Cannabis prices are on the rise, with the supply of cannabis flower tightening further throughout 2024 as more cultivation operations reduce or halt production due to escalating losses. This decreasing supply is expected to push prices even higher. The increase in prices is deterring some consumers from making purchases, subsequently raising the demand for discounted cannabis in various regions.
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Key Takeaways:
- In October 2023, the average price of dried cannabis flower hit $1.10 per gram, a 6.8% increase from September’s average of $1.03 per gram.
- The price of recently harvested flower with 20%+ THC rose from $1.04 per gram at the end of the previous year to $1.32 per gram by April, marking a 27% overall increase.
- As cannabis flower prices climb, consumers are seeking cheaper alternatives such as lower THC flower percentages, online dispensaries for better prices, or alternative products.
Canadian Cannabis Market General Trends
A report from a Chicago-based consultancy, Brightfield Group, anticipates that Canada’s cannabis market will double in the next five years. The report underscores that the expansion of retail stores and relaxed regulations will drive this growth.
Brightfield Group forecasts that the market will grow at a yearly rate of 10%, reaching $8.8 billion in five years, primarily fueled by increased sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, remarked that despite significant market growth in 2021, there is substantial potential for further expansion, particularly with enhanced retail access.
Overview of the Flower Market in a Canadian Cannabis Store
Despite the anticipated boost in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower remains the leading category in sales, its dominance is gradually diminishing as other categories gain popularity. Wholesale prices have stayed relatively stable, although some provinces have seen unexpected price hikes.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, reflecting a 6.8% increase from the September average of $1.03 per gram, with year-over-year prices displaying even more dramatic changes.
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 are selling more rapidly, with the average age of these harvests dropping to 65 days in April. In contrast, the average price for aged flowers has largely stagnated, settling at $0.69 per gram in April, representing a 1% decrease from the previous year’s 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: Traded at a weighted average price of $1.34 per gram, a 12.6% increase from the March price of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, an 11.2% drop from the March average price of $1.07 per gram. The cannabis Commodity Exchange (CCX) forecasts 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, a 23.3% drop from the March price of $0.90 per gram. Nevertheless, CCX anticipates a recovery for 15-20% THC in May, expecting a 13.0% increase to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market continues expanding in 2024, several factors are causing fluctuations in cannabis flower prices. Market dynamics and regulatory environments are intertwined with these influences.
Supply and Demand
The yields from cultivation significantly affect the quantity of cannabis available in the market, which can vary due to factors like weather, pests, and diseases. Seasonal variations also play a role, with certain times of the year yielding higher or lower production levels. For instance, outdoor cannabis cultivation peaks during late summer and early fall harvests, leading to an influx of supply that can lower prices.
Consumer preferences can shift due to trends, changes in disposable income, and evolving perceptions of cannabis. An increase in demand for cannabis products can elevate prices, particularly if supply does not keep pace. Conversely, a downturn in demand, possibly due to economic declines or shifts toward alternative products, can result in lower prices.
Product Diversification
The cannabis market has experienced significant diversification, with consumers showing interest in a wide range of products beyond traditional recreational cannabis flower. This includes edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The rising demand for these varied products can influence flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has facilitated easier access for consumers to a vast array of cannabis products from the comfort of their homes. This convenience can enhance consumption and impact wholesale demand and prices.
Delivery services have also gained prominence, enabling customers to receive cannabis products directly at their doorsteps. The convenience of these services can boost demand, especially in regions where physical dispensaries are less accessible, thus influencing prices by increasing overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As the cost of cannabis flower increases, consumers are looking for more affordable options. This includes purchasing flower with lower THC levels, exploring online dispensaries outside their region for cheaper alternatives, or opting for alternative products.
Online cannabis shops provide a variety of THC flowers at different price points per gram. Due to a broader customer base, online dispensaries typically offer lower prices than physical stores. They also provide weekly sales to give customers alternatives in light of price increases for other cannabis flowers.
Here’s a list of cannabis buds available on sale at Canna Cabana Canada. Get cannabis for $99 per ounce or 28.35 grams.
Conclusion
Experts anticipate that the cannabis market will continue to grow, with annual sales on the rise. Despite the increasing demand, high-quality cannabis flower, like hybrid strains, is becoming more costly. Numerous factors contribute to these price hikes, prompting customers to seek the best prices or explore alternative products like vape carts. Online dispensaries, such as Canna Cabana Canada, offer discounted prices on cannabis flower, allowing customers to meet their needs without sacrificing quality or settling for undesired products.
Frequently Asked Questions
Are there any benefits to the price increase for consumers?
While higher cannabis prices can impose a financial burden on consumers, notable benefits exist:
- Improved Product Quality: Increased prices enable producers to invest more in cultivation practices and quality control, resulting in better, safer, and more consistent cannabis products.
- Enhanced Regulation: Higher prices may indicate stronger regulatory oversight, ensuring that products meet safety and quality standards, thus protecting consumers from harmful or substandard goods.
- Economic Benefits: Rising prices can boost state revenues through higher taxes, which can be reinvested in public services. This growth also supports 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 purchasing, loyalty programs, or by shopping at dispensaries known for lower prices. Some provinces also have medical cannabis programs that offer reduced prices for qualifying patients.
What should consumers look for when purchasing discounted cannabis?
When seeking lower cannabis prices, consumers should prioritize quality assurance, lab testing results, reputable brands, and dispensaries with strong customer reviews to ensure they receive safe and effective products.
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