite Price Rises Early This Year, Quarterly Average Spot Price for Q1 2019 Nearly Identical to Q4 2018’s Mean
  •  
  • Michigan

  • March 31st Licensing Deadline Goes Unenforced Due to Lawsuits Brought Against the State
  •  
  • Rhode Island

  • State Spot Index Up This Year as Sales and Patient Counts Grow, But New Cultivators Coming Online Could Provide Downward Pressure on Prices

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

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

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