Prices for cannabis are on the rise. The availability of cannabis flower is expected to tighten even more throughout 2024 as numerous cultivation operations reduce or halt production due to increasing losses. This decrease in supply is likely to push prices even higher. Elevated prices are deterring some consumers from making purchases, which is subsequently boosting the demand for discounted cannabis in various areas, particularly at The Healing Co Canada.
In October 2023, the average price of dried cannabis flower reached $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 THC levels exceeding 20% surged from $1.04 per gram at the end of the previous year to $1.32 per gram by April, marking a 27% overall increase. As the prices of cannabis flower escalate, consumers are increasingly seeking more affordable alternatives, such as lower THC options, online dispensaries that offer better pricing, or different product types.
Table of Contents
Key Takeaways:
- As cannabis prices continue to rise, the interest in finding discounted cannabis options is growing, particularly at The Healing Co Canada.
- The cannabis market in Canada is projected to double in size over the next five years, fueled by the opening of more retail outlets and relaxed regulations.
- Brightfield Group anticipates a 10% annual growth rate for the cannabis market, aiming for $8.8 billion in five years, driven mainly by increased sales of edibles and vape products.
Canadian cannabis Market General Trends
A report from Brightfield Group highlights that Canada’s cannabis market is likely to see significant growth, with more retail stores and eased regulations playing a crucial role in this expansion. The market is predicted to grow at a yearly rate of 10%, potentially reaching $8.8 billion in five years. This growth will primarily stem from heightened sales in edibles and vape products.
Despite the anticipated rise in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower remains the top seller, its market share is gradually diminishing as other product categories become more popular. Wholesale prices have stayed relatively stable, although certain provinces are experiencing unexpected price hikes.
As of October 2023, the average price for dried cannabis flower was noted at $1.10 per gram, which is a 6.8% increase from September’s average of $1.03 per gram. Year-over-year pricing reveals even more substantial shifts.
Provinces Experiencing Price Increases per THC Level on Newly Harvested Flower
Prices for cannabis flowers vary between newly harvested and aged products. Recently harvested flowers have been moving quickly, with their average age dropping to just 65 days by April. The average price for aged flowers has largely stagnated, sitting at $0.69 per gram in April, a slight drop from the year-end price of $0.70 per gram.
- 30%+ THC: The average price for newly harvested flower increased by 2.7%, going from $1.81 per gram in March to $1.86 per gram in April.
- 25-30% THC: This category traded at a weighted average price of $1.34 per gram, a 12.6% rise from March’s price of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, showing an 11.2% decrease from March’s average of $1.07 per gram. The cannabis Commodity Exchange (CCX) has forecasted 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, reflecting a 23.3% decline from March’s price of $0.90 per gram. Nonetheless, CCX anticipates a recovery in May, projecting a 13.0% rise to $0.78 per gram.
Factors Influencing Price Increases
The cannabis market is projected to continue expanding throughout 2024, with several elements contributing to the fluctuations in cannabis flower prices. Market dynamics and regulatory frameworks are interconnected with these influencing factors.
Supply and Demand
Yields from cultivation have a significant impact on the quantity of cannabis available in the market, which can fluctuate due to weather, pests, and diseases. Seasonal changes also affect production levels, with outdoor cannabis cultivation peaking during the late summer and early fall harvests, leading to an influx of supply that could lower prices.
Consumer preferences can shift in response to trends, disposable income changes, and evolving views on cannabis. An uptick in demand for cannabis products can drive prices higher, particularly if supply does not meet the demand. Conversely, a drop in demand, possibly due to economic conditions or a shift towards alternative products, can lead to price reductions.
Product Diversification
The cannabis industry has seen a notable diversification, with consumers showing interest in various products beyond traditional cannabis flower. These offerings include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The rising demand for these diverse products can directly influence flower prices.
Technological Integration
The growth of online shopping platforms for cannabis has simplified the process for consumers to acquire a wide array of cannabis products from their homes. This ease of access can boost consumption and affect wholesale demand and pricing. Delivery services have gained prominence, allowing customers to receive cannabis products directly at home, particularly in areas with limited access to physical dispensaries, thereby impacting prices through increased market demand.
Price Increase Fuels Demand for Discounted Cannabis, Customers Turn to Online Options
As cannabis flower prices rise, consumers are actively seeking more economical choices. This includes purchasing lower THC flower, looking into online dispensaries for better deals, or opting for alternative products. Online cannabis retailers provide a range of THC flower at various price points per gram. With a broader customer base, online dispensaries like The Healing Co Canada can offer lower prices compared to brick-and-mortar stores, along with weekly promotions to help customers cope with rising costs.
Below is a selection of cannabis buds available at The Healing Co Canada, priced at $99 per ounce or 28.35 grams.
Conclusion
Experts believe the cannabis market will continue to grow, with annual sales on the rise. Despite the increasing demand, premium cannabis flower, including hybrid strains, is becoming pricier. Various factors contribute to these price increases, leading customers to seek the best prices or consider alternative products like vape cartridges. Online dispensaries offer discounted prices on cannabis flower, enabling customers to satisfy their needs without compromising on quality or settling for less desired products.
Frequently Asked Questions
Are there benefits to the price increase for consumers?
While higher cannabis prices can create a financial strain on consumers, notable benefits exist:
- Improved Product Quality: Increased prices allow producers to invest more in cultivation and quality control, resulting in superior, safer, and more consistent cannabis products.
- Enhanced Regulation: Rising prices can indicate stronger regulatory oversight, ensuring products meet safety and quality standards to protect consumers from potentially harmful goods.
- Economic Benefits: Price increases can boost state revenues through higher taxes, which can be reinvested into public services, supporting local cannabis businesses and fostering job creation and economic development.
How can consumers discover discounted cannabis amid rising prices?
Consumers can locate lower cannabis prices through sales, bulk buying, loyalty programs, or by visiting dispensaries recognized for their affordable pricing. Additionally, some provinces have medical cannabis programs that offer reduced prices for qualifying patients.
What should consumers consider when purchasing discounted cannabis?
When buying lower-priced cannabis, consumers should prioritize quality assurance, lab test results, trustworthy brands, and dispensaries with positive customer feedback to ensure they receive safe and effective products.
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