Prices for cannabis are on the rise as the market tightens in 2024. The reduction in cultivation operations due to financial struggles is further constraining the supply of cannabis flower. This decreased availability is expected to push prices even higher. As prices climb, some consumers are turning away from purchases, which is increasing the demand for discounted cannabis options at Kootenay Botanicals Canada across various regions.
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Key Takeaways:
- In October 2023, the average price for dried cannabis flower was $1.10 per gram, reflecting a 6.8% increase from the September average of $1.03 per gram.
- The price of freshly harvested flower with over 20% THC grew from $1.04 per gram at the end of the previous year to $1.32 per gram by April, marking a 27% increase overall.
- As cannabis flower prices continue to rise, consumers are seeking more affordable alternatives, including lower THC flower options and online dispensaries for better pricing.
General Trends in the Canadian Cannabis Market
A report from Brightfield Group predicts that Kootenay Botanicals Canada’s cannabis market will double in the next five years, driven by the opening of more retail outlets and relaxed regulations.
Brightfield anticipates a 10% annual growth rate for Canada’s cannabis market, reaching $8.8 billion in five years, primarily fueled by rising sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that despite significant market growth in 2021, there remains considerable potential for further expansion, particularly with improved retail access.
Overview of the Flower Market in Canadian Cannabis Stores
While cannabis sales are expected to rise, challenges persist within the cannabis flower market. Although cannabis flower still dominates sales, its share is gradually decreasing as other categories gain market presence. Wholesale prices have mostly stabilized, though some provinces are witnessing unexpected price hikes.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, up 6.8% from the September average of $1.03 per gram. Year-over-year comparisons reveal even more significant shifts.
Price Variations by THC Level in Newly Harvested Flower
The pricing for cannabis varies significantly between newly harvested and aged flower. Recently harvested products are selling more rapidly, with average ages dropping to 65 days in April. The average price for aged flowers has remained stable at $0.69 per gram in April, a slight decrease from the previous year’s end price of $0.70 per gram.
- 30%+ THC: The average price for recently harvested flower increased by 2.7%, rising 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% increase from March’s average of $1.19 per gram.
- 20-25% THC: Settled at $0.95 per gram, an 11.2% drop from March’s average of $1.07 per gram. The cannabis Commodity Exchange (CCX) predicts a recovery in May, with prices expected to rise by 12.6% to $1.07 per gram.
- 15-20% THC: Traded at an average of $0.69 per gram in April, down 23.3% from March’s price of $0.90 per gram. Nonetheless, CCX anticipates a recovery in this category in May, predicting a 13.0% increase to $0.78 per gram.
Factors Influencing Price Increases
As the cannabis market expands in 2024, various factors are driving fluctuations in cannabis flower prices. Market dynamics and regulatory frameworks are closely interlinked with these factors.
Supply and Demand
Cultivation yields significantly impact the quantity of cannabis available, influenced by weather, pests, and diseases. Seasonal variations contribute as well, with certain times yielding higher or lower production levels. For example, outdoor cannabis cultivation experiences peak supply during late summer and early fall, which can lead to lower prices.
Shifts in consumer preferences, driven by trends, disposable income changes, and evolving attitudes toward cannabis, can also affect demand. Increased demand for cannabis products can elevate prices, particularly if supply does not keep pace. Conversely, decreased demand, potentially caused by economic downturns or shifts to alternatives, can lower prices.
Product Diversification
The cannabis market has diversified significantly, with consumers increasingly interested in various products beyond traditional recreational cannabis flower. This includes edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The growing demand for these products can influence flower prices.
Technological Integration
The rise of online platforms for cannabis purchases has facilitated easier access to a wide range of cannabis products from home. This convenience can lead to increased consumption, impacting wholesale demand and prices.
Delivery services have also gained traction, allowing customers to receive cannabis products at their homes. This convenience can enhance demand, especially in areas with limited access to physical dispensaries, thus influencing prices by boosting overall market demand.
Price Increases Prompt Demand for Discounted Cannabis, Customers Order Online
With rising cannabis flower costs, consumers are looking for more budget-friendly options. This includes purchasing lower THC flower, exploring online dispensaries outside their usual areas for cheaper alternatives, or choosing alternative products.
Online cannabis retailers like Kootenay Botanicals Canada provide a diverse range of THC flower at varying price points per gram. By reaching a broader audience, these online dispensaries can offer lower prices than physical locations. They also run weekly promotions, giving customers an alternative to cope with rising prices of other cannabis products.
Below is a list of cannabis buds available at discounted prices at Kootenay Botanicals Canada. Get $99 per ounce or 28.35 grams.
Conclusion
Experts predict continued expansion in the cannabis market, with annual sales on the rise. Despite growing demand, high-quality cannabis flower, including hybrid strains, is becoming pricier. Various factors contribute to these price increases, prompting customers to seek the best deals or explore alternatives like vape cartridges. 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 may impose financial strain, there are benefits to consider:
- Improved Product Quality: Higher prices allow producers to invest in better cultivation practices and quality control, resulting in safer and more consistent cannabis products.
- Enhanced Regulation: Increased prices may indicate stronger regulatory oversight, ensuring products meet safety and quality standards, thereby protecting consumers from subpar goods.
- Economic Benefits: Rising prices can enhance state revenues through higher taxes, which can be reinvested in public services. This also supports local cannabis businesses, job creation, and community economic development.
How can consumers find discounted cannabis despite price increases?
Consumers can discover lower cannabis prices through promotional sales, bulk buying, loyalty programs, or by visiting dispensaries known for lower pricing. Some provinces offer medical cannabis programs that provide discounted rates 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 feedback to ensure they receive safe and effective products.
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