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Cannabis Benchmarks US Wholesale Cannabis Spot Index & Report for July 28

U.S. Cannabis Spot Index up 2.8% to $1,626 per pound. 

The simple average (non-volume weighted) price increased $65 to $1,886 per pound, with 68% of transactions (one standard deviation) in the $1,040 to $2,732 per pound range. The average deal size increased 2.1% to 8.1 pounds from 7.9 pounds last week. In grams, the Spot price was $3.59, and the simple average price was $4.16.

The influence of greenhouse product on the nation’s overall volume-weighted average subsided further this week. After the relative volume of such flower contracted by 6% last week, it did so again by the same proportion this week. The majority of the corresponding gain accrued to outdoor-grown product, despite the relative frequency of transactions for that grow type decreasing slightly. Overall, though, the relative frequency of deals for each grow type was mostly unchanged from last week.  

After increasing its influence on the overall composite price last week, greenhouse flower maintained its over two-thirds share of the total observed volume traded this week, even as the relative frequency of trades for such product declined slightly. The overall average deal size in Washington State shrank this week to 13.3 pounds, from 15.3 last week. Average deal sizes for each grow type documented this week in Washington’s market were on the decline as well; that for greenhouse flower was down by just over 2 pounds compared to last week, while the average deal size for indoor product contracted by 1.5 pounds. 
Like Colorado, the only other state with an established, regulated commercial market for cannabis that is open to the general public, Washington State has added producers and plant canopy continually since the outset of adult-use sales. However, it has done so in a drastically different manner, which likely goes a long way toward explaining the much smaller year-over-year drop in rates in the two markets. As noted, Washington State has seen more producers come online in each of the three years that the adult-use market has been open; however, they were all licensed in the first application period prior to the commencement of sales in July 2014, with no new licenses issued since then. By contrast, Colorado granted licenses initially to medical cannabis operations in good standing, and continues to issue cultivation licenses with no state-level restrictions to this day. Furthermore, Washington State licensees are limited to 30,000 square feet of canopy at most, while Colorado growers can continually increase their plant count, assuming that they can demonstrate to the licensing authority that they are selling all of their production legally and expansion is required. Overall, Washington regulators have taken a more command-and-control approach to their state’s market, relative to the fairly open licensing policies of Colorado.  
Posted in Other on July 31 at 06:37 PM

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