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Wholesale cannabis prices hit historic lows in January

Discussion in 'General Marijuana Growing' started by vostok, Jan 26, 2018.

  1.  
    vostok

    vostok Well-Known Member

    [​IMG]
    The price of a pound of legal marijuana plummeted in January,

    according to a new report tracking the commodity’s U.S. spot price index.

    The first month of 2018 has been marked by uncertainty in the cannabis industry after U.S.

    Attorney General Jeff Sessions rescinded Obama-era guidance on marijuana enforcement.

    But analysts at Cannabis Benchmarks, an independent price reporting agency,

    said that the policy shift has not yet had a major impact on legal cannabis prices nationwide.

    Instead, an overabundance of cannabis sent wholesale prices into a free fall, the firm reported.

    The U.S. spot index for cannabis last week stood at a national average of $1,292 per pound,

    a 3.5% decline compared to the week prior, according to Cannabis Benchmarks.

    Similar to commodities like gold and oil, the Denver-based independent price reporting agency

    tracks spot prices — the current value in the marketplace at which an asset can be bought

    or sold for immediate delivery.

    [​IMG]

    The overall drop in pot prices “was driven primarily by significant week-over-week decline in

    wholesale rates in Oregon, though most of the major Western markets saw decreases

    in their composite prices, with Colorado the only exception,” the report said.

    Prices were also dragged down by Washington state, where they fell to $1,004 per pound,

    the lowest price Cannabis Benchmarks has seen in three years of reporting.

    Demand for legal pot leveled off in some of the mature cannabis markets during the second

    half of 2017, report author Adam Koh told The Cannabist.

    While there may still be some growth in those markets, expect the downward trend in prices to

    continue through the first quarter of 2018, he said.

    The firm’s data indicates that thus far, Sessions’ marijuana moves have not had a

    noticeable effect on cannabis prices, Koh said.

    “There hasn’t been any sort of material alteration to supply and demand stemming from the

    Sessions announcement,” he said.

    “The way it could possibly affect the market is if businesses were actually raided or shut down.

    Then you might have people unwilling to trade wholesale. Obviously a dispensary wouldn’t to

    want to take in inventory if there was a credible threat of being raided

    with significant amounts of cannabis on hand.”

    Cannabis is not any more federally illegal today than it was prior to Sessions’ Jan. 4

    announcement, Koh added. In his view, until some sort of federal cannabis crackdown takes

    place, few state-legal cannabis companies will be inclined to flee the market.

    This year also began with the legalization of adult-use cannabis in California, the largest

    economy in the country — and the sixth largest economy in the world.

    But how California’s entry into the legal cannabis market will affect cannabis prices in 2018

    remains uncertain, in part because it has an “entrenched” informal marijuana market, Koh said.

    Last October, Cannabis Benchmarks analysts estimated that only a “small fraction” of

    commercial cannabis transactions during 2018 will take place within the

    licensed marketplace, citing the state’s vast black market.

    “It makes it very difficult to project, because it’s really been its own animal,” Koh said.

    “But I think California regulators…they have definitely taken lessons from other states in

    terms of certain allowances and things that businesses are able to do, so as not to

    cause immediate (price) disruptions like we’ve seen with some of the

    roll-out of recreational sales in other states.”

    [​IMG]

    The Golden State’s best efforts might not be enough to prevent market disruptions

    in spring and early summer when most of the its current cannabis business licenses expire,

    he said. Starting in May, officials will not only be dealing with those expiring licenses,

    but also with the issuance of new annual license.

    Another issue for cannabis prices in California: Stricter testing of legal cannabis goes

    into effect there starting July 1.

    Cannabis Benchmarks analysts think it’s possible that growers will work to move product

    ahead of that prior to more strict testing going into effect,” Koh said.

    “A lot will depend on how supply chain comes together as more growers get licensed

    and more product is manufactured and extractors become licensed,” he said.

    “Will the testing labs be able to keep up? Right now retailers are selling their

    existing inventory, while testing is not as strict as it will be.”

    (https://www.thecannabist.co/2018/01/25/marijuana-prices-national-wholesale/97244/)
     
    Last edited: Jan 26, 2018
    Canadian Farmer and elfo777 like this.
  2.  
    fearnoevil

    fearnoevil Well-Known Member

    Yeah, I've thought about this for a while now, and I honestly think legalization is going to drive prices down for the foreseeable future. If it becomes recreational legal in most states over the next decade, I wouldn't be surprised to see the price of a pound drop to a few hundred dollars, such is the double-edged sword of legalization. Great for smokers, not great for growers.

    I assume there's a price point where it becomes unprofitable for growers which will then create an equalibrium, I don't know what that is but if it's less than $500 a pound for all but the highest top shelf bud, life is going to suck for small growers (and there goes my plan to retire and just grow weed in my old age, lol).

    Seriously, I even believe that there's the possibility that we could see BIG companies, like say RJ Renolds, come in once the market is matured, building massive operations and cranking out packs of Marlboro Green or Camel Kush you can pick up at the liquor store in the not too distant future.

    With legalization, growing your own marijuana is a trend that is only going to increase exponentially, not that everyone will be able to grow fire, but enough that the price for an ounce of killer bud will probably drop to $75-$100 within the next 7-10 years. Talk about a buzz kill, lol.
     
  3.  
    xtsho

    xtsho Well-Known Member

    The prices have not reached bottom yet. It's a buyers market in Portland. Same thing across the river in Vancouver Washington. The amount of dispensaries is insane.

