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US cannabis harvest price report 2020

October 21, 2020

Eagle Point, Oregon legal cannabis farmer Jim Belushi has a smile on his face as his Ford Explorer roars up Interstate 5 to Portland—his trunk packed full of Belushi’s Farm pre-rolls, vape carts, and flower, such as Chocolate Hashberry and Captain Jack’s Gulzar Afghanica.

When Belushi gets to the store, his fifth annual crop will fetch a uniquely good price, he told Leafly.

“We can’t keep it in the store. We’re running through it,” said the 66-year-old star of “Growing Belushi” on the Discovery Channel. “This year I might break even, which is very exciting.”

A seller’s market for sinsemilla

Boutique-sized, tenacious, lucky, and happy—the former actor is an exemplar of the 2020 seller’s market for outdoor ganja.

America’s 35 million monthly weed lovers should pounce on fairly priced outdoor at dispensaries this fall. Unlike traditional years when a harvest glut drives prices down, prices should stay pretty firm this harvest season.

Record high, COVID-driven demand for pot has slammed into huge headwinds in the supply of weed, buoying prices.

In October, Cannabis Benchmarks’ average wholesale price per pound for the country—their spot index—hit its highest point in three years.

No discounts: Flow Kana’s limited edition Pink Boost Goddess outdoor wields citrusy sativa energy. (David Downs/Leafly)
No discounts: Flow Kana’s limited edition Pink Boost Goddess outdoor wields citrusy sativa energy. (David Downs/Leafly)

Fires, smoke, government red tape, taxes, and enforcement have suppressed the amount of ganja available.

“You had major fires in every major producing region that runs conventional outdoor,” said industry expert Kevin Jodrey, owner of Wonderland Nursery in Humboldt County, CA.

“All past trends have been thrown out the window at this point,” said Adam Koh, cannabis expert and editorial director at crop data firm, Cannabis Benchmarks in Denver.

Why? Strong demand, throttled supply

This year was supposed to be the year prices continued their decades-long slide. Legalization’s efficiencies reduce prices by up to 90%, researchers at RAND conclude.

Instead, 2020 saw very firm and slightly rising weed prices, thanks to the interaction of natural catastrophe, and manmade policy in 11 legalization states as well as medical marijuana in more than three dozen. Every state tells a slightly different story.

Newer, eastern states have higher prices that more mature western legalization states. (Courtesy Cannabis Benchmarks)
Newer, eastern states have higher prices that more mature western legalization states. (Courtesy Cannabis Benchmarks)

Thirsty smokers in newly legal markets like Illinois and Massachusetts propped up the top of the US price spectrum—$3,600/lb and $3,552/lb, respectively, according to Cannabis Benchmarks.

Meanwhile, outdoor bargain hunters in Colorado and Oregon scooped up the bottom: $1,327/lb and $1,470/lb.

California wholesale pounds for $3,400

Cannabis is a $52 billion US industry and Americans consume 29.9 million pounds of the fast-growing annual each year, according to White House reports.

America’s largest pot producer—California—grows 13.5 million pounds of marijuana, 60% of it outdoors, regulators estimate. Last October, prices dropped 12% at harvest, LeafLink Insights told Leafly in an emailed statement. Not so this year.

The cost of the average wholesale pound in the US is expected to decline trivially this fall from $1,550 to $1,510—$40 bucks, stated Cannabis Benchmarks.

A wholesale legal pound sold for $3,400 in the California legal market this October.

“A couple of years ago, people thought those days were over,” said Cannabis Benchmarks’ Koh.

“It’s crazy. Everyone’s ecstatic right now because, for a brief moment, there’s money to recapitalize,” said Jodrey.

A new high for demand

Industry analysts concur—2020 saw consumer demand for cannabis “skyrocket,” said Koh.

Colorado has the oldest adult-use market in the world, and it still had its three biggest sales months ever over the summer. July in Colorado was up 36% year over year. Other states reported similarly sizzling business:

  • Newborn legalization state Illinois did a record $95.5 million in August sales, surpassing Oregon’s 5-year-old market.
  • Mature Oregon was up 30% year over year in August, and prices there have bounced off a 2019 market bottom.

