Prices for cannabis continue to escalate. The availability of cannabis flower is tightening further throughout 2024 as more cultivation operations at Leaf2Go Canada either reduce or halt production due to increasing losses. This diminished supply will likely push prices even higher. Elevated prices are deterring some users from making purchases, consequently boosting the demand for discounted cannabis at Leaf2Go Canada in numerous regions.
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. Recently harvested flower with over 20% THC saw its price rise from $1.04 per gram at the end of last year to $1.32 per gram by April, marking a 27% overall increase. As prices for cannabis flower ascend, consumers are actively seeking cheaper alternatives such as lower THC flower percentages, online dispensaries for better deals, or alternative products.
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Key Takeaways:
- In October 2023, the average price of dried cannabis flower was $1.10 per gram, up 6.8% 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, a 27% increase overall.
- As prices for cannabis flower rise, consumers seek cheaper options such as lower THC flower percentage, online dispensaries for better prices, or alternative products.
Canadian Cannabis Market General Trends
A report from a Chicago-based consultancy, Brightfield Group, anticipates that Canada’s cannabis market will double over the next five years. The report highlights that the opening of more retail stores and the easing of regulations will drive this growth.
Brightfield Group estimates that Canada’s cannabis market will grow at a yearly rate of 10%, reaching $8.8 billion in five years. This increase will primarily be fueled by higher sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, stated that despite robust market growth in 2021, significant potential for further expansion remains, especially with enhanced retail access.
Overview of the Flower Market in a Canadian Cannabis Store
Even with the predicted rise in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower still dominates sales, its supremacy is gradually declining as other product categories gain ground. Wholesale prices have remained relatively stable, although some provinces are witnessing unexpected price hikes.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, a 6.8% increase from September’s average of $1.03 per gram. Year-over-year prices show even more substantial shifts.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The price of cannabis varies from newly harvested to aged flower. Recently harvested flowers are selling more swiftly, with the average age of these harvests dropping to 65 days in April. The average price for aged flowers has largely stagnated, settling 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 flower 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 price of $1.07 per gram. The cannabis Commodity Exchange (CCX) has projected 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. Despite this, CCX anticipates a recovery for 15-20% THC 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 affecting price fluctuations for cannabis flower. Market dynamics and regulatory environments are intertwined with these influences.
Supply and Demand
Cultivation yields significantly affect the quantity of cannabis available in the market, influenced by weather conditions, pests, and diseases. Seasonal variations also play a role, with certain times of the year yielding higher or lower production levels. For example, outdoor cannabis cultivation peaks during late summer and early fall harvests, 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. A rise in demand for cannabis products can elevate prices, particularly if supply falls short. Conversely, a decrease in demand, possibly due to economic downturns or shifts towards alternative products, can lead to lower prices.
Product Diversification
The cannabis market has seen considerable diversification, with consumers expressing interest in a variety of products beyond traditional recreational cannabis flower. These offerings include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The growing demand for these diverse products can impact 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 wide range of products from home. This convenience can boost consumption and affect wholesale demand and prices.
Delivery services have also gained traction, enabling customers to receive cannabis products directly at their doorsteps. The convenience of delivery services can elevate demand, especially in regions where physical dispensaries are less accessible, thus 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 actively searching for budget-friendly options. This includes purchasing flower with lower THC levels, exploring online dispensaries outside their region for cheaper alternatives, or opting for alternative products.
Online cannabis shops offer a variety of THC flower at various price points per gram. Due to a broader customer base, online dispensaries can provide lower prices than physical stores. They also run weekly sales to present customers with alternatives if they cannot afford the price increases of other cannabis flowers.
Here is a list of cannabis buds on sale at Leaf2Go Canada. Get $99 per ounce or 28.35 grams.
Conclusion
Experts forecast that the cannabis market will continue to grow, with annual sales on the rise. Despite increased demand, high-quality cannabis flower, such as hybrid strains, is becoming pricier. Numerous factors contribute to these price increases, prompting customers to seek the best prices or explore alternative products like vape carts. Online dispensaries provide discounted prices on cannabis flower, allowing customers to meet 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 elevated cannabis prices can place a financial strain on consumers, there are significant advantages:
- Improved Product Quality: Higher prices permit 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: Rising prices can augment state revenues through higher taxes, which can be reinvested in public services. It also promotes 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 competitive pricing. Some provinces also have medical cannabis programs offering 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 obtaining safe and effective products.
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