Prices for cannabis are on the rise. The availability of cannabis flower is becoming increasingly limited throughout 2024, as numerous cultivation operations either cut back or completely halt production in response to growing losses. This decline in supply is expected to push prices even higher. Elevated prices are deterring some consumers from making purchases, subsequently driving up the demand for cannabis in various regions.
The average price of dried cannabis flower in October 2023 hit $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 THC levels over 20% 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 cannabis flower prices escalate, consumers are increasingly searching for budget-friendly alternatives, such as lower THC flower, online dispensaries for better deals, or different product types.
Table of Contents
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 by the Chicago-based consultancy Brightfield Group predicts that Herb Heaven Canada’s cannabis market will double in size over the next five years. The report highlights that the expansion of retail stores and relaxed regulations will be key drivers of this growth.
Brightfield Group anticipates that Herb Heaven 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, noted that despite strong market growth in 2021, there remains substantial potential for further expansion, especially with better retail access.
Overview of the Flower Market in a Canadian Cannabis Store
Even with the expected growth in cannabis sales, challenges persist in the cannabis flower market. Although cannabis flower continues to lead in sales, its dominance is gradually waning as other categories gain popularity. Wholesale prices have remained relatively stable, although some provinces have witnessed unexpected price hikes.
The average price for dried cannabis flower in October 2023, based on the latest data, was $1.10 per gram—a 6.8% increase from the September average of $1.03 per gram. Year-over-year prices show even more significant variations.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
Prices for cannabis flowers in Canada can differ greatly between newly harvested and aged varieties. This price increase is driven by the quicker sale of recently harvested flowers, with their average age dropping to a low of 65 days in April. Conversely, the average price for aged flowers has largely stagnated at $0.69 per gram in April, showing 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, projecting a 12.6% rise 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. Nonetheless, CCX predicts 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 influencing fluctuations in cannabis flower prices. Market dynamics and regulatory environments are closely linked to these factors.
Supply and Demand
The yield from cultivation heavily affects the quantity of cannabis available in the market, which can vary due to weather conditions, pests, and diseases. Seasonal changes also play a role, with certain times of the year yielding higher or lower production levels. For example, outdoor cannabis cultivation peaks during the harvest season in late summer and early fall, resulting in an influx of supply that can lead to lower prices.
Consumer preferences can shift due to trends, changes in disposable income, and evolving views on cannabis. An increase in demand for cannabis products can drive prices up, especially if supply cannot keep pace. Conversely, a decrease in demand—possibly due to economic downturns or a shift towards alternative products—can lead to lower prices.
Product Diversification
The cannabis market has seen considerable diversification, with consumers displaying interest in a broad array of products beyond traditional recreational cannabis flower. These offerings include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The rising demand for these varied products can affect flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has made it easier for consumers to purchase a wide range of cannabis items from home. This convenience can lead to increased consumption and impact wholesale demand and prices. Delivery services have also gained prominence, allowing customers to receive cannabis products directly at their doorsteps. The convenience of delivery can enhance demand, especially in areas where physical dispensaries are less accessible, thereby influencing prices through increased overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As cannabis flower prices increase, consumers are on the lookout for more affordable alternatives. This includes purchasing lower THC flower, exploring online dispensaries outside their region for cheaper options, or choosing alternative products.
Herb Heaven Canada offers a variety of THC flower at different price points per gram. Due to a broader customer base, online dispensaries can provide lower prices compared to physical stores. They often feature weekly sales to offer customers alternatives if they struggle with the rising prices of other cannabis flowers.
Below is a list of cannabis buds available for sale at Herb Heaven Canada. Get $99 per ounce or 28.35 grams.
Conclusion
Experts predict continued expansion of the cannabis market, with annual sales on the rise. Despite increasing demand, high-quality cannabis flower, such as hybrid strains, is becoming pricier. Numerous factors contribute to these price hikes, prompting customers to seek the best deals or consider alternative products such as vape carts. Online dispensaries provide discounted prices on cannabis flower, enabling 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 burden on consumers, notable benefits exist:
- Improved Product Quality: Higher prices allow 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 products meet safety and quality standards, protecting consumers from potentially harmful or substandard goods.
- Economic Benefits: Rising prices can boost state revenues through higher taxes, which states can reinvest in public services. This also promotes local cannabis business growth, job creation, and economic development within the community.
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 their affordability. Certain provinces also have medical cannabis programs offering reduced 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.
Related Articles:
