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

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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

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