California, Colorado Marijuana Spot Indexes Hit New Lows

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The price of marijuana on the spot market is hitting new lows for this time of year in a sharp departure from prior trends. Last year at this time prices were reaching new highs as supplies dwindled in advance of the fall harvest. This year, according to the analysts at Cannabis Benchmarks, spot prices are falling, with greenhouse-grown flower dipping below $1,600 a pound last week. Last year the nationwide rate for a pound of cannabis flower rose to $2,133 a pound between August 14 and September 11.

For the year to date, the spot price for marijuana has averaged $1,914 a pound, compared with last week’s average of $1,637 per pound. The forward price for October delivery dropped by $25 a pound last week to $1,525. The November forward also fell $25 to $1,500, and the six-month forward (March 2017) was set at $1,750.

Greenhouse-grown flower hit a year-to-date low of $1,405 per pound last week, $664 below its high of $2,069 in June. Spot sales volumes for greenhouse-grown flower ranged between one and 210 pounds, with an average size of 52.4 pounds, up 8% week over week.

Spot prices were down sharply in both California and Colorado. Cannabis Benchmarks noted:

California’s market saw a 13% reduction in its overall weighted average price, decreasing to a year-to-date low of $1,457 per pound. The California Spot Index is off $419 from its January 8th high of $1,876 per pound. This drop was driven by a higher proportion of lower-priced outdoor flower — even though outdoor farmers saw prices for their flower jump just over 10% — combined with sharp decreases in rates for indoor and greenhouse product.

Colorado prices also declined to new lows. The Colorado Spot Index (the aggregate weighted price inclusive of all grow types) declined 8% to $1,430 per pound, a year-to-date low for the state, which last year at this time was seeing overall rates settle at just under $2,100 per pound. The price for indoor flower in Colorado also hit a yearly low, settling at $1,490 per pound; off $770 from the high of $2,260 per pound reached on January 29th.

A recent spate of colder weather in northern California and southern Oregon has led to speculation that the harvest could be down by as much as 20%, but that dent in production is estimated based on a much larger harvest size resulting from new or expanded growing operations.