U.S. Cannabis Spot Index up 1.1% to $1,457 per pound.
The simple average (non-volume weighted) price increased $5 to $1,637 per pound, with 68% of transactions (one standard deviation) in the $905 to $2,370 per pound range. The average reported deal size decreased to 1.9 pounds. In grams, the Spot price was $3.21 and the simple average price was $3.61.
The relative frequency of trades for indoor flower increased by 8% this week. The relative frequency of deals for greenhouse and outdoor product both decreased, by 6% and 2%, respectively.
Warehouse product’s share of the total reported weight moved nationally expanded by 6% this week. The relative volumes of greenhouse and outdoor flower each contracted by 3%.
The U.S. Spot Index rose by 1.1% this week to settle at $1,457 per pound. The national composite price has trended upward to start 2020, with this week’s rate representing an increase of 4.3% from the start of the year. This week’s U.S. Spot is also just $7 below 2019’s annual peak, which was documented in the week ending November 15.
Overall wholesale flower prices in three of the country’s four largest markets – California, Colorado, and Oregon – have been fairly stable in recent weeks. Upward pressure on the national composite rate has come from Washington State and Nevada, as well as the newer adult-use systems in Massachusetts, Michigan, and Illinois. The opening of those states’ markets to general consumers has also pushed up prices for flower designated as medical, particularly in Illinois this week.
Looking ahead a few weeks, historical sales data out of established markets has shown that March is typically the month that sees the strongest demand in Q1, and sometimes for the first half of a year. Retailers in the major markets may look to bring in additional inventory in the coming weeks, which could result in upward pressure on wholesale prices in states where they have been fairly steady.
August Forward initially assessed at $1,455 per pound.
The average reported forward deal size was 42 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower was 47%, 36%, and 17% of forward arrangements, respectively. The average forward deal sizes for monthly delivery for outdoor, greenhouse, and indoor-grown flower were 48 pounds, 32 pounds, and 41 pounds, respectively.
At $1,475 per pound, the March Forward represents a premium of 1.2% relative to the current U.S. Spot Price of $1,457 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
Proportion of Total Product Batches Tested Constituted by Vapes & Extracts Reached Almost 39% in Q4 2019, Up from 31% in Q3 2018
Oregon
Official Data Shows About 30% of Flower and Trim is Going to Waste
Michigan
Adult-Use Sales Increased Significantly in January, Indicating Loosening Supply and More Retail Outlets Opening
Illinois
January Adult-Use Sales Top $39 Million as Wholesale Prices Climb; Rates for Medical Flower More Expensive than Adult-Use by About $340 Per Pound