“Cannabis has been doing well,” said Oregon farmer Belushi, who expects to sell all 1,200 pounds he’s growing for 2020.

"Farming is difficult," Belushi said he's learned. (Courtesy Belushi's Farm)
“Farming is difficult,” Belushi said he’s learned. (Courtesy Belushi’s Farm)

“And thank God. It means people during this pandemic time—that feeling of loss of control, anxiety, that fear of what’s going to happen next—instead of using liquor, or pills, Xanax, or Ambien, to soothe the screaming inside, they’re choosing cannabis, which I think is great because it’s just such a sweet, gentle, non-violent pathway to healing,” said Belushi.

Stores are a hit

Also driving demand, California added more than 100 new stores and deemed them essential. Clean shops attracted lapsed cannabis users and illicit market shoppers, said Jodrey. “The storefronts are stabilizing. Delivery worked,” he said.

Glass House Group president Graham Farrar said his California stores had “the best months we’ve ever had” this summer. The Santa Barbara-based grower-retailer hired 80 people since the pandemic started.

“Cannabis has this new enthusiasm going for it,” he said.

Supply headwind #1: Fire!

As consumers stocked up on weed, farms raced to keep up.

The US’ supply of cannabis pushed into substantial headwinds this year. Most dramatic among them—historic fires along the West Coast.

In America’s cultivation epicenter—the Emerald Triangle—the skies turned Mars-red and ash rained down on the city of Garberville, CA like the movie Silent Hill, said resident and grower Kevin Jodrey, recalling the August Complex Fire.

The Triangle gets hit every year, but “it was way different this year,” he said. “The amount of impacted cannabis is going to be huge.”

California’s ferocious 2020 fires killed 30, and destroyed record acreage in grow zones from Santa Cruz to the Oregon border. (CalFire, 2020) (CalFire)
California’s ferocious 2020 fires killed 30, and destroyed record acreage in grow zones from Santa Cruz to the Oregon border. (CalFire, 2020) (CalFire)
Fires (red) on the doorsteps of Oregon’s 2020 hemp grow sites (green dots) socked in farms with smoke. (Hemp Benchmarks)

Enormous wildfires not only torched farms—weeks of smoke inundation “infiltrated a tremendous amount of product,” Jodrey said.

Ash, soot, and smoke touched every major outdoor source from California to Washington, including Santa Cruz, Santa Rosa, the Emerald Triangle, and Eugene, Medford, Salem, and Portland, Oregon.

“Oregon got just smashed,” said Jodrey.

“A lot of farms burned—just straight burned,” said Belushi, who has 40 outdoor plants and two greenhouses near Medford on the Rogue River.

“The grid was shot. You couldn’t get fuel,” Jodrey said. “It really messed up the infrastructure in all these ways we’re not used to seeing.”

Kevin Jodrey, Wonderland Nursery, Humboldt County, CA.

Labs and nurseries also burned in Northern California and Oregon. Plus, wildfire-related power outages hit indoor growers, hashmakers, and storage facilities. Local supply chains got snarled.

“The grid was shot. You couldn’t get fuel,” Jodrey said. “It really messed up the infrastructure in all these ways we’re not used to seeing.”

“The size and the quality of the outdoor harvest is now in question,” said Cannabis Benchmarks’ September report.

Damage levels unknown

Farms are harvesting through November, and the exact level of crop damage remains unknown. The damage exists on a spectrum—from cosmetic to a total loss—depending on a garden’s maturity and proximity to fire and smoke.

Crops can fail for heavy metals from residential fire smoke residue. Smoke also stresses and sickens plants, resulting in failing levels of mold or yeast, said Jill Ellsworth, CEO of Willow Industries. The company uses ozone chambers to clean up moldy or yeasty bud so they pass testing.

“The smoke has been a huge issue,” she said.

Or, smoke-tainted bud can just merely smell like campfire, resulting in a lower price than pristine bud.

