Prices for cannabis are on the rise. The availability of cannabis flower is expected to tighten further throughout 2024 as cultivation operations reduce or stop production due to increasing losses. This limited supply is likely to push prices even higher. Rising prices are deterring some consumers from making purchases, which is consequently leading to a heightened demand for discounted cannabis in various regions, especially through Just Cannabis Canada.
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Key Takeaways:
- In October 2023, the average price of dried cannabis flower reached $1.10 per gram, an increase of 6.8% from September’s average of $1.03 per gram.
- The price of recently harvested flower with over 20% THC climbed from $1.04 per gram at the end of last year to $1.32 per gram by April, marking an overall increase of 27%.
- As prices for cannabis flower rise, consumers are exploring cheaper alternatives, including lower THC flower, online dispensaries for better deals, and other product options available at Just Cannabis Canada.
Canadian Cannabis Market General Trends
A report from the Chicago-based consultancy, Brightfield Group, forecasts that the cannabis market in Canada will double in the next five years. The report highlights that increasing retail locations and relaxed regulations will drive this growth.
Brightfield Group anticipates that Canada’s cannabis market will expand at a yearly rate of 10%, reaching $8.8 billion in five years, primarily fueled by higher sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, stated that despite robust market growth in 2021, there remains considerable potential for further expansion, particularly with enhanced retail access.
Overview of the Flower Market in A Canadian Cannabis Store
Despite the expected rise in cannabis sales, challenges persist in the cannabis flower market. Although cannabis flower continues to dominate sales, its stronghold is gradually diminishing as other categories gain popularity. Wholesale prices have remained relatively stable, with some provinces experiencing unexpected price hikes.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, reflecting a 6.8% increase from the September average of $1.03 per gram. Year-over-year prices show even more significant fluctuations.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The prices for cannabis flowers in Canada can fluctuate between newly harvested and aged varieties. Recently harvested flowers are being sold more quickly, with the average age of these harvests dropping to a low of 65 days in April. The average price for aged flowers has largely stagnated, settling at $0.69 per gram in April, which is a 1% decrease from the previous 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) 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, a 23.3% decline from the March settlement price of $0.90 per gram. 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, several factors are leading to fluctuations in cannabis flower prices. Market dynamics and regulatory environments are intertwined with these influences.
Supply and Demand
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 affect production levels. For example, outdoor cannabis cultivation peaks during harvest time in late summer and early fall, leading to an influx of supply that can reduce prices.
Consumer preferences may shift due to trends, shifts in disposable income, and changing perceptions of cannabis. An increase in demand for cannabis products can raise prices, especially if supply struggles to keep up. Conversely, a drop in demand, possibly due to economic downturns or shifts towards alternative products, can lower prices.
Product Diversification
The cannabis market has seen significant diversification, with consumers showing interest in a wide array of products beyond traditional recreational cannabis flower. These products include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The rising 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 buy a vast variety of products from the comfort of their homes. This convenience can boost consumption and affect wholesale demand and prices.
Delivery services have also gained popularity, enabling customers to receive cannabis products directly at home. This convenience can enhance demand, especially in regions with limited access to physical dispensaries, thereby impacting prices through increased overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As the cost of cannabis flower escalates, consumers are seeking more budget-friendly options. This includes purchasing flowers with lower THC levels, exploring online dispensaries beyond their locality for cheaper alternatives, or choosing alternative products available at Just Cannabis Canada.
Online cannabis shops provide a range of THC flower at varying price points per gram. With a broader customer base, online dispensaries can offer lower prices than physical stores. They also feature weekly promotions to provide customers with alternatives when facing price hikes on other cannabis flowers.
Listed below are cannabis buds currently on sale at Just Cannabis Canada. Enjoy $99 per ounce or 28.35 grams.
Conclusion
Experts predict the cannabis market will continue to grow, with annual sales on the rise. Despite increasing demand, high-quality cannabis flower, such as hybrid strains, is becoming pricier. Multiple factors contribute to these price increases, prompting customers to seek the best prices or explore alternative products like vape cartridges. Online dispensaries offer discounted prices on cannabis flower, allowing customers to fulfill their needs without compromising 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 create a financial strain on consumers, there are notable advantages:
- Improved Product Quality: Increased prices allow producers to invest more in cultivation and quality control, resulting in better, safer, and more consistent cannabis products.
- Enhanced Regulation: Rising prices may signal stronger regulatory oversight, ensuring products meet safety and quality standards, thereby protecting consumers from potentially harmful goods.
- Economic Benefits: The rise in prices can boost state revenues through higher taxes, which can be reinvested in public services. It also contributes to the growth of local cannabis businesses, job creation, and community economic development.
How can consumers find discounted cannabis in light of the price increase?
Consumers can discover lower cannabis prices through sales promotions, bulk purchases, loyalty programs, or by shopping at dispensaries recognized for offering lower prices. Some provinces also have medical cannabis programs that provide lower prices for qualifying patients.
What should consumers look for when purchasing discounted cannabis?
When buying cannabis at reduced 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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