Ron Strider
Well-Known Member
Spot prices for marijuana are slowly climbing higher after a precipitous fall over the past year. Cannabis Benchmarks has been tracking the prices of wholesale cannabis since 2015 and have seen the price per pound drop from an average of $1,953 to a low average of $1,487 in 2016.
So far in 2017, the first quarter average has risen to $1,613. Jonathan Rubin of Cannabis Benchmarks has seen an evolving pattern in the price of wholesale marijuana which is behaving like a typical commodity. Prices are linked to supply, which correlates with harvest schedules.
The wholesale marijuana market gets its product from three different sources with different harvest times. The indoor growers are harvesting all year around and can deliver four to six harvests, greenhouse grows can typically generate four harvests a year, while outdoor grows only get one harvest. The outdoor grows usually harvest in the fall typically pushing the prices down as the large supply gets released into the market.
“You see this spike in prices in the August time frame because all the outdoor harvest has been used up,” said Rubin. “The outdoor growers [who only get one harvest] tend to dump their product in fall and recoup some money to pay bills. Then they back off sales and let the prices rise as they slowly bring more product to the marketplace.”
Rubin noted that each year is different weather wise and each state faces its own set of issues. Marijuana prices experienced their biggest drop starting at the beginning of 2016 and not recovering until the holidays. “Increased supplies from new and expanded capacity, as well as improved cultivation techniques and better supply chain management drove prices down $365 per pound or 19.7%,” said Rubin.
Prices tend to rise as holiday sales jump and again during 420 celebrations. Prices have risen from an average of $1,487 in the fourth quarter of 2016 to $1,613 in the first quarter of 2017. It's still a 17.4% decline year-over-year, but sequentially higher.
Oregon's market faced its own set of problems with a testing bottleneck at the end of 2016 and then a spike ahead of full adult use markets beginning in January.
Currently, there are no marijuana options to trade like other commodities so that farmers can lock in their prices. Tradiv does operate a wholesale marketplace where cultivators can be matched with buyers.
Still, Rubin believes the market is in an overall bust cycle. "As prices decline, larger, more efficient players can sell close to the cost of production and wait for weaker growers to go out of business. Fewer players means less supply and then prices go up again," he said. Rubin thinks we're entering a period where lower commodity prices for wholesale marijuana and an influx of new players will cause disruption among the growers.
News Moderator: Ron Strider 420 MAGAZINE ®
Full Article: Cannabis Wholesale Prices Get Higher After Recovering From 2016 Bust
Author: Debra Borchardt
Contact: Contact Information - Forbes
Photo Credit: None Found
Website: {{meta.title}}
So far in 2017, the first quarter average has risen to $1,613. Jonathan Rubin of Cannabis Benchmarks has seen an evolving pattern in the price of wholesale marijuana which is behaving like a typical commodity. Prices are linked to supply, which correlates with harvest schedules.
The wholesale marijuana market gets its product from three different sources with different harvest times. The indoor growers are harvesting all year around and can deliver four to six harvests, greenhouse grows can typically generate four harvests a year, while outdoor grows only get one harvest. The outdoor grows usually harvest in the fall typically pushing the prices down as the large supply gets released into the market.
“You see this spike in prices in the August time frame because all the outdoor harvest has been used up,” said Rubin. “The outdoor growers [who only get one harvest] tend to dump their product in fall and recoup some money to pay bills. Then they back off sales and let the prices rise as they slowly bring more product to the marketplace.”
Rubin noted that each year is different weather wise and each state faces its own set of issues. Marijuana prices experienced their biggest drop starting at the beginning of 2016 and not recovering until the holidays. “Increased supplies from new and expanded capacity, as well as improved cultivation techniques and better supply chain management drove prices down $365 per pound or 19.7%,” said Rubin.
Prices tend to rise as holiday sales jump and again during 420 celebrations. Prices have risen from an average of $1,487 in the fourth quarter of 2016 to $1,613 in the first quarter of 2017. It's still a 17.4% decline year-over-year, but sequentially higher.
Oregon's market faced its own set of problems with a testing bottleneck at the end of 2016 and then a spike ahead of full adult use markets beginning in January.
Currently, there are no marijuana options to trade like other commodities so that farmers can lock in their prices. Tradiv does operate a wholesale marketplace where cultivators can be matched with buyers.
Still, Rubin believes the market is in an overall bust cycle. "As prices decline, larger, more efficient players can sell close to the cost of production and wait for weaker growers to go out of business. Fewer players means less supply and then prices go up again," he said. Rubin thinks we're entering a period where lower commodity prices for wholesale marijuana and an influx of new players will cause disruption among the growers.
News Moderator: Ron Strider 420 MAGAZINE ®
Full Article: Cannabis Wholesale Prices Get Higher After Recovering From 2016 Bust
Author: Debra Borchardt
Contact: Contact Information - Forbes
Photo Credit: None Found
Website: {{meta.title}}
