Wholesale cannabis prices are on the rise in the first quarter of the year, reaching $1,613 per pound, after dropping from $1,953 to $1,487 in 2016, according to a Cannabis Benchmarks report outlined by Forbes.
Jonathan Rubin, of Cannabis Benchmarks, indicated he has seen evolving patterns in the wholesale cannabis price and that the products are behaving like a typical commodity.
“You see this spike in prices in the August time frame because all the outdoor harvest has been used up,” Rubin said in the report. “The outdoor growers 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 thinks that the trends point toward a saturated market that is currently in a bust cycle and that, eventually, the market will even itself out.
“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,” he said. “Fewer players means less supply and then prices go up again,”
Overall, Cannabis Benchmarks reports that wholesale prices are down 17.4 percent year-over-year.