Wholesale cannabis prices stabilized or rebounded in some key markets through the summer, but cultivators should brace for renewed downward pressure as the fall harvest boosts inventories through the end of the year.
Data collected in 13 states by the LeafLink platform shows that after months of record-breaking lows, wholesale Cannabis flower prices have stabilized in a few key, older markets such as California and Michigan.
Wholesale Cannabis flower prices
Medical and adult-use cannabis is legal in most states listed, except for Oklahoma or Arkansas, which are still medical-only. Missouri and Maryland launched adult-use sales in February and July 2023, respectively.
Maryland reached the highest price in august 2023. The price is $2,510 and the sales increased 41.1% comparing to the last year end. Alaska is $2,406 which one is the 2nd highest of this year. The sales decreased 3.5 which is the only one decreased in top 5. Missouri is $2,019, Arizona is $1,850 and Nevada is $1,735 which took from 3rd place to 5th place.
|State||Dec2021||Dec2022||Aug2023||Sales increasing rate|
Producers in the states, who have long struggled with low prices, will benefit, while retailers already face higher costs.
Stores were paying 29%-plus more in August year-over-year for wholesale cannabis flower in California because the amount of licensed square footage has dropped by more than 15%.
Prices in Michigan rebounded by 19% since the end of 2022 and were up by more than 4% compared to a year ago as the number of Cannabis retail outlets expanded and authorities cracked down on illicit sales.
Flower prices in Oklahoma and Oregon, which have reported some of the lowest wholesale cannabis prices in the United States, increased by more than 7% and 5%, respectively, versus a year ago.
Overall prices in the 13 states tracked across LeafLink’s platform were up by 4% year-over-year in August 2023 and 15% compared to the end of 2022.
But price compression amid a glut of inventory continues to be a challenge for wholesalers in most states.
Connecticut-based wholesale Cannabis data and analysis company Cannabis Benchmarks wrote in a recent blog post that prices have hit a “historic low,” with the spot index reaching only $936 per pound – a 7.3% decline from September 2022.
Rightsizing supply and demand
Colorado had the lowest wholesale Cannabis prices in the country in August at $810 per pound, according to LeafLink data.
Arizona’s massive greenhouses oversupplied the market through 2021 and 2022, LeafLink’s Burstein said, but prices were up slightly in August, year-over-year, by more than 2%.
Eric Offenberger, CEO of Arizona-based vertically integrated cannabis company Vext Science, told MJBizDaily that’s why he and his team chose to strategically shift their focus from wholesale cannabis flower sales.
They sell the company’s cultivated products through owned retail channels instead.
“We made the determination that we didn’t want to be a [flower] wholesaler,” he said. “We wanted our supply to match our demand.”
Wholesale cannabis in the Massachusetts market is also rightsizing after losing cross-border shoppers from states that have now legalized Cannabis, such as Connecticut, New York and Vermont, Burstein said.
According to Burstein, the portion of total sales from out-of-state buyers dropped from 25% to closer to 10%-15%.
As a result, wholesale Cannabis prices declined by more than 18% since the end of last year and more than 27% since August 2022.