Marijuana Prices Drop 5% to Below $1,650

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For the week ended Friday, June 5, the spot price index for a pound of cannabis fell to $1,646, down more than 5% from $1,735 a pound in the prior week. The futures price for December 2015 entered the six-month forward curve at $1,175 a pound, unchanged from last week’s November price.

In the past week, sales prices in Colorado, California and Oregon remained in a range of $1,300 to $1,800 per pound. The analysts at Cannabis Benchmarks say that indicates that growers do not anticipate a price increase in the near term. Police raids at eight dispensaries in Michigan boosted cannabis prices there to more than $1,900 a pound.

The big news for the week, though, was the announcement by Lloyd’s of London that the company would no longer insure cannabis operations. Cannabis Benchmarks fears a spike in insurance costs:

Lloyd’s currently underwrites the vast majority of insurance policies for cannabis operations across the country, but … they will not renew old policies or write new ones. Insurance is mandated by regulations for licensed cannabis businesses in every state currently possessing a legal cannabis program. The exit of a key player from that market has business owners worried that premiums will skyrocket.

The July (the prompt month) price for a pound of cannabis has dropped to $1,780 a pound. State legislators in Oregon, Washington, California and Colorado — the four primary cannabis-producing states — are trying to tighten regulations and to redefine some cannabis that is produced and sold in legal gray areas into approved, primarily recreational, markets. Virtually all these moves would result in higher prices.

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Our price check at PriceOfWeed.com shows little change. The average price for an ounce of high-quality marijuana in Colorado is currently $241.11, down just 21 cents from two weeks ago. In California the price of high-quality marijuana is given as $241.90 (down three cents), compared with $297.05 (down eight cents) in Florida, $317.03 (down 27 cents) in Georgia, $326.08 (down 10 cents) in Texas and $231.55 (down four cents) in Washington, the only other state besides Colorado where recreational use of marijuana is legal.