Legal cannabis is a protean market that reacts to internal factors affecting individual cultivators, as well as external factors from the evolving regulatory landscape. Like other commodities, cannabis is subject to price fluctuations prompted by such factors.
Because price fluctuations can affect the entire cannabis vertical, Cannabis Benchmarks, a provider of cultivation production cost data and standardized wholesale price benchmarks, wants to help market participants make more informed decisions with its cultivator cost data and wholesale prices. And it began doing so by releasing its first weekly report on U.S. Spot and Forward wholesale cannabis price assessments on April 24, 2015.
The ability to harness the current per pound price of cannabis versus the future per pound price of cannabis allows market participants to make informed decisions; however, considering legalization is happening on a state-by-stay basis, state-specific data can empower decision-making by providing a guide for buyers and sellers to transact within a specific state.
While Cannabis Benchmarks’ regular weekly report provides the U.S. Spot and Forward wholesale cannabis price assessments, the Premium Report, announced on Feb. 2, 2016, adds to this by providing state-level spot indices, prices by type of cultivation, editorial commentary and analysis and access to proprietary archives.
Adding to the national price assessments, the Premium Report covers the spot and forward wholesale cannabis price assessments for all of the major state markets, including California, Colorado, Oregon and Washington, with each state’s spot price broken down by grow type, i.e., greenhouse, indoor or outdoor, paired with an average weighted price; for example, according to the Premium Report from Jan. 29,
The volume weighted average price in Washington was $1,716 per pound (or $3.78 per gram), down $44 or 3% from $1,760 per pound last week. The average reported deal size increased to 14 pounds from 13 pounds last week. The simple average price for outdoor, greenhouse and indoor grown was $1,525, $1,733 and $1,910 per pound, respectively.
The Premium Report also covers some of the fledgling state markets, including Connecticut, Illinois, Nevada, Massachusetts, Arizona, Rhode Island and Washington, D.C. Comparing the numbers from coast to coast provides an interesting perspective on how diverse each state’s market can be; for example, the Premium Report from Jan. 29 noted, “Prices in Washington, D.C. averaged $3,000 per pound (or $6.61 per gram), down $208 or 6% from $3,208 last week. The average deal size was 10 pounds.”
Ian Laird, CFO of Cannabis Benchmarks, explained, “As the legal cannabis market continues its rapid growth, the expanding volume of transactions and investment opportunities demand more detailed and reliable pricing information.”