Prices for cannabis are on the rise. Throughout 2024, the supply of cannabis flower is expected to tighten as more cultivation operations at OG Extracts Canada either cut back or halt production due to increasing losses. This reduced supply is likely to push prices even higher. The increase in prices is discouraging some users from making purchases, which in turn is boosting the demand for cannabis in various regions.
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Key Takeaways:
- In October 2023, the average price of dried cannabis flower was $1.10 per gram, a 6.8% increase from the average of $1.03 per gram in September.
- 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 a 27% overall increase.
- As cannabis flower prices rise, consumers are looking for cheaper alternatives such as lower THC flower, online dispensaries for better deals, or other products.
Canadian Cannabis Market General Trends
A report by Brightfield Group, based in Chicago, forecasts that Canada’s cannabis market will double in size over the next five years. The report highlights that the growth will be fueled by the opening of more retail stores and relaxed regulations.
According to Brightfield Group, Canada’s cannabis market is projected to grow at an annual rate of 10%, reaching $8.8 billion in five years, primarily driven by increased sales of edibles and vape products.
Bethany Gomez, managing director of Brightfield Group, noted that despite significant growth in 2021, there remains ample room for further expansion, particularly with improved 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 growth in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower remains the leading product in sales, its dominance is gradually declining as other categories gain popularity. Wholesale prices have remained stable, though some provinces have seen 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 are showing even more significant shifts.
Provinces Experiencing Price Increases per THC Level on Newly Harvested Flower
Prices for cannabis flowers in Canada can vary between newly harvested and aged flowers. Recently harvested flowers are selling more quickly, with their average age dropping to 65 days in April. The average price for aged flowers has largely stagnated at $0.69 per gram, representing a 1% drop 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 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 price of $0.69 per gram in April, a 23.3% decline from the March settlement price of $0.90 per gram. However, CCX anticipates a recovery 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 contributing to fluctuations in cannabis flower prices. Market dynamics and regulatory environments play a crucial role in these changes.
Supply and Demand
The yields from cultivation significantly influence the quantity of cannabis available in the market, which can vary due to factors like weather, pests, and diseases. Seasonal variations also impact production levels; for instance, outdoor cannabis cultivation peaks during late summer and early fall, leading to an influx of supply that can suppress prices.
Consumer preferences can shift due to trends, changes in disposable income, and evolving perceptions of cannabis. An increase in demand can drive prices up if supply cannot keep pace, while a decrease in demand due to economic downturns or shifts toward alternatives can lead to lower prices.
Product Diversification
The cannabis market has diversified significantly, with consumers showing interest in a variety of products beyond traditional recreational cannabis flower. These include edibles, vape pens, pre-rolls, tinctures, and concentrates like live resin. The growing demand for these products can impact flower prices.
Technological Integration
The rise of online shopping platforms for cannabis has made it easier for consumers to purchase a wide range of products from home. This convenience can boost consumption and influence wholesale demand and prices.
Delivery services have also gained popularity, allowing customers to receive cannabis products directly at their doors. This convenience can increase demand, especially in regions where physical dispensaries are less accessible, thereby impacting prices through higher overall market demand.
Price Hike Demands for Discounted Cannabis; Customers Order Online
As cannabis flower prices rise, consumers are searching for more affordable options. This includes purchasing flowers with lower THC levels, exploring online dispensaries for cheaper alternatives, or opting for other products.
Online cannabis shops provide a selection of THC flowers at various price points. Due to a broader customer base, online dispensaries can offer lower prices compared to physical stores and often run weekly sales to help customers cope with rising prices.
Here’s a list of cannabis buds available at OG Extracts Canada for $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 foresee continued expansion in the cannabis market, with yearly sales on the rise. Despite growing demand, high-quality cannabis flower, such as hybrid strains, is becoming pricier. Various factors contribute to these price hikes, prompting customers to seek the best deals or explore alternative products like vape cartridges. Online dispensaries, like OG Extracts Canada, offer discounted prices on cannabis flowers, allowing customers to satisfy 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 prices can strain consumers financially, several benefits exist:
- Improved Product Quality: Elevated prices allow producers to invest more in cultivation practices and quality control, resulting in better, safer, and more consistent cannabis products.
- Enhanced Regulation: Rising prices can indicate stronger regulatory oversight, ensuring products meet safety and quality standards, thus protecting consumers from potentially harmful goods.
- Economic Benefits: Increased prices can enhance state revenues through higher taxes, which can be reinvested in public services. This also promotes growth in local cannabis businesses, job creation, and community development.
How can consumers find discounted cannabis amid price increases?
Consumers can discover lower cannabis prices through promotional sales, bulk buying, loyalty programs, or by shopping at dispensaries known for competitive pricing. Some provinces also have medical cannabis programs that provide lower prices for qualifying patients.
What should consumers look for when purchasing discounted cannabis?
When seeking lower cannabis prices, consumers must 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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