U.S. Wholesale Cannabis Price Erosion Continues

CONNECTICUT: Cannabis Benchmarks, a division of New Leaf Data Services, LLC has released its Annual Review & Outlook: 2017-2018 Edition. The Report provides in-depth analysis of wholesale price movements in 2017 across legal cannabis markets, presenting an unparalleled picture of the supply side of one of the country’s most dynamic industries, and is now available for purchase at Annual Review & Outlook.

“2017 was marked by a continuation of generally low prices, relative stability through the first three quarters of the year, and a traditional fourth quarter decline driven by a favorable outdoor growing season and robust fall harvest in major West Coast markets,” said Jonathan Rubin, CEO of New Leaf Data Services. “The seasonal impact of the fall harvest remains undeniable, driving prices to their annual low in November the last two years.”

Despite the establishment of historically low wholesale prices on both the national and state levels, the rate of decline documented in 2016 was tempered in 2017. Over the course of 2017, the U.S. Spot Index declined 6% in 2017 as compared to a 20% decline in 2016, with the Index opening 2017 at $1,532 per pound and closing the year at $1,436 per pound. In 2017, the U.S. Spot Index averaged $1,562 per pound, off 12.7% from 2016’s full-year average price.

Other takeaways from the Report include continued growth in the total size of the country’s wholesale cannabis flower market to 3.7 million pounds, up 22% compared to 2016, but lower prices in states with mature adult-use legalization due to more licenses and expanded production. The result is that major markets are becoming increasingly competitive, with licensed businesses vying fiercely for market share and consumer attention, forcing producers to implement efficiencies in cultivation and product manufacturing to compete and stay afloat.


The Hemp CBD Market Projected To Surge

NEW YORK: According to a recent report by New Frontier Data, the Viridian Cannabis Stock Index gained 236.1% in 2016 and outperforming such mainstream indexes as the Russell 2000 (up 19.5%), the Dow Jones Industrial Average (up 13.4%), the S&P 500 (up 9.5%), and the Nasdaq composite (up 7.5%). New Frontier Data also reported that legal cannabis sales in California alone are projected to reach $2.8 billion in 2017 and $6.6 billion by 2025, with a compound annual growth rate of 12% over the next eight years. Medical cannabis products are now legal in 29 states and Washington DC.

A significant portion of the total legal cannabis market is the CBD market. Cannabidiol (CBD) is the part of the cannabis plant that is usually used for medical purposes, and is a natural component of industrial cannabis or hemp. Growth of the medical cannabis market is expected to accelerate as the products become more popular treatments for various medical applications such as chronic pain, post-traumatic stress disorder (PTSD), sleep disorders, anxiety, nerve pain and others.

Bethany Gomez, the Director of Research at Brightfield Group said, “Essentially everyone is trying to do hemp, but only a handful are doing it well. It’s seen as easy because it can be sold online but, with restrictions on traditional marketing, it is very difficult to connect with your core consumer and even communicate why they need your product,” Forbes reported.