Cannabis prices are on the rise. The availability of cannabis flower is tightening throughout 2024 as more cultivation operations either cut back or halt production due to increasing losses. This limited supply is expected to push prices even higher. Rising prices are deterring some users from purchasing, which in turn is heightening the demand for discounted 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 the average of $1.03 per gram in September.
- The price of fresh flower with over 20% THC surged from $1.04 per gram at the end of last year to $1.32 per gram by April, amounting to a 27% overall increase.
- As cannabis flower prices escalate, consumers are seeking cheaper alternatives, such as lower THC flower, online dispensaries for better rates, or different products altogether.
Canadian Cannabis Market General Trends
A report from the Chicago-based consultancy Brightfield Group predicts that Canada’s cannabis market will double in the next five years. The report highlights that more retail stores and relaxed regulations will drive this growth.
Brightfield Group anticipates that Canada’s cannabis market will expand at a yearly rate of 10%, reaching $8.8 billion in five years. This growth will largely be fueled by increased sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that despite significant market growth in 2021, there remains considerable potential for further expansion, particularly with enhanced 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 remains the leading category in sales, its dominance is gradually waning as other categories gain popularity. Wholesale prices have remained 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, a 6.8% increase from the previous month’s average of $1.03 per gram. Year-over-year price changes show even more notable shifts.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The price of flowers in Canada varies between newly harvested and aged flower. Recently harvested flowers are selling more quickly, with the average age of these harvests dropping to 65 days in April. Conversely, the average price for aged flowers has stagnated, settling at $0.69 per gram in April, marking 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: 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, an 11.2% decrease from the March average price of $1.07 per gram. The cannabis Commodity Exchange (CCX) anticipates a recovery in May, with prices projected 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% decline from March’s $0.90 per gram. However, CCX expects 15-20% THC to recover in May, with a projected increase of 13.0% to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market continues to grow in 2024, various factors are influencing fluctuations in cannabis flower prices. Market dynamics and regulatory environments are intertwined with these factors.
Supply and Demand
Cultivation yields significantly affect the quantity of cannabis available in the market, which varies due to weather conditions, pests, and diseases. Seasonal variations also influence production levels, with outdoor cannabis cultivation peaking during the harvest season in late summer and early fall, leading to increased supply that can lower prices.
Consumer preferences may shift due to trends, changes in disposable income, and evolving perceptions of cannabis. A rise in demand for cannabis products can drive prices up, especially if supply cannot keep pace. Conversely, a decrease in demand, possibly due to economic downturns or shifts toward alternative products, can result in lower prices.
Product Diversification
The cannabis market has witnessed significant diversification, with consumers expressing interest in a broad range of products beyond traditional recreational cannabis flower. These products include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The increased demand for these varied products can influence flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has made it easier for consumers to purchase a vast array of cannabis products from home. This convenience can enhance consumption and impact wholesale demand and prices.
Delivery services have also gained prominence, allowing customers to receive cannabis products directly at their doorsteps. The convenience of delivery services can drive demand, particularly in regions where physical dispensaries are less accessible, thus influencing prices by boosting overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As the cost of cannabis flower rises, consumers are actively seeking more affordable options. This includes purchasing flower with lower THC levels, exploring online dispensaries outside their region for cheaper alternatives, or opting for different products.
Online cannabis shops provide a variety of THC flower at differing price points per gram. With a wider customer base, online dispensaries often offer lower prices compared to physical stores. They also run weekly sales, providing customers with alternatives if they cannot afford the price increases of other cannabis flowers.
Below is a list of cannabis buds available for sale at Online Dispensary Canada Shop. Get $99 per ounce or 28.35 grams.
Conclusion
Experts predict that the cannabis market will continue expanding, with annual sales on the rise. Despite increased demand, high-quality cannabis flower, including hybrid strains, is becoming pricier. Various factors contribute to these price increases, prompting customers to seek the best prices or explore alternative products like vape carts. Online dispensaries, such as Online Dispensary Canada Shop, offer discounted prices on cannabis flower, enabling customers to fulfill their needs without compromising on quality or settling for unsatisfactory products.
Frequently Asked Questions
Are there any benefits to the price increase for consumers?
While higher cannabis prices may impose a financial burden on consumers, notable benefits include:
- Improved Product Quality: Higher prices enable producers to invest more in cultivation practices and quality control, leading to better, safer, and more consistent cannabis products.
- Enhanced Regulation: Increased prices may indicate stronger regulatory oversight, ensuring products meet safety and quality standards, thereby protecting consumers from potentially harmful or substandard goods.
- Economic Benefits: Rising prices can boost state revenues through higher taxes, which can be reinvested in public services. This also supports the growth of local cannabis businesses, fosters job creation, and promotes economic development within communities.
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 rates. Some provinces also have medical cannabis programs that offer reduced prices for qualifying patients.
What should consumers look for when purchasing discounted cannabis?
When buying lower-priced cannabis, 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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