    In Oregon

    418: Registered medical marijuana dispensaries statewide
    167: Dispensaries in Portland

    In Washington, though I don't know if this has gone into effect yet. They have plenty of dispensaries as well.

    OLYMPIA – Following an analysis of the entire marijuana marketplace in Washington State, the Washington State Liquor and Cannabis Board (WSLCB) today heard a recommendation from staff to increase the number of retail marijuana stores from the current cap of 334 to a new cap of 556.

    With an abundance of growers and no shortage of outlets to sell to I don't see the prices doing anything but going down. There is so much weed that you almost trip over it walking down the street. I'm waiting for Starbucks to open a test Marijuana Cafe in Portland. Chocolate Kush Chai Latte anyone?
     
    GBAUTO likes this.
  4.  
    Sour Wreck

    Sour Wreck Well-Known Member

    times are def changing
     
  5.  
    ANC

    ANC Well-Known Member

    Time to move then, it is going for R90 per gram wholesale over here. So, about $7.50/g so that is about $3400/pound
     
  6.  
    xtsho

    xtsho Well-Known Member

    Who's that exotic beauty in the photo?
     
    fearnoevil and GreenHighlander like this.
  7.  
    Johnny Lawrence

    Johnny Lawrence Well-Known Member

    Bridget the Midget in a wig.
     
    Roger A. Shrubber likes this.
  8.  
    tyke1973

    tyke1973 Well-Known Member

    How Many Roads Must a man Walk down,before you call him a man
     
    Sour Wreck likes this.
  9.  
    xtsho

    xtsho Well-Known Member

    The answer is blowing in the wind.
     
    vostok, Sour Wreck and tyke1973 like this.
  10.  
    tyke1973

    tyke1973 Well-Known Member

    How Much Cannabis are you selling to these Dispensaries each Grow,If you have a Permit to grow a few plants i see no use to worry about the prices,Grow your own.But i don't Know the in and outs of this We are way behind,In fact ,i don't think it will be legal here for a long time .But at least Doctors are now telling Patients to try Cbd Oil ,Now even that is a Giant step for a British Doctor to say,Only a few year ago they was saying it had no medical Benefits at all.I have been making Cbd Oil for many years now,But mine contains thc,But the color of some of the cbd oil i see for sale looks more like Cod liver oil, or Olive Oil.They all seem to make it out like its all about the Patients, these big Dispensaries.Load of Crap its all about Money,Most of them are nothing more than Legal Drug Dealers.But instead of the hat to side, and jeans round there knees,These dealers wear white overalls and white face mask
     
    Last edited: Jan 28, 2018
  11.  
    ANC

    ANC Well-Known Member

    What they were saying and what they are holding Patents for are two different things.
     
  12.  
    Indacouch

    Indacouch Well-Known Member

    @vostok

    One thing this price drop has caused is everyone to go GROW crazy in my part of Cali ......literally ranches around me doubling their plots as well as greenhouse growers like myself already putting more and larger houses.....people who I know that don't know eachother with similar plans .....basically to grow huge amounts and offer it at a extremely low price in 18 ...... I believe it will continue to drop from here on out .....unless all this legalization was stopped or reversed .....it's become a matter of having great flowers consistently .....so much shit weed out here that the real fire still commands a decent living .....but one fuck up and your nobody.
     
    dangledo, vostok, thumper60 and 3 others like this.
  13.  
    ANC

    ANC Well-Known Member

    True dat the shit I smoke day to day is 6 to 10 rand a gram, that's like a couple of US sents.
     
  14.  
    xtsho

    xtsho Well-Known Member

    In Oregon you can't sell without a license. You are however allowed to grow four plants for personal recreational use. I have no need to sell any weed or get involved in the cannabis industry myself. I grow legally for my own supply and as a hobby. The majority of people just buy it from a dispensary or are lucky enough to know someone like me that gives it to them for free. I literally can not consume even a third of what I harvest. So I give it away to friends and relatives.

    All I know is that if you want to live in a cannabis friendly location you can't find a better place than Portland Oregon. We also have excellent beer. Life is good.
     
  15.  
    ANC

    ANC Well-Known Member

    beer is no good in winter
     
  16.  
    GreenHighlander

    GreenHighlander Well-Known Member

    As a patient who grows for himself and has helped many other medical patients grow their own for years. As well as growing being my full time job for many years before. I am glad the prices are bottoming out. With high street value, allowing medical patients to grow and supply their own puts them at a very serious and real risk of being robbed and/or physical hurt. Having a high street value also keeps organized crime ( suit wearing or not) involved.
    I look forward to the day even top shelf herb holds the value of tomatoes.
    Cheers :)
     
  17.  
    xtsho

    xtsho Well-Known Member

    You should try some of the high octane Winter Ales we have here. You'd change your mind. They put meat on your ribs.
     
    farmerfischer likes this.
  18.  
    greg nr

    greg nr Well-Known Member

    Beer is always good; it's antifreeze for the soul.
     
    fearnoevil likes this.
  19.  
    vostok

    vostok Well-Known Member

    Thank you for the invitation...do you have snow...? lol
     
  20.  
    vostok

    vostok Well-Known Member

    this is a valid point

    wanting lower prices so your buddies don't get robbed

    thats considerate

    as we medical growers continue to dumpster dive for our dinner?
     
    fearnoevil and GreenHighlander like this.

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