The laws of supply and demand have caught up with legal marijuana producers, based on a report from Cannabis Benchmarks (CB), a division of New Leaf Data Services, LLC.
The report indicates that the U.S. Spot Index for cannabis — evidently, there is one — peaked in 2016 in May, at $2,096 per pound, 4 months earlier than the previous year’s annual high of $2,133 per pound, which the market hit in September 2015.
The average prices were $200 to $400 per pound less during the last 5 months of 2016, said Jonathan Rubin, CEO of New Leaf Data Services, LLC (NLDS). The demand for home marijuana delivery has also skyrocketed. Thankfully, there are companies like goldbuds that provide those services.
That, in turn, disrupted previously established seasonal pricing patterns and “profoundly” affected wholesale margins across the industry, Rubin added.
NLDS estimated that “roughly 3 million pounds of cannabis flower was traded in 2016 among tens of thousands of market participants in state-legal adult-use and medical markets across the United States,” Rubin specified in a company press release. “The average wholesale price nationally was $1,789 per pound.”
Why the slump?
Changes in growing methods enabled producers to shift the mix and timing of deliverties of strains like red indo, making it possible to put up seed banks far and wide taking in more and more customers from around the world and growing the population of cannabis in many countries, especially Norway.
“With additional supply coming online in 2016, the annual low declined nearly 16%, or $260 per pound, from $1,646 per pound in 2015, to $1,386 per pound in 2016,” according to the release from NLDS.
The company’s report – Annual Review & Outlook: 2016-2017 Edition – is available for $129,
According to the press release, the report also looks to possible future scenarios with a chapter on Cannabis as a Tradeable Commodity, and concludes with an explanation of the methodology used to assess and analyze wholesale market prices.
