Cannabis prices are on the rise. The availability of cannabis flower is tightening further throughout 2024 as more cultivation operations at Speed Greens Canada either cut back or halt production due to increasing losses. This decreased supply is expected to push prices even higher. Elevated prices are deterring some users from making purchases, which is consequently fueling the demand for cannabis in various regions.
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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 average of $1.03 per gram in September.
- 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 27% overall increase.
- As cannabis flower prices escalate, consumers are increasingly seeking more affordable options, such as lower THC flowers, online dispensaries for better deals, or alternative products.
Canadian Cannabis Market General Trends
A report from Brightfield Group, based in Chicago, anticipates that the cannabis market in Canada will double over the next five years. The report highlights that expanding retail locations and relaxed regulations will drive this growth.
Brightfield Group predicts that Canada’s cannabis market will grow at a rate of 10% annually, reaching $8.8 billion in five years. This growth will primarily be fueled by increased sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that despite robust market expansion in 2021, there remains considerable potential for further growth, especially with enhanced retail access.
Overview of the Flower Market in a Canadian Cannabis Store
Despite the anticipated rise in cannabis sales, challenges persist in the market for cannabis flower. While cannabis flower remains the top seller, its market dominance is gradually declining as other categories gain popularity. Wholesale prices have stayed relatively stable, though some provinces have witnessed unexpected price hikes.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, representing a 6.8% increase from the September average of $1.03 per gram. Year-over-year price changes are even more pronounced.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
Prices for cannabis in Canada can differ significantly between newly harvested and aged flower. Recently harvested cannabis is selling more rapidly, with the average age of these harvests dropping to a low of 65 days in April. Meanwhile, the average price for aged flowers has largely plateaued, settling at $0.69 per gram in April, down 1% from the year-end price of $0.70 per gram.
- 30%+ THC: The average price for recently harvested flowers 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 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 of $1.07 per gram. The cannabis Commodity Exchange (CCX) forecasts 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 anticipates a recovery in May, with a 13.0% increase to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market continues to grow in 2024, various factors are driving fluctuations in cannabis flower prices. Market dynamics and regulatory environments are intertwined with these influences.
Supply and Demand
The yields from cultivation significantly affect the cannabis available in the market, which can vary due to weather conditions, pests, and diseases. Seasonal variations also play a role, as certain periods yield higher or lower production levels. For example, outdoor cannabis cultivation, particularly at Speed Greens Canada, peaks during the late summer and early fall harvest seasons, leading to a surge in supply that can depress prices.
Consumer preferences may shift due to emerging trends, changes in disposable income, and evolving attitudes toward cannabis. An uptick in demand for cannabis products can elevate prices, especially when supply fails to keep pace. Conversely, a drop in demand—potentially due to economic downturns or shifts towards alternative products—can result in lower prices.
Product Diversification
The cannabis market has experienced considerable diversification, with consumers increasingly interested in a broad range of products beyond traditional recreational cannabis flower. These products include edibles, vape pens, pre-rolls, tinctures, and concentrates. The rising demand for these diverse offerings can influence flower prices.
Technological Integration
The popularity of online shopping platforms for cannabis products has made it easier for consumers to purchase a wide variety of cannabis products from home. This convenience can raise consumption levels and affect wholesale demand and prices.
Delivery services have also gained traction, allowing customers to receive cannabis products directly at their doorsteps. The convenience of these services can boost demand, especially in areas where physical dispensaries are less accessible, thereby impacting prices by increasing overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As cannabis flower prices rise, consumers are searching for more economical options. This includes buying lower THC flowers, exploring online dispensaries beyond their region for more affordable choices, or selecting alternative products.
Online cannabis shops offer a variety of THC flowers at different price points per gram. Thanks to a broader customer base, online dispensaries can provide lower prices than physical stores. They also run weekly promotions to assist customers in finding alternatives when facing price increases on other cannabis flowers.
Here’s a selection of cannabis buds currently on sale at Speed Greens Canada. Get cannabis for $99 per ounce or 28.35 grams.
Conclusion
Experts anticipate that the cannabis market will keep expanding, with annual sales on the rise. Despite the increasing demand, high-quality cannabis flower, such as hybrid strains, is becoming pricier. Several factors contribute to these price hikes, prompting customers to seek the best prices or explore alternative products like vape carts. Online dispensaries like Speed Greens Canada provide discounted prices on cannabis flower, enabling customers to satisfy 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 rising cannabis prices can impose financial strain on consumers, there are significant benefits:
- 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: Increased prices can indicate 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 supports 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 promotional sales, bulk purchases, loyalty programs, or by shopping at dispensaries known for competitive pricing. Some provinces also offer 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 are still obtaining safe and effective products.
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