Thankfully, smoke and ash on this Sebastopol, CA Squirt cultivar did not hurt potency or terps. (David Downs/Leafly)
Smoke inundation and ash on this Sebastopol, CA Squirt cultivar did not seem to hurt potency or terps. (David Downs/Leafly)

“It’s a joke—BBQ Blueberry or Campfire Kush, but it’s real,” said Jodrey. “The smoke gets in there and it doesn’t come out.”

“They’re already seeing it. People who have pulled herb and hung and dried it—‘Woah, I have smoke residue’. How do you market that? What do you do with it?”

“Come January is when you see the truth after the initial harvest—Is there enough clean herb to be found in the legit markets?” Jodrey said.

Supply headwind #2: Permitting

Beyond the fires, regulating cannabis like plutonium has sapped supply and driven up prices, farmers and analysts say. Local bans, costly licensing, and crippling taxes held back a flood of mass pot produce in 2020.

  • In the country’s biggest market, California, it took Jodrey 18 months to get a business license from Humboldt County, he said.
  • A bit further south, Sonoma County farmer Erich Pearson, founder and CEO of SPARC, reports a 2.5 year-long process to get a large drying barn permitted.
  • In Santa Barbara, Farrar waited 36 months from buying his greenhouses to his first legal harvest.

Industrial growers trying to scale up not only got mired in local planning review, they got strangled by COVID’s capital drought, said Jodrey.

Eric Sklar, CEO of Lakegrade, a brand with a farm in Lake County, CA, said 2020’s “biggest headaches” were raising money and sourcing enough flower to fill bags of his hot outdoor brand.

Supply headwind #3: Taxes encourage diversion

Further straining legal weed supplies, combined California and federal tax rates of 75% have the effect of encouraging the illicit market, said Sklar.

California has a plant track and trace system called METRC, but it’s easy to circumvent, said Jodrey. Licensed farmers can double their profits by diverting to the street market, paying no taxes out the back door, he said.

Supply headwind #4: Enforcement biting down

Also denting supplies—the post-prohibition civil enforcement regime is working.

For example, satellite surveillance and steep civil fines have decimated bootleg grows many times over in southern Humboldt.

The annual trimmigrant population is down 99% from 1,000 to about 10 hippies in Garberville, CA, this year, joked Jodrey.

The total amount of cannabis grown in California may be at the lowest it’s been in five years, Farrar said.

“What used to be a pretty gray market has separated in black and white—you either have a license or you don’t. And farming at scale without a license is a daily game of Russian roulette,” said Farrar.

Licensees that backdoor product face steep fines, Jodrey noted.

For example, manufacturers for brand Kushy Punch face a record $495 million in fines after getting caught backdooring cannabis products in 2019.

Future remains bright

Back on Belushi’s Farm in southern Oregon, warm, blue-sky days and cool nights help the sativa hybrid Lemon Chiffon Cake chunk up for harvest.

“It’s excellent cannabis,” Belushi said. “This has been the best season of my short-lived career.”

Boutique-sized Belushi's Farm will harvest 1,200 pounds of cannabis in 2020. (Courtesy Belushi's Farm)
Boutique-sized Belushi’s Farm will harvest 1,200 pounds of cannabis in 2020. (Courtesy Belushi’s Farm)

The countrywide sweep of legalization makes US cannabis agriculture so diverse, no single calamity can wipe it out.

Humanity might have paused in 2020, but the pot fields did not. The sun still rose, the seasons still turned, the buds still ripened, and the flower heading to store shelves will be among the most aromatic, potent, diverse, and clean on this green Earth, ever.

“I think you’re going to see some really good crops,” said Sklar, noting that the number of California cultivation licenses has doubled in a year. “We’re going to have more legal cannabis delivered to distributors than ever before and not just quantity but quality. I’m really excited.”

David Downs's Bio Image
David Downs

David Downs directs news and lifestyle coverage as the California Bureau Chief for Leafly.com. He's written for WIRED, Rolling Stone and Billboard, and is the former cannabis editor of the San Francisco Chronicle, as well as the author of several cannabis books including 'Marijuana Harvest' by Ed Rosenthal and David Downs. He co-hosts The Hash podcast. TW: @davidrdowns | IG @daviddowns

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