The prices of cannabis are on the rise. Throughout 2024, the supply of cannabis flower is tightening as various cultivation operations at MMJDirect Canada either reduce or stop production due to increasing losses. This decrease in supply is expected to push prices even higher. As prices climb, some users are deterred from making purchases, which consequently boosts the 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 cost of recently harvested flower with over 20% THC surged from $1.04 per gram at the end of last year to $1.32 per gram by April, marking a total increase of 27%.
- As prices for cannabis flower rise, consumers are increasingly seeking out cheaper alternatives, such as lower THC flower percentages, exploring online dispensaries for better prices, or turning to alternative products.
Canadian Cannabis Market General Trends
A report by Brightfield Group, based in Chicago, anticipates that the cannabis market in Canada will double in the next five years. The report highlights that the expansion of retail outlets and relaxed regulations will be key drivers of this growth.
Brightfield Group forecasts a yearly growth rate of 10%, potentially reaching $8.8 billion in five years. This growth will primarily be fueled by an increase in sales of edibles and vape products.
Bethany Gomez, managing director at Brightfield Group, states that despite robust market growth in 2021, there remains considerable potential for further expansion, particularly with improved retail access.
Overview of the Flower Market in A Canadian Cannabis Store
Despite the projected surge in cannabis sales, there are challenges in the cannabis flower market. While cannabis flower remains the top-selling category, its dominance is gradually declining as other categories gain popularity. Wholesale prices have stayed relatively stable, although some provinces have faced unexpected price hikes.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, a 6.8% rise from September’s average of $1.03 per gram. Year-over-year prices reveal even more notable 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 flower. Recently harvested flowers are selling more rapidly, with their average age dropping to just 65 days in April. In contrast, the price for aged flowers has stagnated, averaging $0.69 per gram in April, which is a 1% dip from the year-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 of $1.34 per gram, marking a 12.6% increase from the March average of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, reflecting an 11.2% decline from the March price of $1.07 per gram. The Cannabis Commodity Exchange (CCX) predicts 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% drop from March’s average of $0.90 per gram. Nonetheless, CCX anticipates a recovery in May, with prices expected to increase by 13.0% to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market expands in 2024, various elements are influencing fluctuations in cannabis flower prices, intertwining market dynamics and regulatory factors.
Supply and Demand
The quantity of cannabis available in the market is heavily influenced by cultivation yields, which can vary due to weather conditions, pests, and diseases. Seasonal variations also play a role, with specific times of the year yielding higher or lower production. For example, outdoor cannabis cultivation peaks during the late summer and early fall harvest, leading to an influx of supply that can lower prices.
Consumer preferences may 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 cannot keep pace. Conversely, a decrease in demand—potentially due to economic downturns or shifts toward alternative products—may result in lower prices.
Product Diversification
The cannabis market has seen substantial diversification, as consumers exhibit interest in products beyond traditional recreational cannabis flower. These include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The heightened demand for these varied products can affect flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has simplified the purchasing process for consumers, allowing them to buy a wide array of cannabis products conveniently. This ease of access can boost consumption and affect wholesale demand and pricing.
Delivery services have also become increasingly prominent, enabling customers to receive cannabis products directly at their doorsteps. This convenience can enhance demand, especially in regions with limited access to physical dispensaries, thus impacting prices by increasing overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As the cost of cannabis flower escalates, consumers are in search of more affordable options. This includes purchasing flowers with lower THC levels, exploring online dispensaries for cheaper alternatives, or opting for different products.
Online cannabis shops provide a diverse selection of THC flower at various price points per gram. With a broader customer base, online dispensaries can offer lower prices than physical stores and often provide weekly sales, giving customers alternatives if they are unable to afford the rising prices of other cannabis flowers.
Below is a selection of cannabis buds available at MMJDirect Canada. Get cannabis for just $99 per ounce or 28.35 grams.
Conclusion
Experts foresee continued expansion in the cannabis market, with annual sales on the rise. Despite the increasing demand, high-quality cannabis flower, such as hybrid strains, is becoming pricier. Multiple factors contribute to these price hikes, prompting customers to seek the best deals or consider alternative products like vape cartridges. Online dispensaries offer discounted prices on cannabis flower, enabling customers to fulfill their needs without compromising on 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 create financial strain for consumers, there are significant benefits:
- Improved Product Quality: Higher prices allow producers to invest more in cultivation and quality control, resulting in better, safer, and more consistent cannabis products.
- Enhanced Regulation: Rising prices can indicate stronger regulatory oversight, ensuring that products meet safety and quality standards to protect consumers from potentially harmful or substandard goods.
- Economic Benefits: Increased prices can lead to higher state revenues through taxes, which can be reinvested in public services. This 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 find lower cannabis prices through sales promotions, bulk purchases, loyalty programs, or by shopping at dispensaries known for offering lower prices. Some provinces also have 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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