The cost of cannabis continues to escalate. As we move through 2024, the availability of cannabis flower is becoming increasingly limited as numerous cultivation operations either cut back or halt production altogether due to escalating losses. This tightening of supply is likely to push prices even higher. Elevated prices are dissuading some consumers from making purchases, which consequently heightens the demand for discounted cannabis in various regions.
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Key Takeaways:
- In October 2023, the average price of dried cannabis flower reached $1.10 per gram, marking a 6.8% increase from the average of $1.03 per gram in September.
- The price for newly harvested flower with 20%+ THC climbed from $1.04 per gram at the year’s end to $1.32 per gram by April, representing a total increase of 27%.
- As prices for cannabis flower rise, consumers are searching for more affordable options, such as lower THC flower percentages or online dispensaries to find better deals.
Canadian Cannabis Market General Trends
A report from the Chicago-based consultancy Brightfield Group anticipates that the cannabis market in Canada will double over the next five years. The report highlights that increasing the number of retail stores and easing regulations will drive this growth.
Brightfield Group forecasts that Canada’s cannabis market will experience a 10% annual growth rate, reaching $8.8 billion in five years. This growth is primarily attributed to rising sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that despite significant market growth in 2021, there remains ample opportunity for further expansion, particularly with improved retail accessibility.
Overview of the Flower Market in a Canadian Cannabis Store
Despite the anticipated growth in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower remains the leader in sales, its dominance is gradually waning as other categories gain popularity. Wholesale prices have largely held steady, although some provinces have seen unexpected price increases.
The average price for dried cannabis flower in October 2023, based on recent data, was $1.10 per gram, reflecting a 6.8% increase from September’s average of $1.03 per gram. Year-over-year price changes show even more significant shifts.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The price of cannabis flowers in Canada varies between newly harvested and aged products. Recently harvested flowers have been selling rapidly, with the average age of these harvests dropping to 65 days in April. The average price for aged flowers has remained relatively unchanged, settling at $0.69 per gram in April, a slight 1% decrease from the year-end price of $0.70 per gram.
- 30%+ THC: The average price for recently harvested flower rose by 2.7%, from $1.81 per gram in March to $1.86 per gram in April.
- 25-30% THC: This segment traded at a weighted average price of $1.34 per gram, reflecting a 12.6% increase from March’s price of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, an 11.2% decline from the March average price of $1.07 per gram. The cannabis Commodity Exchange (CCX) projects a recovery in May, with prices expected to rise by 12.6% to $1.07 per gram.
- 15-20% THC: Traded at an average price of $0.69 per gram in April, down 23.3% from March’s settlement price of $0.90 per gram. Nonetheless, CCX anticipates a recovery for this category in May, with a projected 13.0% increase to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market expands in 2024, various factors contribute to the fluctuations in cannabis flower prices. Market dynamics and regulatory conditions intertwine with these elements.
Supply and Demand
The yields from cultivation significantly affect the cannabis supply available in the market, which can vary due to weather conditions, pests, and diseases. Seasonal variations also play a role, influencing production levels. For example, outdoor cannabis cultivation peaks during late summer and early fall harvests, leading to increased supply that can lower prices.
Shifts in consumer preferences due to trends, disposable income changes, and evolving perceptions of cannabis can impact demand. An uptick in demand for cannabis products can drive prices higher, especially if supply cannot match this demand. Conversely, a decrease in demand—potentially due to economic downturns or shifts toward alternative products—can lead to lower prices.
Product Diversification
The cannabis market has seen notable diversification, with consumers increasingly interested in a broad range of products beyond traditional recreational cannabis flower. This includes edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. Rising demand for these varied products can influence flower prices.
Technological Integration
The advent of online shopping platforms for cannabis products has simplified the purchasing process for consumers, allowing them to buy a wide variety of cannabis items from home. This convenience can lead to increased consumption and affect wholesale demand and prices.
Delivery services have also gained traction, enabling customers to receive cannabis products directly at their homes. The ease of delivery services can boost demand, especially in areas with limited access to physical dispensaries, thereby impacting prices through increased overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
With rising costs for cannabis flower, consumers are actively seeking more affordable alternatives. This includes purchasing flower with lower THC levels, exploring online dispensaries beyond their local area for cheaper options, or selecting alternative products.
Online cannabis stores provide a selection of THC flowers at various price points per gram. Online dispensaries can often offer lower prices than physical stores due to a broader customer base. They also run weekly promotions to help customers who may struggle with the increased prices of other cannabis flowers.
Here’s a selection of cannabis buds available on sale at BudsByMail Canada. Get $99 for an ounce or 28.35 grams.
Conclusion
Experts predict ongoing growth in the cannabis market, with annual sales on the rise. Despite increasing demand, high-quality cannabis flower, particularly hybrid strains, is becoming more costly. Various factors contribute to these price increases, prompting customers to seek the best prices or consider alternative products like vape cartridges. Online dispensaries offer discounted prices on cannabis flower, ensuring customers can fulfill their needs without compromising on quality or settling for less desirable products.
Frequently Asked Questions
Are there any benefits to the price increase for consumers?
While higher cannabis prices can impose a financial strain on consumers, there are significant benefits:
- Improved Product Quality: Increased prices allow producers to invest more in cultivation practices and quality control, resulting in better, safer, and more consistent cannabis products.
- Enhanced Regulation: Rising prices may indicate stronger regulatory oversight, ensuring products meet safety and quality standards and protecting consumers from potentially harmful or subpar goods.
- Economic Benefits: The uptick in prices can boost state revenues through higher taxes, which can be reinvested in public services. It also encourages the growth of local cannabis businesses, job creation, and community economic development.
How can consumers find discounted cannabis in light of the price increase?
Consumers can discover lower cannabis prices through promotional sales, bulk buying, loyalty programs, or by shopping at dispensaries known for lower prices. Additionally, some provinces offer medical cannabis programs that provide lower prices for eligible patients.
What should consumers look for when purchasing discounted cannabis?
When buying cannabis at lower prices, consumers should prioritize quality assurance, lab testing results, reputable brands, and dispensaries with positive customer reviews to ensure they are obtaining safe and effective products.
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