Cannabis prices are on the rise. The supply of cannabis flower is tightening further in 2024 as many cultivation operations at Chronic Paradise Canada either reduce or cease production due to increasing losses. This reduced supply is likely to drive prices even higher. Elevated prices are deterring some users from making purchases, leading to a surge in demand for cannabis across 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 price of recently harvested flower with 20%+ THC rose from $1.04 per gram at the end of last year to $1.32 per gram by April, marking a 27% increase overall.
- As cannabis flower prices climb, consumers are looking for cheaper options such as lower THC flower percentages, online dispensaries for better deals, or alternative products.
Canadian Cannabis Market General Trends
A report by Brightfield Group predicts that Canada’s cannabis market will double in the next five years. The report highlights that increased retail store openings and relaxed regulations will drive this growth.
Brightfield Group forecasts that Canada’s cannabis market will grow at an annual rate of 10%, reaching $8.8 billion in five years. This growth will primarily be fueled by heightened sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that despite robust market growth in 2021, there remains significant potential for further expansion, particularly with improved retail access.
Overview of the Flower Market in A Canadian Cannabis Store
While cannabis sales are projected to rise, challenges persist in the cannabis flower market. Though cannabis flower still dominates market sales, its share is slowly diminishing as other categories gain popularity. Wholesale prices remain relatively stable, although some provinces are experiencing unexpected increases.
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 indicate even more significant fluctuations.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The price of cannabis flower varies significantly between newly harvested and aged flower. Recently harvested flowers are moving quickly, with the average age of these harvests dipping to 65 days in April. The average price for aged flowers has largely stagnated, resting 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%, climbing 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% drop from the March average price 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: 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. Nevertheless, CCX expects a recovery for this category in May, with a 13.0% increase to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market continues to evolve in 2024, various factors are affecting fluctuations in cannabis flower prices. Market dynamics and regulatory environments intertwine with these influences.
Supply and Demand
Cultivation yields significantly impact the amount of cannabis available in the market, which fluctuates due to weather conditions, pests, and diseases. Seasonal variations also affect production levels, with outdoor cannabis cultivation peaking during harvest time in late summer and early fall, leading to an influx of supply that can drive prices down.
Consumer preferences can shift due to trends, changes in disposable income, and evolving perceptions of cannabis. An increase in demand for cannabis products can elevate prices, especially if supply cannot keep pace. Conversely, a decrease in demand, possibly due to economic downturns or shifts towards alternative products, can result in lower prices.
Product Diversification
The cannabis market has experienced significant diversification, with consumers showing interest in a wide array of products beyond traditional recreational cannabis flower. These products include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The growing demand for these varied products can impact flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has simplified the process for consumers to purchase a wide variety of cannabis products from home. This convenience can increase consumption and influence wholesale demand and prices.
Delivery services are becoming more prevalent, allowing customers to receive cannabis products directly at their doorsteps. This convenience can boost demand, particularly in areas where physical dispensaries are less accessible, impacting prices by increasing overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As the cost of cannabis flower rises, consumers are seeking more affordable options. This includes buying flower with lower THC levels, exploring online dispensaries outside their regions for cheaper alternatives, or opting for different products.
Online cannabis shops provide various THC flower at different price points per gram. Thanks to a broader customer base, online dispensaries can offer lower prices compared to physical stores. They also frequently provide weekly sales, giving customers an alternative if they cannot afford the price hikes of other cannabis flowers.
Here is a list of cannabis buds currently on sale at Chronic Paradise Canada. Get cannabis for $99 per ounce or 28.35 grams.
Conclusion
Experts anticipate that the cannabis market will continue to grow, with annual sales on the rise. Despite increasing demand, high-quality cannabis flower, such as hybrid strains, is becoming pricier. Various factors contribute to these price hikes, prompting customers to seek the best prices or explore alternative products like vape carts. Online dispensaries offer discounted prices on cannabis flower, enabling customers to satisfy their needs without compromising 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 burden consumers financially, there are notable benefits:
- 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 can signal stronger regulatory oversight, ensuring that products meet safety and quality standards, protecting consumers from potentially harmful or substandard goods.
- Economic Benefits: The rise in prices can boost 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 purchasing, loyalty programs, or by shopping at dispensaries known for lower prices. 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 seek 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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