The prices of cannabis are on the rise. Throughout 2024, the availability of cannabis flower is expected to tighten as numerous cultivation operations either scale back or halt production due to increasing losses. This diminished supply is likely to push prices even higher. Rising costs are dissuading some consumers from making purchases, which is in turn escalating the demand for discounted cannabis in various regions, particularly from CannaBlossom Canada.
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Key Takeaways:
- As of October 2023, the average price of dried cannabis flower was $1.10 per gram, reflecting a 6.8% increase from the September average of $1.03 per gram.
- The price of recently harvested flower with THC levels over 20% increased from $1.04 per gram at the end of last year to $1.32 per gram by April, marking a 27% overall increase.
- With rising cannabis flower prices, consumers are exploring cheaper alternatives, such as lower THC flower percentages, online dispensaries for better deals, or other product options.
Canadian Cannabis Market General Trends
A report by Brightfield Group, based in Chicago, projects that Canada’s cannabis market will double within the next five years. The report highlights that increasing retail outlets and relaxed regulations will support this growth.
Brightfield Group anticipates that Canada’s cannabis market will expand at an annual rate of 10%, reaching $8.8 billion in five years. This growth is primarily driven by increased sales of edibles and vape products.
Bethany Gomez, managing director at Brightfield Group, noted that despite significant market growth in 2021, there remains substantial potential for further expansion, particularly with improved retail access.
Overview of the Flower Market in a Canadian Cannabis Store
Even with anticipated increases in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower continues to dominate sales, its market share is gradually declining 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, up 6.8% from the September average of $1.03 per gram. Year-over-year price changes have been even more pronounced.
Provinces Experiencing Price Hikes per THC Level on Newly Harvested Flower
The prices for cannabis in Canada vary significantly between newly harvested and aged flowers. The surge in prices can be attributed to the high demand for recently harvested flowers, which are being sold quickly, with the average age of these harvests dropping to just 65 days in April. Meanwhile, the average price for aged flowers has remained stable at $0.69 per gram in April, reflecting a 1% decrease from the prior year’s 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: 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) expects a recovery in May, projecting a 12.6% increase 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. Nevertheless, CCX anticipates a 13.0% recovery in May, estimating the price will rise to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market expands in 2024, several factors are causing fluctuations in cannabis flower prices, influenced by market dynamics and regulatory environments.
Supply and Demand
The yields from cultivation significantly impact the amount of cannabis available on 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, resulting in an influx of supply that may lower prices.
Trends, disposable income changes, and evolving cannabis perceptions can shift consumer preferences. A rise in demand for cannabis products can elevate prices, particularly if supply cannot keep up. Conversely, a drop in demand, potentially due to economic downturns or shifts towards alternative products, can lead to lower prices.
Product Diversification
The cannabis market has diversified significantly, with consumers expressing interest in a wide range of products beyond traditional recreational cannabis flower. This includes edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The increasing demand for diverse products can affect flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has simplified the purchasing process for consumers, enabling them to buy various cannabis products from home. This ease of access can enhance consumption and influence wholesale demand and prices.
Delivery services have also gained popularity, allowing customers to receive cannabis products directly at home. The convenience of these services can drive demand, particularly in areas where physical dispensaries are less accessible, thereby affecting overall market price dynamics.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As cannabis flower prices continue to climb, consumers are actively seeking more affordable options. This includes looking for flowers with lower THC levels, exploring online dispensaries for cheaper alternatives, or opting for different product types.
Online cannabis shops provide a range of THC flower at various price points per gram. With a wider customer base, online dispensaries can offer lower prices compared to physical stores. They also run weekly sales to provide customers with alternatives in light of the ongoing price increases for other cannabis flowers.
Check out the discounted cannabis options available at CannaBlossom Canada. Get $99 per ounce or 28.35 grams.
Conclusion
Experts forecast continued expansion in the cannabis market, with annual sales on the rise. Despite increasing demand, high-quality cannabis flower, particularly hybrid strains, is becoming more costly. Several factors contribute to these price hikes, prompting customers to seek the best deals or investigate alternative products like vape cartridges. Online dispensaries are providing discounted prices on cannabis flower, enabling customers to fulfill 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 rising cannabis prices may impose financial strain on consumers, they also present significant advantages:
- Improved Product Quality: Higher prices allow producers to invest in better cultivation practices and quality control, leading to superior, safer, and more consistent cannabis products.
- Enhanced Regulation: Increased prices can indicate stronger regulatory oversight, ensuring products meet safety and quality standards, thus protecting consumers from potentially harmful or substandard goods.
- Economic Benefits: Price increases can boost state revenues through higher taxes, which can be reinvested in public services, and stimulate 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 promotional sales, bulk buying, loyalty programs, or by choosing dispensaries known for better pricing. Additionally, some provinces have medical cannabis programs that offer reduced prices for eligible 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 strong customer reviews to ensure they receive safe and effective products.
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