Correctly Priced Cannabis in 2022
By Kaitlin Domangue
Correctly Priced Cannabis
Breaking down the prices people are willing to pay for cannabis products…
The price of cannabis significantly impacts the locations where consumers purchase their cannabis from.
Some consumers think the prices of legal cannabis products are too expensive, and they choose to purchase cannabis products from the illicit market in regions where cannabis is legal, while others choose to grow their own.
Lower prices is the #1 influencing factor for Canadian cannabis consumers.
In the U.S, lower prices were consistently identified as one of the top three drivers in determining the cannabis products consumers selected with 27% of respondents saying product prices influence their purchasing decisions.
34% of Canadian consumers said price matters most to them when choosing a product at a cannabis retail store. This is interesting because cannabis is 30% cheaper in Canada, on average, than in the U.S.
American consumers also care about the product’s flavor and the THC content along with price, and are more likely to pay higher prices for products with strong flavor and higher concentrations of THC.
Take a look at the breakdown below comparing the prices of different cannabis product category prices in the U.S. and Canada.
1,000 MG Vape Carts: California
Average price: $43.68 USD
Lowest price: $13.47 USD
Highest price: $124.56 USD
Average price: $43.03 USD (1.5% lower)
Lowest price: $30.76 USD (228% higher)
Highest price: $52.05 USD (58.3% lower)
Cannabis Beverages: California
Average price: $15.34 USD
Lowest price: $2.25 USD
Highest price: $53.11 USD
Average price: $4.91 USD (67.9% lower)
Lowest price: $2.69 USD (19.5% higher)
Highest price: $7.00 USD (86.6% lower)
There’s no nationwide metric to follow such that pricing cannabis is not the same as pricing other consumer packaged goods.
A brand’s competitors in a specific region, the markups retailers in a region are applying to their products, local and state regulations, costs, and tax structures all influence the cannabis product’s final price for consumers.
Even in Canada, where cannabis is federally legal, you’ll see a drastic difference in prices throughout the country.
A 10 x 10 milligram Wana Sour Gummy is, on average $27.59 USD in Illinois vs being $8.03 USD in Oregon
A 2.5 x 5 milligram Ace Valley blueberry lavender gummy is, on average, $7.19 CAD in Saskatchewan, vs being $8.18 CAD in Ontario.
A 1,000 milligram Blue Dream distillate cartridge by STIIIZY is, on average, $61.43 USD in Arizona vs being $43.81 USD in California.
A 1 milliliter Pineapple Express cartridge by Good Supply is, on average $56.12 CAD in Alberta vs being $64.90 CAD in Saskatchewan.
Factors To Consider
A brand’s reputation is not a top-10 influencer for U.S. consumers.
Just 18% of cannabis consumers surveyed said a brand’s reputation matters when they are making a final purchasing decision.
The average price for flower was $1,600/pound in Oregon in 2021. It was $900 for the same quantity in Colorado. Like other products, supply and demand plays a role when it comes to the price of cannabis.
In Canada, that supply was low after legalization. This made prices high (pun not intended, but we’re rolling with it), starting at $11.78 CAD per gram in the first half of 2019 and eventually dropping to $7.50 per gram one year later.
Similarly, vape cart prices (per gram) decreased by 41% in Canada after legalization, going from $32.02 a gram to $19.00 per gram.
In a cannabis retail store, budtenders appear to be the first point of trust for cannabis customers, not brands.
Based on other data we’ve reviewed, customers seem to make the “trust” decision based on the products a cannabis retailer is choosing to stock in their store. We call this the art of cannabis curation.
Nonetheless, price is just one piece of the puzzle, and winning the trust of retailers is likely a much bigger component of succeeding as a cannabis brand in 2022.