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Wholesale Cannabis Prices Declined in 2021, Are We Seeing the Beginning of an Efficient Market?


Leaflink has released its annual wholesale cannabis price guide, exploring price data for cannabis sold in ten markets across the country. The data was grouped into five product categories.

Pricing is a crucial topic for all businesses. Cannabis industry operators understand that at this nascent stage, pricing is very crucial to the growth of the industry. The Leaflink Wholesale Pricing Guide is one of the most excellent resources for the cannabis industry in the United States. It provides detailed data on the current and past prices of cannabis commodities in the market. This is a comprehensive analysis of wholesale pricing schemes across the country. Some of the states queried for this data include Maryland, OregonWashington, Michigan, Alaska, Arizona, California, Nevada, Oklahoma and Colorado.

Each year, the impact of current price levels on product sales is analyzed in each state; they are then compared to the national average. The guide gives a good idea of ​​the impact of prices on sales performance across the country. It gives cannabis companies an idea of ​​how they can strategically price their products to increase demand.

Leaflink Co-Founder and CEO, Ryan G. Smith said the brand has helped many platform operators expand into newer and more profitable markets. With the insights provided each year, the depth of the industry’s data set is leveraged and more informed decisions are made based on this insight. Members get market price and purchase rate data for five products.

This latest report contains wholesale pricing information for Flower, Concentrate, Edible or Ingestible, Cartridge and Pre-Roll categories. Leaflink analysts obtained this data by analyzing approximately 297,000 SKUs across the top US cannabis markets. A wholesale cannabis market like Leaflink gives investors an idea of ​​where they are headed and helps members monitor property prices across the country.

The Importance of Prices on Cannabis Sales

Within each category (cartridge, blooms, edibles, concentrate, and pre-rolls), the guide gives current pricing at the national market and state level. It also makes a comparison between the current year and the data of the previous year. According to the report, more than $3 billion in wholesale orders placed through the Leaflink platform over the past twelve months were analyzed to determine the effects of price on product sales.

LeafLink’s General Manager of Information and Marketing Services, Alex Feldman, announced the current wholesale pricing guide. Feldman enthusiastically explained that this year’s pricing guide will help cannabis companies optimize their pricing system for the next 12 months. He mentions that the platform provides the best national wholesale cannabis datasets and gives entrepreneurs an accurate picture of the impact of price on sales of cannabis products.

Highlights of this latest report

Across the ten trading markets, experts observed that wholesale cannabis prices fell on average over the past year. Some markets, like Oklahoma, saw a dramatic year-over-year price change when the data was compared. There was a 27% drop in Oklahoma concentrates, while Michigan cartridges saw a 17% drop. The cartridge category was the only product to show an average year-over-year growth of around 6%. The study also highlighted national trends and notable changes in each product category to inform operators of the direction pricing and purchasing decisions should be made this year. Market-specific dynamics in the surveyed states were also explained.

Factors at play

It is unusual that wholesale prices fell last year. When it was first observed in California around July and August, experts were unfazed, saying the market was likely correcting. The latest development has growers, especially outdoor marijuana growers across the country, alarmed. The downward pressure on prices should affect all crop sectors and all product categories. The trend could continue throughout this year or more due to the ever-increasing cannabis cultivation operations in the country. On average, prices are lower than they have ever been in some states.

Experts believe that this drop is due to a massive glut in the market. The products of the five categories flood all the markets and the supply rate is higher than the demand rate, which explains the drop in prices. This observation is not limited only to the legal industry; the black market also observes the same. Dozens of cannabis companies pointed out that they hadn’t expected such a drop in the past 12 months. On the contrary, they expected the prices to be similar to those of the 2020 sales year.

The problem is bigger in the broader flower market, and analysts have noted that the market could remain volatile until intrastate trade restrictions are lifted.

About LeafLink

LeafLink was established in 2015. It serves as an online B2B platform for cannabis businesses. He has helped reshape the way hundreds of brands, retailers and distributors run their operations. Their annual reports and industry pricing tools have provided companies with an easy way to order, manage and pay for their orders. LeafLink also makes it easier for these brands to ship or transport their products to others to focus more on growing their business. Each year, LeafLink’s marketplace receives over $4 billion in orders. They hold the largest share of wholesale cannabis in the United States, with around 42%.

LeafLink’s operations are not centralized in the United States. The team serves markets across North America and has over 250 employees. Their offices are located in Los Angeles, Toronto and New York. The cannabis trading market is also supported by venture capitalists and investors like Lerer Hippeau, Nosara Capital, Thrive Capital and Founders Fund.

Conclusion

Cannabis has become an essential commodity in the main markets of the country. Since 2020, consumers have been purchasing adult marijuana with disposable income, and growers have increased their operations to meet demand. Over the past 12 months, we have not been as supportive of the wholesale pricing system for cannabis products due to the oversupply of products in the market. The decline in wholesale prices may continue to decline until it becomes uniform across established markets nationwide.

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