While an excess supply of wholesale cannabis flower has been driving prices down over the past few years, it is possible cannabis sellers are beginning to gain some leverage over buyers.
The average price of cannabis flower on the B2B wholesale market increased in October, a trend that has continued month-over-month for much of 2023. Unsurprisingly, smaller-batch, fresh cannabis with higher THC commands higher prices, with a four-month threshold for age making a significant price difference.
These prices are expected to continue to improve for sellers, predicts the Canadian Cannabis Exchange (CCX), who provided data from their monthly reports to StratCann.
CCX is a B2B exchange for cannabis and hemp products in Canada.
The average price for dried cannabis flower in October, the most recent data available, was $1.10/gram, an increase of 6.8% from the September average of $1.03/gram.
Pricing, of course, fluctuates significantly depending on the quality of the cannabis, with cannabis trim going as low as a few pennies a gram and recently harvested, higher-THC flower commanding closer to $1.45/gram. Interestingly, these figures were down from $1.91/gram in September.
Steve Clark, CEO of the Canadian Cannabis Exchange, says it seems the market seems to be recovering for wholesale flower prices.
“The Canadian market dynamics seemed to evolve as multiple sellers’ production capacities came offline in 2023. At CCX, we also observed consistent demand from domestic buyers, along with a growing pull from international markets. While it appears we’ve reached the bottom in wholesale pricing, potential expected or unexpected variables could introduce volatility, such as a new quality standards program like the temporary OCS THC testing or export/import tariffs.”
Another possible sign of the beginning of the end of the “glut” of bulk cannabis on the market is the decreasing lot sizes available. The average lot size was 27.9 kg in October, a 39% decline from the average lot size on the Exchange in August. (46.1 kg). The decline in lot size also means fewer bulk discounts, which CCX also contributes to their belief that prices will continue to increase, providing sellers more leverage over buyers than they have seen in years.
Year-over-year prices show even more upward movement on price for dried flower, with THC levels listed at 30% and higher increasing by 81%, while 20-29% THC stayed relatively level, and 15-20% decreased by 21%.
After several months of stability, the price of CBD isolate dropped to a new market low of $1,832/kg in October, a 13.8% decline from September’s price of $2,125/kg.
Demand for extracts like bubble hash, live resin, and shatter has also been strong in 2023, driven by the significant demand for infused pre-rolls, one of Canada’s fastest growing product categories. Hash is the most common of these products, selling at $4,500/kg in October.