Marijuana Price Tumbles 9% to $1,540 per Pound

For the week ended Friday, October 7, the spot price index for a pound of cannabis decreased 8.7% from $1,687 in the prior week to $1,540. According to the analysts at Cannabis Benchmarks, the simple average price for a gram inched up from $4.13 to $4.19.

The futures price for the near month (November) dropped from $1,525 per pound to $1,500. For the month of December, the forward price remained at $1,625 a pound. The six-month forward price (April) came on the board at $1,815 a pound.

About two-thirds of the past week’s transactions occurred in a range of $1,383 to $2,422 per pound.

This week the analysts commented on forward pricing:

At $1,500 per pound, the November Forward represents a discount of 2.6% relative to the U.S. Spot Index of $1,540 per pound.  While actual prices have been declining since late June, and are anticipated to continue declining through November driven by the surge of supply originating from outdoor growers, forward market participants expect prices to start climbing in December and into 2017.  Despite this price climb in the Forward Curve, on average, buyers and sellers are expecting wholesale prices in April 2017 to fall short of the actual average price observed for April 2016, which was 8% higher (or $161) at $1,976 per pound.  For context, at $2,125 per pound, the actual average price observed for April 2015 was 7.5% higher (or $149) than the April 2016 average.  Thus, while prices are anticipated to rise into the new year, in general, the forward market is expecting average prices to decline year-on-year.

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Implied forward prices are expected to reach their six-month peak in April at $1,815 a pound. The six-month low is expected to be $1,500 in November.

Our price check at MJCharts indicates prices range from $27.19 a gram to a low of $3.50 in the all-cities index. The all-cities index price is $12.43 per gram, unchanged compared with the prior week. The overall average price for a gram of marijuana (all strains) in Colorado is currently $11.41, ranging from a high of $25.00 a gram to a low of $3.50. In California the average price is $15.06 per gram, ranging from $27.19 down to $4.21 per gram, and in Michigan the average price is $13.99 per gram in a range of $25.00 to $5.00. In Oregon the average is $11.35 per gram in a range of $20.00 to $4.00, while in Washington the average is $10.59 per gram, ranging from a high of $21.00 to a low of $4.00.

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