Prices for cannabis are on the rise. The availability of cannabis flower continues to decline throughout 2024 as more cultivation operations cut back or halt production due to increasing losses. This decrease in supply is expected to push prices even higher. Elevated prices are deterring some consumers from buying, thereby heightening the demand for WhitePalm Canada’s discounted cannabis across various regions.
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Key Takeaways:
- In October 2023, the average price of dried cannabis flower reached $1.10 per gram, marking a 6.8% increase from September’s average of $1.03 per gram.
- The price of freshly harvested flower with 20%+ THC climbed from $1.04 per gram at the end of last year to $1.32 per gram by April, an overall increase of 27%.
- As cannabis flower prices escalate, consumers are seeking more affordable alternatives, such as lower THC flower options, online dispensaries for better pricing, or different product types.
Canadian cannabis Market General Trends
A report from Brightfield Group, an industry consultancy based in Chicago, predicts that Canada’s cannabis market will double over the next five years. The report highlights that increasing the number of retail stores and easing regulations will drive this growth.
Brightfield Group anticipates a 10% annual growth rate for Canada’s cannabis market, reaching $8.8 billion in five years. This growth will primarily be fueled by higher sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that despite robust market growth in 2021, there remains substantial potential for further expansion, especially with better retail access.
Overview of the Flower Market in A Canadian cannabis Store
Even with the expected increase in cannabis sales, challenges persist within the cannabis flower market. While cannabis flower still leads in market 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 September average of $1.03 per gram. Year-over-year price changes show even more significant variations.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The price of cannabis flowers varies between newly harvested and aged flowers. Recently harvested flowers are selling faster, with their average age dropping to 65 days in April. In contrast, 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: 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% increase from the March 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) expects a recovery in May, with prices projected 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% decline from the March settlement price of $0.90 per gram. Nonetheless, CCX forecasts a recovery in May for this THC range, expecting a 13.0% increase to $0.78 per gram.
Factors Influencing Price Hike
The cannabis market is set to expand in 2024, with various factors contributing to fluctuations in cannabis flower prices. Market dynamics and regulatory environments are closely linked to these factors.
Supply and Demand
Yields from cultivation significantly impact the amount of cannabis available in the market, which can fluctuate due to weather, pests, and diseases. Seasonal changes also affect production levels, with outdoor cannabis cultivation peaking during late summer and early fall harvests, resulting in an influx of supply that can lower prices.
Consumer preferences may shift due to emerging trends, changes in disposable income, and evolving perceptions of cannabis. Increased demand for cannabis products can drive prices higher, particularly when supply struggles to keep up. Conversely, a decrease in demand, potentially due to economic downturns or shifts toward alternative products, can lead to price reductions.
Product Diversification
The cannabis market has experienced significant diversification, with consumers showing interest in an array of products beyond traditional recreational cannabis flower. These products encompass edibles, vape pens, pre-rolls, tinctures, and concentrates such as live resin. The rising demand for these diverse products can influence flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has streamlined the purchasing process for consumers, allowing them to buy a wide variety of cannabis products from home. This convenience can enhance consumption and impact wholesale demand and prices.
Delivery services have gained popularity, enabling customers to receive cannabis products directly at home. The convenience of delivery can boost demand, especially in regions with fewer physical dispensaries, thereby affecting prices by increasing overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As cannabis flower prices continue to rise, consumers are looking for more affordable options. This includes purchasing lower THC flowers, exploring online dispensaries for better deals, or choosing alternative products.
Online cannabis shops offer a wide selection of THC flowers at various price points per gram. Due to a broader customer base, online dispensaries often provide lower prices compared to physical stores. They also feature weekly sales to assist customers who may be struggling with rising prices of other cannabis products.
Here’s a selection of cannabis buds available at WhitePalm Canada for $99 per ounce or 28.35 grams.
Conclusion
Experts anticipate that the cannabis market will keep growing, with annual sales on the rise. Despite increasing demand, high-quality cannabis flower, such as hybrid strains, is becoming more costly. Multiple factors contribute to these price hikes, prompting customers to seek the best deals or explore alternative products like vape carts. Online dispensaries provide discounted prices on cannabis flower, enabling customers to meet their needs without compromising quality or settling for less desirable options.
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 benefits arise:
- Improved Product Quality: Higher prices allow producers to invest more in cultivation practices 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, ultimately protecting consumers from substandard goods.
- Economic Benefits: Increasing prices can elevate state revenues through higher taxes, which can be reinvested in public services. It also fosters the growth of local cannabis businesses, job creation, and economic development within communities.
How can consumers find discounted cannabis in light of the price increase?
Consumers can discover lower cannabis prices through sales promotions, bulk buying options, loyalty programs, or by shopping at dispensaries known for lower prices. Some provinces also feature medical cannabis programs that provide 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 they are acquiring safe and effective products.
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