I’ve had a strong inclination to what prices per gram will look like in Canada as we get deeper into legalization. Call it a bias.
I’ve got a few (like most people). Some bear out, some don’t. Regarding the latter, hey, even a broken clock is right twice a day. Maybe if one waits long enough, their own bias will ultimately manifest itself.
With respect to retail prices for weed, I fully expect a ‘W’ pattern to present itself. That is, I expect to see higher volumes at both the high and low price points, with a modest uptick in the middle. I expect there will be ‘dead zones’ – where particular price points at the bottom of the ‘W’ will occur.
Having had many of my bias balloons embarrassingly popped in the past, I’ve tried to learn to unseat biases where I can. Better yet, as TheCannalysts are wont to do, we validate.
The good people at CannStandard were kind enough to provide actual sales data from some 360 stores with data from Alberta, Ontario, Manitoba, and BC (about half of existing outlets).
As to my ‘W’ theory? I’ll let the reader decide how right/wrong my expectations are. A notable takeaway is the concentration around the $9 mark. I’d take this as a general ‘positive’ for producers, as it suggests some sort of baseline is beginning to form and solidify. The data covers sales from September through December 2020. We’ll be looking at finding a way to look at changes over time, and also be looking to find price/volume data on 2.0 products as well.
If your particular licensed producer darling is in the $20/gram+range, or at $7/gram – it isn’t in the apparent ‘sweet spot’ for sales in total dollar volume. And speaking of volume, there’s tons more weight moved the lower the price one goes. Many producers will have an effective floor in which they won’t be able to compete beneath, not only in price, but product provision (think about the recent stock-outs of Organigram ($OGI) with their foray into the ‘value’ range).