Cannabis prices are on the rise. The availability of cannabis flower is tightening further throughout 2024 as numerous cultivation operations either scale back or halt production due to increasing losses. This diminished supply is expected to drive prices even higher. Elevated prices are dissuading some consumers from making purchases, which is simultaneously boosting the demand for cannabis in various regions, including Green Society Canada.
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Key Takeaways:
- In October 2023, the average price of dried cannabis flower was $1.10 per gram, a 6.8% increase from September’s average of $1.03 per gram.
- The cost of recently harvested flower with over 20% THC surged from $1.04 per gram at the end of the previous year to $1.32 per gram by April, reflecting a 27% increase overall.
- As cannabis flower prices escalate, consumers are seeking more affordable options, such as flowers with lower THC percentages, online dispensaries for better rates, or alternative products.
Canadian Cannabis Market General Trends
A report from the Chicago-based consultancy Brightfield Group anticipates that Canada’s cannabis market will double in size over the next five years. The report highlights the role of more retail stores and relaxed regulations in promoting this growth.
Brightfield Group forecasts that Canada’s cannabis market will expand at a yearly growth rate of 10%, reaching $8.8 billion in five years. This surge will primarily be driven by increased cannabis sales.
Bethany Gomez, managing director of Brightfield Group, noted that despite robust market growth in 2021, there remains significant potential for further expansion, particularly with increased retail access.
Overview of the Flower Market in a Canadian Cannabis Store
Despite the anticipated rise in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower continues to dominate market sales, its stronghold is gradually declining as other categories gain popularity. Wholesale prices have remained fairly stable, though some provinces have experienced unexpected price surges.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, marking a 6.8% increase from the September average of $1.03 per gram. Year-over-year prices indicate even more substantial changes.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
Flower prices in Canada can vary significantly between newly harvested and aged flower. The price increase is driven by the rapid sale of recently harvested flower, with the average age of these harvests dropping to just 65 days in April. Conversely, the average price for aged flowers has largely stagnated, resting at $0.69 per gram in April, a 1% decrease from the year-end price of $0.70 per gram.
- 30%+ THC: The average price for recently harvested flower increased by 2.7%, from $1.81 per gram in March to $1.86 per gram in April.
- 25-30% THC: Priced at a weighted average of $1.34 per gram, reflecting a 12.6% increase from the March settlement of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, an 11.2% decline from the March average of $1.07 per gram.
- 15-20% THC: Averaged $0.69 per gram in April, a 23.3% drop from the March settlement of $0.90 per gram.
Factors Influencing Price Hike
As the cannabis market continues to grow in 2024, several factors contribute to fluctuations in cannabis flower prices. Market dynamics and regulatory environments are closely linked to these factors.
Supply and Demand
The yields from cultivation significantly affect the quantity of cannabis available in the market, influenced by weather, pests, and diseases. Seasonal variations also play a role, as certain times of the year yield higher or lower production levels. For example, outdoor cannabis cultivation peaks during late summer and early fall, leading to an influx of supply that can reduce prices.
Consumer preferences can shift due to trends, disposable income changes, and evolving perceptions of cannabis. Increased demand for cannabis products can elevate prices, particularly if supply cannot keep up. Conversely, a decrease in demand, possibly due to economic downturns or shifts towards alternative products, can drive prices down.
Product Diversification
The cannabis market has seen significant diversification, with consumers showing interest in a variety of products beyond traditional recreational cannabis flower. This includes edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. Increased demand for these varied products can influence flower prices.
Technological Integration
The rise of online shopping platforms for cannabis products has simplified the purchasing process for consumers, allowing them to buy a diverse range of cannabis products from home. This convenience can drive consumption and affect wholesale demand and prices.
Delivery services have also become more prominent, enabling customers to receive cannabis products directly at their doorsteps. The convenience of delivery services can boost demand, particularly in regions where physical dispensaries are less accessible, thus impacting prices by increasing overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
With rising cannabis flower costs, consumers are actively seeking more affordable options. This includes purchasing flowers with lower THC levels, exploring online dispensaries beyond their region for cheaper alternatives, or opting for other products.
Online cannabis shops provide a variety of THC flowers at varying price points per gram. Given the larger customer base, online dispensaries often offer lower prices than physical stores and also run weekly promotions to cater to customers who may struggle with price increases from other cannabis flowers.
Below is a list of cannabis buds that are on sale at Green Society Canada. Get cannabis for $99 per ounce or 28.35 grams.
Conclusion
Experts anticipate that the cannabis market will keep expanding, with annual sales on the rise. Despite increasing demand, high-quality cannabis flower, particularly hybrid strains, is becoming more expensive. Several factors contribute to these price hikes, prompting customers to seek the best prices or explore alternative products such as vape carts. Online dispensaries offer discounted prices on cannabis flower, enabling customers to fulfill their needs without compromising 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 pose a financial strain on consumers, there are notable advantages:
- Improved Product Quality: Increased prices allow producers to invest more in cultivation practices and quality control, enhancing the safety and consistency of cannabis products.
- Enhanced Regulation: Rising prices can indicate stronger regulatory oversight, ensuring products meet safety and quality standards and protecting consumers from substandard goods.
- Economic Benefits: Price increases can boost state revenues through higher taxes, which can be reinvested in public services, fostering local cannabis businesses, job creation, and community economic development.
How can consumers find discounted cannabis amidst the price increase?
Consumers can discover lower cannabis prices through sales promotions, bulk purchases, loyalty programs, or by shopping at dispensaries known for competitive pricing. Some provinces also offer medical cannabis programs that provide lower 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 positive customer reviews to ensure they receive safe and effective products.
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