fbpx
QQQ
+ 0.00
311.86
+ 0%
DIA
+ 0.04
308.03
+ 0.01%
SPY
+ 0.00
375.67
+ 0%
TLT
+ 0.00
151.82
+ 0%
GLD
+ 0.00
171.16
+ 0%

Ask Our Experts 11/17/19: Price Declines And Their Impacts On The Market

November 18, 2019 8:38 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Ask Our Experts 11/17/19: Price Declines And Their Impacts On The Market

By New Frontier Data

Q: Given the states of cultivation and capacity this season, what are the impacts in terms of prices, whether wholesale or retail?

A: A report over the summer from the State of Colorado (Marijuana Enforcement Division) provided some very interesting data on inventory and on prices. As Colorado and other markets mature, they can identify key issues that have not yet manifested themselves in more nascent markets. Colorado serves as a good microcosm of activity and dynamics in the broader cannabis market.

For example, explains New Frontier Data's Senior Economist Beau Whitney, "while much has been written about the inventory situation in Oregon and how it has resulted in steep declines both in wholesale and retail prices, Colorado had a much more controlled rollout of its cannabis regulatory system. By issuing licenses first to medical growers and placing a cap on canopy, Colorado was able to control the amount of supply to the market."

Also, unlike most states, Colorado only allows growers to increase their canopy if they can prove sufficient demand for their existing output. Thus, while Colorado sees periods of excess inventory, they periods are short-lived as more demand comes online to consume it.

Despite Colorado's deliberate approach to canopy and supply, prices nonetheless have declined over time. Since the state began publishing data in 2015, prices for Colorado flower have declined 50% (roughly $1,000 per pound) while trim has declined 45% (nearly $164 per pound).

The post Ask Our Experts 11/17/19: Price declines and their impacts on the market appeared first on New Frontier Data.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Image by Herbal Hemp from Pixabay

Posted-In:

Cannabis Markets General

Related Articles

Michigan Cannabis Sales Near $1B In First Year Of Adult-Use Sales

Cannabis sales in Michigan spiked during December, bringing the total to $984.6 million for 2020. read more

Cantor Analyst Raises Aphria And Tilray Price Targets Amid Merger

Cantor Fitzgerald analyst Pablo Zuanic expressed disappointment by Aphria Inc. (TSX: APHA) (NASDAQ: APHA) quarterly results in an analyst note published Friday. read more

Cannabis Movers & Shakers: Next Green, Cannabis Control Commission, Willow, TruTrace, HEXO, Bengal Capital, MediPharm Labs, NIHC

Here is a summary of the latest leadership changes within the cannabis industry. read more

French Energy Firm Backs Hemp-Fueled Gas Plant With $23M

French energy company Qairos Energies is financing a project that will use locally grown hemp for the production of hydrogen and methane, according to HempToday. read more

Jay-Z Touts 'End Of Cannabis Prohibition' As Roc Nation Finalizes SPAC Deal With Caliva, Left Coast Ventures

A consortium made up of CMG Partners Inc., Left Coast Ventures Inc. and Shawn Carter (Jay-Z) —with his company Roc Nation — has finalized its previously announced transaction with Subversive Capital Acquisition Corp. (OTCQX: SBVCF). read more