Herbarium Canada reports that cannabis prices are on the rise. The availability of cannabis flower is tightening further throughout 2024 as numerous cultivation operations reduce or halt production due to escalating losses. This decline in supply is expected to drive prices even higher. The increase in prices is dissuading some users from making purchases, which is consequently boosting the demand for cannabis in various regions.
Table of Contents
Key Takeaways:
- In October 2023, the average price of dried cannabis flower was $1.10 per gram, a 6.8% increase from September’s average of $1.03 per gram.
- The price of recently harvested flower with 20%+ THC increased from $1.04 per gram at the end of last year to $1.32 per gram by April, marking a 27% increase overall.
- As cannabis flower prices escalate, consumers are seeking more affordable options, such as lower THC flower percentages, online dispensaries for better pricing, or alternative products.
Canadian Cannabis Market General Trends
A report by Brightfield Group, a Chicago-based industry consultancy, anticipates that Canada’s cannabis market will double in the next five years. This report highlights that the expansion of retail stores and the easing of regulations will drive this growth.
Brightfield Group predicts that Canada’s cannabis market will grow at a yearly rate of 10%, reaching $8.8 billion within five years. This growth will primarily be fueled by increased cannabis and vape product sales.
Bethany Gomez, managing director of Brightfield Group, stated that despite strong market growth in 2021, there remains considerable potential 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 increase in cannabis sales, challenges persist in the cannabis flower market. While cannabis flower remains the leading sales category, its dominance is gradually declining as other categories gain popularity. Wholesale prices have remained relatively stable, though some provinces have seen unexpected price increases.
The average price for dried cannabis flower in October 2023 was $1.10 per gram, reflecting a 6.8% rise from the September average of $1.03 per gram. Year-over-year prices reveal even more significant shifts.
Provinces Experiencing a Price Hike per THC Level on Newly Harvested Flower
The pricing of flowers in Canada can fluctuate between newly harvested and aged varieties. Recently harvested flowers are selling more rapidly, and their average age fell to a low of 65 days in April. Conversely, the average price for aged flowers has stabilized at $0.69 per gram in April, representing a 1% decline from the year-end price of $0.70 per gram.
- 30%+ THC: The average price for recently harvested flower rose 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 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) forecasts 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 price of $0.90 per gram. However, CCX anticipates a recovery for this category in May, with a projected increase of 13.0% to $0.78 per gram.
| THC Level | British Columbia | Alberta | Ontario | Quebec | Rest of Canada |
| 30%+ | $1.48 | $1.56 | $1.63 | $1.95 | $2.23 |
| 25%-30% | $1.27 | $1.30 | $1.08 | $1.19 | $0.88 |
| 20%-25% | $1.09 | $0.99 | $0.98 | $0.70 | $0.67 |
| 20%-15% | – | $1.00 | $0.78 | $0.46 | $0.67 |
Factors Influencing Price Hike
As the cannabis market continues to grow in 2024, various factors are influencing the fluctuations in cannabis flower prices. Market dynamics and regulatory environments intertwine with these factors.
Supply and Demand
Yields from cultivation significantly impact the quantity of cannabis available in the market, which can vary due to weather conditions, pests, and diseases. Seasonal variations also contribute, with certain periods yielding higher or lower production levels. For example, outdoor cannabis cultivation peaks during the harvest season in late summer and early fall, leading to a supply influx that can lower prices.
Consumer preferences may shift based on trends, disposable income changes, and evolving perceptions of cannabis. An increase in demand for cannabis products can drive prices up, particularly if supply cannot keep pace. Conversely, a dip in demand, possibly due to economic downturns or shifts toward alternative products, can lead to lower prices.
Product Diversification
The cannabis market has seen considerable diversification, with consumers showing interest in various 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 diverse products can influence flower prices.
Technological Integration
The emergence of online shopping platforms for cannabis products has facilitated easier consumer access to a vast array of cannabis products from home. This convenience can boost consumption and affect wholesale demand and prices.
Delivery services have also gained popularity, allowing customers to receive cannabis products directly at their homes. The ease of delivery services can enhance demand, especially in areas with limited access to physical dispensaries, thus impacting prices through increased overall market demand.
Price Hike Demands for Discounted Cannabis, Customers Order Online
As cannabis flower prices rise, consumers are actively seeking more affordable options. This includes purchasing lower THC flower, exploring online dispensaries outside their regions for cheaper alternatives, or turning to alternative products.
Online cannabis shops provide various THC flower at different price points per gram. Given their broader customer base, online dispensaries can offer lower prices compared to physical stores. They also run weekly promotions to provide customers with alternatives in light of rising prices.
Below is a selection of cannabis buds available for sale at Herbarium Canada, priced at $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 forecast continued expansion of the cannabis market, with annual sales on the rise. Despite this growing demand, high-quality cannabis flower, such as hybrid strains, is becoming increasingly expensive. Several factors contribute to these price hikes, prompting customers to seek the best deals or explore alternative products like vape cartridges. Online dispensaries offer competitive prices on cannabis flower, enabling customers to fulfill their needs without compromising on 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 a financial strain on consumers, there are significant benefits:
- 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, thus protecting consumers from potentially harmful or subpar goods.
- Economic Benefits: Rising prices can boost state revenues through higher taxes, which can be reinvested into public services. It also promotes the growth of local cannabis businesses, job creation, and overall 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 buying, loyalty programs, or by visiting dispensaries known for their lower prices. Some provinces also have medical cannabis programs that offer reduced prices for qualifying patients.
What should consumers look for when purchasing discounted cannabis?
When buying cannabis at lower 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.
Related Articles:
