Cannabis prices are on the rise. The availability of cannabis flower is becoming increasingly limited throughout 2024 as more cultivation operations reduce or halt production due to growing losses. This tighter supply is expected to push prices higher. The increased costs are discouraging some users from making purchases, leading to a greater demand for cannabis in various regions.
A Chicago-based industry consultancy, Brightfield Group, predicts that Canada’s cannabis market will double over the next five years. The report highlights that expanding retail stores and easing regulations will drive this growth. Brightfield Group forecasts that the cannabis market in Canada will grow at a yearly rate of 10%, reaching $8.8 billion in five years, mainly fueled by higher sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that while the market saw robust growth in 2021, there remains substantial potential for further expansion, particularly with improved retail access.
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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 price of recently harvested flower with 20%+ THC increased from $1.04 per gram at the end of last year to $1.32 per gram by April, marking a 27% rise overall.
- As cannabis flower prices go up, consumers are looking for cheaper alternatives such as lower THC flower, online dispensaries for better prices, or other product options.
Overview of the Flower Market in A Canadian cannabis Store
Despite the anticipated rise in cannabis sales, the market for cannabis flower faces challenges. While cannabis flower continues to lead in sales, its dominance is slowly diminishing as other categories gain popularity. Wholesale prices have largely remained stable, although some provinces have experienced unexpected price hikes.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, reflecting a 6.8% rise from the previous month’s average of $1.03 per gram. Year-over-year price changes are even more pronounced.
Provinces Experiencing Price Increases Based on THC Levels
Prices for cannabis flowers in Canada vary between newly harvested and aged flower. Recently harvested flowers are selling more quickly, with their average age dropping to a low of 65 days in April. The average price for aged flowers has stagnated at $0.69 per gram in April, representing a 1% decrease from the year-end price of $0.70 per gram.
- 30%+ THC: Recently harvested flower prices rose by 2.7%, from $1.81 per gram in March to $1.86 per gram in April.
- 25-30% THC: Averaged $1.34 per gram, a 12.6% increase from March’s price of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, down 11.2% from March’s average of $1.07 per gram. The cannabis Commodity Exchange (CCX) anticipates a recovery in May, with prices expected to rise by 12.6% to $1.07 per gram.
- 15-20% THC: Averaged $0.69 per gram in April, a 23.3% decline from March’s price of $0.90 per gram. However, CCX forecasts a recovery in May, with a 13.0% increase to $0.78 per gram.
Factors Influencing Price Increases
As the cannabis market expands in 2024, numerous factors are contributing to fluctuations in cannabis flower prices. Market dynamics and regulatory conditions are closely linked to these influences.
Supply and Demand
The yields from cultivation significantly impact the amount of cannabis available in the market, which can vary due to weather, pests, and diseases. Seasonal changes also contribute, with certain times of year producing either higher or lower yields. For example, outdoor cannabis cultivation peaks during the harvest season in late summer and early fall, potentially leading to price drops.
Consumer preferences may shift due to trends, disposable income changes, and evolving views on cannabis. An uptick in demand for cannabis products can raise prices, particularly if supply cannot keep up. Conversely, a decline in demand—potentially due to economic downturns or shifts toward alternative products—can lead to lower prices.
Product Diversification
The cannabis market has undergone significant diversification, with consumers increasingly interested in a wide array of products beyond traditional recreational cannabis flower. These products include edibles, vape pens, pre-rolls, tinctures, and concentrates. The rising demand for these diverse products can influence flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis has made it easier for consumers to access a vast range of products from home. This convenience can lead to increased consumption and affect wholesale demand and prices. Delivery services have also gained prominence, allowing customers to receive cannabis products directly at their doorsteps. This added convenience can boost demand, particularly in areas where physical dispensaries are less accessible, thereby influencing prices by increasing overall market demand.
Price Hikes Fuel Demand for Discounted Cannabis, Customers Order Online
As cannabis flower prices rise, consumers are searching for more affordable options. This includes looking for lower THC products, seeking online dispensaries outside their region for better deals, or considering alternative products.
Online cannabis shops provide a variety of THC flower options at different price points per gram. With a wider customer base, online dispensaries can offer lower prices than brick-and-mortar stores. They often run weekly promotions to provide customers with alternatives amid rising prices.
Here are some cannabis buds currently available at Kush Station Canada: Get cannabis for $99 per ounce or 28.35 grams.
Conclusion
Experts expect the cannabis market to continue growing, with annual sales on the rise. Despite increased demand, high-quality cannabis flower, particularly hybrid strains, is becoming pricier. Various factors contribute to these price increases, prompting customers to seek the best deals or explore alternative products like vape cartridges. Online dispensaries offer discounted prices on cannabis flower, enabling customers to fulfill their needs without compromising quality or resorting to less desirable products.
Frequently Asked Questions
Are there any benefits to the price increase for consumers?
Although higher cannabis prices can strain consumers financially, there are several notable 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: Higher prices can indicate stronger regulatory oversight, ensuring products meet safety and quality standards, protecting consumers from potentially harmful goods.
- Economic Benefits: Price increases 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 sales promotions, bulk purchases, loyalty programs, or by shopping at dispensaries known for lower prices. Some provinces also have medical cannabis programs offering 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 positive customer reviews to ensure safe and effective products.
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