Prices for cannabis are on the rise. The availability of cannabis flower is tightening even more throughout 2024, as many cultivation operations at CannaBudget Canada are either downsizing or halting production due to increasing losses. This limited supply is expected to further elevate prices. Rising costs are deterring some consumers from buying, which is subsequently boosting the demand for discounted cannabis options in various regions.
In October 2023, the average price of dried cannabis flower was $1.10 per gram, reflecting a 6.8% increase from September’s average of $1.03 per gram. The cost of freshly harvested flower with 20%+ THC surged from $1.04 per gram at the end of last year to $1.32 per gram by April, representing an overall increase of 27%. As cannabis flower prices increase, consumers are looking for more affordable choices, such as lower THC percentage flowers, online dispensaries for better pricing, or other 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 cannabis flower prices 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 Brightfield Group predicts that CannaBudget Canada’s cannabis market will double over the next five years. The report highlights that the expansion of retail stores and relaxed regulations will drive this growth. Brightfield Group anticipates that Canada’s cannabis market will grow at an annual rate of 10%, reaching $8.8 billion in five years, primarily fueled by increased sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, stated that despite strong market growth in 2021, there remains considerable potential for further expansion, particularly with enhanced retail access.
| Year | Forecast Total Sales |
|---|---|
| 2020 | $3.2B |
| 2021 | $4.4B |
| 2022 | $5.5B |
| 2023 | $6.4B |
| 2024 | $7.2B |
| 2025 | $7.9B |
| 2026 | $8.5B |
| 2027 | $8.8B |
Overview of the Flower Market in a Canadian Cannabis Store
Despite the anticipated surge in cannabis sales, there are ongoing challenges in the cannabis flower market. While cannabis flower continues to lead in sales, its dominance is gradually decreasing as other categories gain popularity. Wholesale prices have remained relatively stable, though some provinces are witnessing unexpected price hikes.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, which represents a 6.8% increase from the previous month’s average of $1.03 per gram. Year-over-year prices indicate even more significant fluctuations.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
Prices for flowers in Canada can differ between newly harvested and aged varieties. Recently harvested flowers have been selling more quickly, resulting in an average age for these harvests dropping to 65 days in April. The average price for aged flowers has largely stabilized at $0.69 per gram in April, marking a 1% decrease from the year-end price of $0.70 per gram.
- 30%+ THC: The average price for recently harvested flower increased 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) anticipates a recovery in May, with prices projected to increase 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 expects 15-20% THC to rebound 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 affecting fluctuations in cannabis flower prices. Market dynamics and regulatory frameworks are closely connected to these influences.
Supply and Demand
Cultivation yields significantly impact the amount of cannabis available in the market, influenced by weather conditions, pests, and diseases. Seasonal changes also contribute, with certain periods yielding higher or lower production levels. For example, outdoor cannabis cultivation peaks during late summer and early fall harvests, leading to a supply influx that can reduce prices.
Consumer preferences can also shift due to trends, disposable income changes, and evolving views on cannabis. An increase in demand for cannabis products can elevate prices, particularly if supply cannot keep pace. Conversely, decreased demand, potentially due to economic downturns or shifts toward alternative products, can lower prices.
Product Diversification
The cannabis market has experienced considerable diversification, with consumers showing 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 heightened demand for these diverse 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 access a wide range of cannabis products from the comfort of their homes. This convenience can lead to increased consumption and affect wholesale demand and prices.
Delivery services have also gained prominence, enabling customers to receive cannabis products directly at their doorsteps. The convenience of these services can boost demand, particularly in areas 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 on the lookout for more budget-friendly options. This includes opting for lower THC level flowers, searching for online dispensaries outside their region for cheaper alternatives, or considering other products.
Online cannabis shops provide a variety of THC flower at different price points per gram. Due to their broader customer base, online dispensaries can offer lower prices than physical stores. They also frequently run sales to provide customers with alternatives if they cannot afford the rising prices of other cannabis flowers.
Here is a list of cannabis buds available at CannaBudget Canada, with prices starting at $99 per ounce or 28.35 grams.
| Product | Flavours | Strain Type | THC (%) | CBD (%) | Price per Ounce |
|---|---|---|---|---|---|
| Jealousy | Diesel, Earthy | Hybrid strain (Balanced) | 24 | 0.2 | $99 |
| Biscotti | Cookies, Diesel | Hybrid (Indica Dominant) | 21 | 0.4 | $95 |
| Purple Truffle | Berry, Citrus, Sweet | Hybrid (Indica-dominant) | 20% | – | $99 |
Conclusion
Experts forecast that the cannabis market will continue to grow, with annual sales on the rise. Despite increasing demand, high-quality cannabis flower, particularly hybrid strains, is becoming more expensive. Various factors contribute to these price increases, prompting customers to seek the best deals or explore alternative products like vape cartridges. Online dispensaries offer discounted prices on cannabis flower, allowing customers to meet their needs without sacrificing quality or settling for unsatisfactory products.
Frequently Asked Questions
Are there any benefits to the price increase for consumers?
While higher cannabis prices may create a financial strain on consumers, there are notable advantages:
- Improved Product Quality: Increased prices allow producers to invest more in cultivation methods and quality assurance, leading to better, safer, and more reliable cannabis products.
- Enhanced Regulation: Rising prices can indicate stronger regulatory oversight, ensuring that products meet safety and quality standards, thereby protecting consumers from potentially harmful or substandard goods.
- Economic Benefits: The price rise can boost state revenues through higher taxes, which can be reinvested in public services. This also supports local cannabis businesses, job creation, and economic development within the community.
How can consumers find discounted cannabis in light of the price increase?
Consumers can locate lower cannabis prices through promotional sales, bulk buying, loyalty programs, or by shopping at dispensaries known for competitive pricing. Certain provinces also have medical cannabis programs offering lower prices for eligible 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 feedback to ensure they receive safe and effective products.
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