In the Canadian cannabis market, 2019 began rolling out the new lines of Cannabis 2.0 products as brands hoped to expand their customer base with new product line options such as drinks, gummies, chocolates, and vapes. It, however, experienced a bumpy rollout due to the challenges of Covid-19, causing more consumers to enter the market with budget flower products.
1. Falling Cannabis Price
Canadians experienced a massive fall in the prices of Cannabis in the recreational market. Therefore, it attracted more and more people. As some brands continued ramping up the 2.0 product rollouts in 2020, cannabis prices for recreational use sharply dropped to their lowest price since the beginning of recreational legalization. According to the data from Stats Canada, in 2019, the cost of licensed recreational Cannabis was 20 percent higher than the illicit and unlicensed Cannabis. By 2020, the recreational budget buds in Canada experienced a slight drop by only 6 percent more than illicit Cannabis.
2. Increase of awareness and purchasing among Canadians
How did the budget brands rise suddenly? With almost every major licensed producer launching affordable brands, the flower suddenly became cheaper. Such brands include Daily Special, Pure Sunfarms, Good Supply, Trailblazer, Original Stash, Twd., Re-up, and The Batch. Available data shows most of these brands increased their purchasing and awareness among consumers in Canada. However, the proliferation of budget brands started with a raw cannabis surplus in mid-2019.
Canada Federally legalized Cannabis.
As soon as Canada legalized Cannabis federally, LPs got a green light to grow the plant, and they massively planted the seed as much as possible. Therefore, the operations of massive growth then produced more supply than the available demand. There was four times the amount of inventory of dried Cannabis than the available amount for selling as of October 2019. In a similar month, HEXO, their original brand. It offered 28-gram bags of Original Stash for CAD 127.70, equivalent to CAD 4.67 a gram. Following that were other brands as consumers started favoring the options of lower-priced Cannabis.
For instance, Aurora Cannabis pivoted away strategically from launching a premium brand. It instead introduced Daily Special, selling bulk Cannabis for as low a price as CAD 4.67 a gram. The sale of Cannabis at meager prices and in bulky quantities allowed the offloading of oversupply of Cannabis and appealing to the consumers who are budget conscious. That became very necessary as the Covid-19 impact strained the disposable incomes. Additionally, the cannabis market in the US grew as a result of the economic downtown.
3. Change of Behavior as a result of COVID-19 impact
During the peak times of COVID-19 prevalence globally, most countries, including Canada, issued lockdowns. This consequently led to a sharp change in behavior. Most people were bored staying indoors, and their emotions were majorly stressful. Therefore, the price of Cannabis also fell sharply with a surplus in production from its legalization. With all those factors combined, marijuana became very popular, especially the budget flower.
People wanted to recreationally use marijuana to relieve the worries and stress that loomed due to the pandemic. As more brands came about and put efforts into the market presence following the legalization of Cannabis, they made Cannabis too available. Therefore, it produced a situation where most people could afford the product.
4. The Growth of Online Drug Markets
Research has more recently begun to consider the online drug markets as a reason and source for the change in cannabis prices and a sharp increase in buying habits. The online drug markets are also known as the cryptomarkets and surfaced due to the ‘’dark web. The cryptomarkets follow a design that resembles the one for legitimate market paces like that of eBay or Amazon.
It allows vendors to advertise their entire product inventories to the prospective buyers as product listings donate prices by shipping information, quantity, and customer reviews. Cannabis takes a sizable proportion of all the product listings in the cryptomarkets. The Cannabis that originated from Canada represents at least six percent of all the listings of products advertised on the Silk Road, one of the original cryptomarkets online.
The cryptomarkets facilitate the direct links between consumers and producers. It thus bypasses the wholesale drug market level while attracting consumers through the lower advertised prices, better quality, and a wider selection variety. An estimated 7-18 percent of the users of Cannabis have taken the drugs ordered from the crypto markets like Silk Road.
The online drug markets have led to a vast thrive in selling illegal stores and flower buds. There is little incentive for most buyers of the illegal pot to switch to the legal one. That is because the latter is more expensive and less available than the ‘original’ and ‘strong’ ones from the online black market. Although Canada legalized medical marijuana in 2001, it still restricts it to mail-order purchases from licensed providers. Therefore, that has spurred the propagation of unsanctioned retailers.
Canadian people love budget buds. With the advent of cannabis legalization, the price of Cannabis has continued going down. That has mainly been caused by the resilience of the black-market cannabis, especially the online black market, and the emergence of more producers and brands. More and more people are also accepting the use of marijuana, especially for medical purposes and recreational purposes. This change in trends and behaviors has thus necessitated the growth of demand for budget buds in Canada.