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

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

U.S. Cannabis Spot Index up 0.1% to $1,460 per pound. The simple average (non-volume weighted) price was nominally unchanged at $1,663 per pound, with 68% of transactions (one standard deviation) in the $976 to $2,350 per pound range. The average reported deal size increased to 2.1 pounds. In grams, the Spot price was $3.22 and the simple average price was $3.67.

 

The relative frequency of trades for indoor flower decreased by over 1% this week. The relative frequency of deals for outdoor product increased by the same proportion, while that for greenhouse flower was unchanged.

The U.S. Spot Index rose by $1 this week to settle at $1,460 per pound. This is the third consecutive week that the national composite price has established a new annual peak. Yet, the marginal increase documented this week, along with the behavior of wholesale rates at the state level, suggests that the downturn in prices seen customarily at this time of year may yet be in the offing.  

 

California’s Spot saw a significant uptick this week on the back of increases in rates for greenhouse and outdoor product. However, while price trends in the four major Western markets have all generally been on the upswing since this summer, some divergences began to be observed this week. Most notably, the strong, steady climb of Oregon’s Spot was interrupted by a significant decline this week. Meanwhile, positive movement in wholesale rates in Colorado and Washington has leveled off in recent weeks. 

 

Whether the departures from uniformly upward movement in wholesale prices in the major markets will persist remains to be seen. Even as the fall harvest begins to make its way to market in earnest in the weeks ahead, the approach of the Thanksgiving holiday means that wholesale demand will likely increase at the same time. As those who have observed the legal cannabis industry in recent years are aware, retailers now traditionally run “Green Friday” specials on the day after Thanksgiving and so will look to have larger volumes of product on hand to accommodate consumers looking to take advantage of sales and promotions.

The national volume-weighted price for flower to be sold to general consumers declined slightly this week. The downturn was due mainly to a significant drop in wholesale rates in Oregon, although Colorado also saw a small decrease in the price for flower in its adult-use sector.  

 

The national price for medical flower continued its overall upward trend of the past six weeks. A rise in that sector of the market in California, along with upticks in Maine, Massachusetts, Michigan, New Mexico, Rhode Island, and Vermont pushed up the national rate for medical product.

May 2020 Forward initially assessed at $1,455 per pound.

 

The average reported forward deal size increased to 51 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 48%, 36%, and 16% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 53 pounds, 42 pounds, and 61 pounds, respectively.

 

At $1,450 per pound, the December Forward represents a discount of 0.7% relative to the current U.S. Spot Price of $1,460 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Headlines From This Week’s Premium Report:

  • California

  • Prices for Greenhouse & Outdoor Flower Rise to New Annual Peaks, While Rates for Indoor Product Have Slumped in Recent Weeks
  •  
  • Colorado

    State Spot Index Has Plateaued in Recent Weeks, but Reports of Widespread Mold and Yeast Contamination Found in Products at Denver Retailers May Impact Market

  • Oregon

  • Composite Price Experiences its Largest Week-Over-Week Decline of 2019 After Climbing Consistently Since April
  •  
  • Washington

  • Outdoor Flower Prices Continue to Ascend, Up Over 20% From First Week of October
  •  
  • Nevada

  • Total Retail Sales and Those in Adult-Use Market Both Rise to New Record Highs in August, but Exceed Previous Peaks by Only Small Margins

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

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

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