Cannabis prices are on the rise as the availability of cannabis flower becomes increasingly constrained throughout 2024. Many cultivation operations are either scaling back or halting production due to growing financial losses, further tightening supply and likely causing prices to climb. As prices increase, some users are deterred from buying, which boosts the demand for cannabis in various locations.
In October 2023, the average price for 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 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 the costs for cannabis flower rise, consumers are seeking less expensive alternatives, such as lower THC flower percentages, online dispensaries for better deals, or other products.
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Key Takeaways:
- The Canadian cannabis market is anticipated to double in size over the next five years, driven primarily by expanded retail access and relaxed regulations.
- Brightfield Group forecasts a 10% annual growth rate for Canada’s cannabis market, reaching $8.8 billion within five years, propelled mainly by increased sales of edibles and vape products.
- Bethany Gomez from Brightfield Group notes that while strong market growth occurred in 2021, significant potential for expansion still exists with enhanced retail access.
General Trends in the Canadian Cannabis Market
A report from Brightfield Group indicates that Canada’s cannabis market is expected to grow significantly over the next five years, primarily due to the opening of more retail stores and easing of regulations. The annual growth rate is projected at 10%, potentially leading to $8.8 billion in sales within five years, largely attributed to rising demand for cannabis and vape products.
Despite the anticipated increase in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower maintains its status as the leading product in market sales, its dominance is gradually diminishing as other categories gain popularity. Wholesale prices have remained relatively steady, although some provinces are observing unexpected price hikes.
Price Changes by THC Level
The pricing of cannabis flower in Canada varies between newly harvested and aged products. Recently harvested flowers are selling at a faster rate, with their average age decreasing to 65 days in April. The average price for aged flowers has remained stagnant at $0.69 per gram, representing a slight decrease from the previous year’s end price.
- 30%+ THC: Recently harvested flower prices rose by 2.7%, from $1.81 per gram in March to $1.86 per gram in April.
- 25-30% THC: These flowers traded at a weighted average of $1.34 per gram, which is a 12.6% increase from March’s price of $1.19.
- 20-25% THC: The price settled at $0.95 per gram, an 11.2% drop from March’s $1.07. The cannabis Commodity Exchange (CCX) forecasts a recovery with prices expected to rise by 12.6% to $1.07 per gram.
- 15-20% THC: The average price was $0.69 per gram in April, a 23.3% decline from March’s price of $0.90. CCX anticipates a 13.0% increase to $0.78 per gram in May.
Factors Influencing Price Increases
As the cannabis market continues to evolve in 2024, various factors are influencing fluctuations in cannabis flower prices. Market dynamics and regulatory environments significantly impact these price changes.
Supply and Demand
The yields from cultivation heavily influence the available quantity of cannabis in the market, which can fluctuate based on weather, pests, and diseases. Seasonal variations also affect production levels, with outdoor cultivation peaking during late summer and early fall, leading to a supply influx that can lower prices.
Consumer preferences are influenced by trends, disposable income changes, and evolving perceptions of cannabis. An uptick in demand for cannabis products can drive prices up, particularly if supply cannot keep pace. Conversely, a decrease in demand due to economic downturns or shifts toward alternative products can lead to lower prices.
Product Diversification
The cannabis market has diversified significantly, with consumers increasingly interested in a range of products beyond traditional recreational cannabis flower. This includes 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 made it easier for consumers to explore a vast array of options from home. This convenience can boost consumption and affect wholesale demand and prices.
Delivery services have gained popularity, providing customers with cannabis products directly at their doorsteps. This convenience can heighten demand, particularly in areas where physical dispensaries are less accessible, thereby influencing prices through increased market demand.
Demand for Discounted Cannabis
As cannabis flower prices rise, consumers are actively seeking more affordable options. This involves purchasing lower THC flowers, exploring online dispensaries outside their region for cheaper alternatives, or considering other products.
Online cannabis shops offer various THC flower at different price points per gram. With a broader customer base, online dispensaries can provide lower prices than physical stores and often feature weekly sales, giving customers alternatives amid rising prices.
Here’s a selection of cannabis products available at West Coast Cannabis Canada for $99 per ounce or 28.35 grams:
- Jealousy: 24% THC, $99 per ounce
- Biscotti: 21% THC, $95 per ounce
- Purple Truffle: 20% THC, $99 per ounce
Conclusion
Experts foresee ongoing expansion in the cannabis market, with annual sales on the rise. Although demand for high-quality cannabis flower, like hybrid strains, is increasing, prices are also climbing. Various factors contribute to these price hikes, prompting consumers to seek the best deals or explore alternative products, such as vape cartridges. Online dispensaries provide discounted prices on cannabis flower, allowing 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 higher cannabis prices can impose a financial strain on consumers, there are several notable advantages:
- Improved Product Quality: Increased prices allow producers to invest more in cultivation and quality control, leading to better, safer, and more consistent cannabis products.
- Enhanced Regulation: Rising prices may signal stronger regulatory oversight, ensuring products meet safety and quality standards, protecting consumers from potentially harmful goods.
- Economic Benefits: Higher prices can boost state revenues through increased taxes, which can be reinvested in public services, fostering local cannabis businesses, job creation, and economic development.
How can consumers find discounted cannabis amid rising prices?
Consumers can locate lower cannabis prices through sales promotions, bulk buying, loyalty programs, or by visiting dispensaries known for affordability. Some provinces also have medical cannabis programs that provide lower prices for eligible patients.
What should consumers prioritize when purchasing discounted cannabis?
When buying lower-priced cannabis, consumers should focus on quality assurance, lab testing results, reputable brands, and dispensaries with favorable customer reviews to ensure they receive safe and effective products.
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