A sudden dry spell rattled the Cannabase Marketplace this August, bringing an end to the streak of record breaking volumes we observed earlier in the summer. Though we’ve become accustomed to high supply and steady demand from much of the year, wholesale supplies dried up quickly this month as consumer sales continue to reach new highs.

Flower Volume Takes Hit

Steady consumer sales during the first half of 2015 gave wholesalers the flexibility to freely post product surpluses on the Marketplace; allowing sellers to entertain offers and line-up buyers to hedge against any possible slumps in demand. This summer however, medical and recreational consumer sales soared, consecutively breaking month-over-month records from May to July.

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With consumer sales reaching all-time highs this summer, demand is beginning to keep pace with supply for many, leaving little room for wholesale (at least for now). Though sellers appear to be stockpiling inventories to keep their own shelves stocked, those who do post product are able to strike deals quickly and at top dollar.

Counter to what we usually expect, asking prices remained relatively stable in August, with the average pound of medical flower holding steady near $1800, and near $2000 for recreational. Pricing norms set this summer appear to have guided seller's asking prices early on, but as the amount of available product dried up, we observed the majority of wholesale activity switch over from listings to requests. With many buyers eager to find wholesale connections in a tight market, new Marketplace listings were bombarded with inquiries, prompting sellers to connect directly with product requests instead.

This notable shift caused reportable wholesale volume to tumble considerably. 90 pounds of medical flower and 29.4 pounds of recreational flower hit the Marketplace this August, for a total of 111.4 pounds of new wholesale flower listed during the month.

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Extract Market Nears Balance

August’s market slump extended to wholesale extract supplies, a welcome sign for wholesalers facing alarmingly high market volume in recent months. Monthly extract volume ventured into the dozens of pounds this summer, threatening to further collapse wholesale prices and keeping suppliers on edge.  This August, 6347 grams (14 lbs) of new wholesale extract hit the Marketplace, a massive 70.4% drop from the month prior.

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Despite the slowdown in new extract listings, the preceding supply surge appears to continue to weigh on asking prices. Average asking prices dropped from $26.00/gram in July  to $23.42 in August, a 10% drop.

Market Prospects

As we’ve learned - in an effort to avoid a flood of connections and inquiries, sellers tend to shy away from posting listings during a drought; instead opting to connect with buyers through wholesale requests.  For sellers, this not only highlights the utility of creating and maintaining product requests, but also the importance of forging and nurturing long-term relationships with wholesalers on the Marketplace. Though buyers have enjoyed competitive pricing and sizable selection on wholesale product during the recent supply glut, those who have invested time and effort in engaging with their Cannabase contacts have a considerable edge in scoring fair deals for much needed product.     

With Colorado's marijuana wholesale environment as unpredictable as ever, it's more important than ever to be following up-to-date analytics and information. Be sure to follow the Cannabase Marketplace on Twitter and subscribe to our in-app Cannalytics™ for real-time updates and market insights.

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