The prices of cannabis are on the rise. Throughout 2024, the supply of cannabis flower is becoming increasingly limited as more cultivation operations at BudExpressNow Canada either cut back or stop production entirely due to growing losses. This decreased supply is expected to push prices even higher. As prices climb, some consumers are turning away from purchases, leading to a heightened demand for cannabis in various regions.
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Key Takeaways:
- In October 2023, the average price of dried cannabis flower was $1.10 per gram, reflecting a 6.8% increase from September’s average of $1.03 per gram.
- The price of freshly harvested flower with 20%+ THC surged from $1.04 per gram at the end of last year to $1.32 per gram by April, marking a 27% overall increase.
- As cannabis flower prices escalate, consumers are seeking more affordable alternatives, such as lower THC flower percentages and online dispensaries for better pricing.
Canadian Cannabis Market General Trends
A report from the Chicago-based Brightfield Group anticipates that Canada’s cannabis market will double in size over the next five years. The report highlights that the expansion of retail stores and relaxed regulations will drive this growth.
Brightfield Group foresees that Canada’s cannabis market will grow at a yearly rate of 10%, reaching $8.8 billion in five years. This growth will primarily stem from increasing cannabis and vape product sales.
Bethany Gomez, managing director of Brightfield Group, stated that despite robust market growth in 2021, there remains considerable room for further advancement, particularly with enhanced retail access.
Overview of the Flower Market in a Canadian Cannabis Store
Despite projected increases in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower continues to dominate market sales, its supremacy is gradually waning as other product categories gain popularity. Wholesale prices have largely remained stable, although some provinces have witnessed unexpected price increases.
The average price for dried cannabis flower in October 2023, based on the latest data, was $1.10 per gram—up 6.8% from the September average of $1.03 per gram. Year-over-year prices indicate even more pronounced shifts.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
Prices for cannabis flowers in Canada can fluctuate significantly between newly harvested and aged products. Recently harvested flowers are selling quickly, with their average age dropping to just 65 days in April. The average price for aged flowers has stabilized at $0.69 per gram in April, representing a 1% decrease from the year-end price of $0.70 per gram.
- 30%+ THC: The average price for recently harvested flower climbed 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% rise from March’s settlement price of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, down 11.2% from March’s average price of $1.07 per gram. The cannabis Commodity Exchange (CCX) forecasts a recovery in May, with prices expected to increase 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 March’s settlement price of $0.90 per gram. Nevertheless, CCX anticipates a recovery for 15-20% THC in May, with a 13.0% increase to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market continues to grow in 2024, multiple factors are affecting fluctuations in cannabis flower prices. Market dynamics and regulatory frameworks are closely intertwined with these influences.
Supply and Demand
The yields from cultivation significantly affect the amount of cannabis available in the market, which varies due to weather conditions, pests, and diseases. Seasonal fluctuations also play a part, with specific periods yielding higher or lower production levels. For example, outdoor cannabis cultivation peaks during late summer and early fall harvests, resulting in an influx of supply that can lower prices.
Consumer preferences may change due to trends, fluctuations in disposable income, and evolving views on cannabis. Increased demand for cannabis products can elevate prices, especially if supply does not keep pace. Conversely, a drop in demand, possibly due to economic downturns or a shift toward alternative products, may lead to lower prices.
Product Diversification
The cannabis market has experienced substantial diversification, with consumers showing interest in an array of products beyond traditional recreational cannabis flower. These alternatives include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The growing demand for these diverse products can influence flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis has made it simpler for consumers to buy a wide variety of cannabis products from home. This convenience may boost consumption and affect wholesale demand and pricing.
Delivery services have also gained traction, allowing customers to receive cannabis products directly at their homes. This convenience can enhance demand, particularly in areas where physical dispensaries are less accessible, subsequently impacting prices by increasing overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As the cost of cannabis flower rises, consumers are in search of more budget-friendly options. This includes choosing flower with lower THC levels, looking into online dispensaries beyond their immediate region for cheaper alternatives, or exploring other product types.
Online cannabis shops provide a range of THC flower at various price points per gram. Due to a broader customer base, online dispensaries can offer lower prices compared to physical stores. They also run weekly promotions to give customers alternatives if they are unable to absorb the price hikes of other cannabis flowers.
Here’s a selection of cannabis buds available at BudExpressNow Canada. Purchase for $99 per ounce or 28.35 grams.
Conclusion
Experts anticipate that the cannabis market will continue its expansion, with annual sales projected to increase. Despite the soaring demand, high-quality cannabis flower, particularly hybrid strains, is becoming increasingly costly. Various factors contribute to these price surges, prompting customers to seek the best deals or consider alternative products like vape cartridges. Online dispensaries provide discounted prices on cannabis flower, enabling customers to meet their needs without sacrificing quality or settling for less desirable products.
Frequently Asked Questions
Are there any benefits to the price increase for consumers?
While higher cannabis prices may impose a financial strain on consumers, several notable benefits arise:
- 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: Higher prices can indicate stronger regulatory oversight, ensuring that products meet safety and quality standards, protecting consumers from potentially harmful or substandard goods.
- Economic Benefits: Rising prices can boost state revenues through higher taxes, which can be reinvested into public services. This also fosters 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 via sales promotions, bulk buying, loyalty programs, or by shopping at dispensaries recognized for offering lower prices. Some provinces also feature medical cannabis programs that provide reduced prices for eligible 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 positive customer reviews to ensure they are getting safe and effective products.
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