The prices of cannabis are on the rise. Throughout 2024, the supply of cannabis flower is expected to become even tighter as numerous cultivation operations either cut back or halt production due to increasing losses. This limited supply is likely to push prices higher. As prices escalate, some consumers are deterred from making purchases, subsequently increasing the demand for discounted cannabis in various regions, particularly through WeedSmart Canada.
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Key Takeaways:
- As of 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.
- Recently harvested flower with a THC level of 20%+ saw a price increase from $1.04 per gram at the end of the previous year to $1.32 per gram by April, totaling a 27% rise.
- With rising cannabis flower prices, consumers are seeking more affordable options, such as lower THC flower, 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 underscores that the expansion of retail stores and easing regulations will drive this growth.
Brightfield Group forecasts an annual growth rate of 10% for Canada’s cannabis market, estimating it will reach $8.8 billion within five years. This growth will primarily be fueled by increased sales of edibles and vape products.
Bethany Gomez, managing director at Brightfield Group, noted that despite robust market growth in 2021, there remains a significant potential for further expansion, particularly with enhanced retail access.
Overview of the Flower Market in a Canadian Cannabis Store
Despite the projected increase in cannabis sales, challenges persist in the market for cannabis flower. Although cannabis flower currently leads in market sales, its supremacy is gradually diminishing as other categories gain popularity. Wholesale prices have remained fairly stable, although some provinces have experienced unexpected price hikes.
Based on the latest data, the average price of dried cannabis flower in October 2023 was $1.10 per gram, reflecting a 6.8% increase from September’s average of $1.03 per gram. Year-over-year price changes show even more significant trends.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The price of cannabis flowers in Canada varies significantly between newly harvested and aged flowers. The rising prices are attributed to the quick sales of recently harvested flowers, with their average age dropping to 65 days in April. In contrast, the average price for aged flowers has mostly stagnated, settling at $0.69 per gram in April, a 1% decrease from the end-of-year 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% decrease from March’s average of $1.07 per gram. The cannabis Commodity Exchange (CCX) predicts 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 March’s settlement price of $0.90 per gram. However, CCX anticipates a recovery in May, with a 13.0% increase to $0.78 per gram.
Factors Influencing Price Hike
As the cannabis market expands in 2024, various factors are causing fluctuations in cannabis flower prices. Market dynamics and regulatory frameworks intertwine with these influences.
Supply and Demand
The yields from cultivation significantly impact the amount of cannabis available in the market, which can fluctuate due to weather, pests, and diseases. Seasonal variations also contribute, with certain times of the year yielding higher or lower production levels. For example, outdoor cannabis cultivation peaks during the late summer and early fall harvest, resulting in an influx of supply that can decrease prices.
Consumer preferences may shift based on trends, disposable income changes, and evolving views on cannabis. An uptick in demand for cannabis products can lead to higher prices, especially if supply struggles to keep pace. Conversely, a decline in demand—potentially due to economic downturns or shifts towards alternative products—can lead to lower prices.
Product Diversification
The cannabis market has witnessed considerable diversification, with consumers expressing interest in a wide array of products beyond traditional recreational cannabis flower. These include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The growing demand for these varied products can influence flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has simplified the purchasing process for consumers, allowing them to buy a vast selection of cannabis products from home. This convenience can enhance consumption and affect wholesale demand and prices.
Delivery services have also gained prominence, enabling customers to receive cannabis products directly at their doorsteps. The ease of delivery services can increase demand, particularly in areas where physical dispensaries are less accessible, ultimately impacting prices by boosting overall market demand.
Price Hike Drives Demand for Discounted Cannabis, Customers Order Online
As cannabis flower prices continue to rise, consumers are on the lookout for more affordable options. This includes seeking out lower THC level flowers, exploring online dispensaries outside their region for cheaper choices, or considering alternative products.
Online cannabis shops offer a range of THC flowers at various price points per gram. Thanks to a broader customer base, online dispensaries like WeedSmart Canada can provide lower prices compared to physical stores. They also run weekly sales, offering customers alternatives to higher-priced cannabis flower.
Below is a selection of cannabis buds available at WeedSmart Canada for just $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, including hybrid strains, is becoming more expensive. Several factors are driving these price increases, prompting customers to seek the best deals or explore alternative products like vape cartridges. Online dispensaries provide discounted prices on cannabis flower, enabling customers to fulfill their needs without sacrificing 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 strain consumers financially, there are notable advantages:
- Improved Product Quality: Increased prices allow producers to invest more in cultivation practices and quality control, resulting in better, safer, and more consistent cannabis products.
- Enhanced Regulation: Higher prices may indicate stronger regulatory oversight, ensuring that products meet safety and quality standards, thereby protecting consumers from potentially harmful or substandard goods.
- Economic Benefits: Price increases can enhance state revenues through higher taxes, which can be reinvested in public services. This also promotes the growth of local cannabis businesses, job creation, and economic development.
How can consumers find discounted cannabis in light of the price increase?
Consumers can discover lower cannabis prices through promotional sales, bulk purchasing, loyalty programs, or by shopping at dispensaries known for competitive pricing. Some provinces have medical cannabis programs that offer 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 receive safe and effective products.
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