The prices of cannabis are on the rise. In 2024, the supply of cannabis flower is becoming increasingly limited as more cultivation operations at Budmail Canada either cut back or halt production due to escalating losses. This decrease in supply is expected to push prices even higher. As prices rise, some consumers are deterred from purchasing, leading to a surge in 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 the previous month’s average of $1.03 per gram.
- The price for newly harvested flower containing 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 escalate, consumers are exploring cheaper alternatives such as lower THC flower options, online dispensaries for better deals, or different products.
Canadian Cannabis Market General Trends
A report by the Chicago-based consultancy Brightfield Group anticipates that Budmail Canada’s cannabis market will double over the next five years. The report highlights that the growth will be fueled by an increase in retail outlets and the relaxation of regulations.
Brightfield Group forecasts a 10% annual growth rate for Budmail Canada’s cannabis market, projecting it to reach $8.8 billion in five years, primarily driven by increased sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that despite significant 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
Despite the anticipated growth in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower continues to lead in sales, its dominance is gradually diminishing as other product categories gain popularity. Wholesale prices have remained relatively stable, although some provinces have observed unexpected price hikes.
As of October 2023, the average price for dried cannabis flower was $1.10 per gram, representing a 6.8% increase from the September average of $1.03 per gram. Year-over-year price changes show even more pronounced fluctuations.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The pricing of flowers in Canada varies from newly harvested to aged flowers. Recently harvested flowers are selling more rapidly, with the average age of these harvests dropping to a low of 65 days in April. The average price for aged flowers has largely plateaued at $0.69 per gram in April, a 1% decrease from the year-end price of $0.70 per gram.
- 30%+ THC: The average price for recently harvested flowers increased by 2.7%, from $1.81 per gram in March to $1.86 per gram in April.
- 25-30% THC: This category traded at an average price of $1.34 per gram, reflecting a 12.6% increase from the March price of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, marking an 11.2% decrease from the March average of $1.07 per gram. The cannabis Commodity Exchange (CCX) anticipates a recovery in May, expecting prices 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 the March price of $0.90 per gram. However, CCX forecasts a recovery for this category in May, with a projected increase of 13.0% to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market continues to grow in 2024, various factors are affecting fluctuations in cannabis flower prices, heavily influenced by market dynamics and regulatory environments.
Supply and Demand
Yields from cultivation significantly impact the amount of cannabis available in the market, which can vary due to weather conditions, pests, and diseases. Seasonal variations also contribute, as certain times of the year yield higher production. For example, outdoor cannabis cultivation peaks during late summer and early fall harvests, leading to increased supply that can lower prices.
Shifts in consumer preferences can occur due to trends, disposable income changes, and evolving perspectives on cannabis. An uptick in demand for cannabis products can drive prices higher, particularly if supply cannot keep pace. Conversely, a decline in demand, possibly due to economic downturns or shifts toward alternative products, can lead to price reductions.
Product Diversification
The cannabis market has experienced notable diversification, with consumers interested in a broad range of products beyond traditional recreational cannabis flower. These include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The rising demand for these products can affect flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has facilitated easier access for consumers to a wide array of cannabis offerings from the comfort of their homes. This convenience can drive up consumption, impacting wholesale demand and prices.
Delivery services have also gained prominence, allowing customers to receive cannabis products directly at their homes. The convenience of such services tends to boost demand, particularly in areas with limited access to physical dispensaries, thus influencing prices by increasing overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
With the rising cost of cannabis flower, consumers are on the lookout for more budget-friendly options. This includes purchasing lower THC flower, searching for online dispensaries beyond their locality for cheaper alternatives, or considering other products.
Online cannabis shops provide a variety of THC flower at different price points per gram. Due to a wider customer base, online dispensaries often offer lower prices compared to physical stores, alongside weekly sales to provide customers with alternatives amid rising prices of other cannabis flowers.
Below is a list of cannabis buds available at discounted rates at Budmail Canada. Get 28.35 grams for just $99.
Conclusion
Experts predict continued expansion in the cannabis market, with annual sales on the rise. Despite increased demand, high-quality cannabis flower, such as hybrid strains, is becoming more expensive. Various factors contribute to these price increases, prompting customers to search for the best prices or explore alternative products like vape carts. Online dispensaries offer discounted prices on cannabis flower, enabling customers to meet 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 elevated cannabis prices can impose financial pressure on consumers, there are significant benefits:
- Improved Product Quality: Higher prices allow producers to invest more in cultivation practices and quality control, leading to superior, safer, and more consistent cannabis products.
- Enhanced Regulation: Rising prices can indicate stronger regulatory oversight, ensuring products meet safety and quality standards that protect consumers from potentially harmful or subpar goods.
- Economic Benefits: Increased prices can boost state revenues through higher taxes, which can be reinvested in public services. This also fosters growth in 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 buying, loyalty programs, or by frequenting dispensaries known for lower prices. Some provinces also have medical cannabis programs that offer reduced prices for qualified patients.
What should consumers look for when purchasing discounted cannabis?
When buying lower-priced cannabis, consumers should prioritize quality assurance, lab testing results, reputable brands, and dispensaries with positive customer reviews to ensure safety and efficacy.
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