Wholesale cannabis prices have fallen in 2021. Are we seeing the beginning of an efficient market?

Leaflink released its annual wholesale cannabis price guide, which examined data on cannabis prices sold in ten markets across the country. The data was grouped into five product categories.

Pricing is a key issue for all businesses. Operators in the cannabis business understand that pricing is very critical to the growth of the industry in this emerging phase. The Leaflink Wholesale Pricing Guide is one of the best resources in the US cannabis industry. It contains detailed data on the current and historical prices of cannabis products on the market. It is a comprehensive analysis of wholesale pricing systems across the country. Some of the states surveyed for this data are Maryland, Oregon, Washington, Michigan, Alaska, Arizona, California, Nevada, Oklahoma, and Colorado.

The influence of the current price points on product sales is analyzed annually in each federal state; they are then compared to the national average. The guide gives a good idea of ​​how pricing affects sales performance across the country. It gives cannabis companies an idea of ​​how to price their wares strategically to drive demand.

Ryan G. Smith, Leaflink co-founder and CEO, said the brand has helped many operators on the platform expand into newer and more profitable markets. With information provided annually, the depth of the industry dataset is leveraged and more informed decisions are made based on that information. Members receive data on prices and purchase quotas in the market for five products.

This latest report provides wholesale pricing information for the Flower, Concentrates, Edibles or Ingestibles, Cartridges, and Pre-Rolls categories. Leaflink analysts obtained this data by analyzing approximately 297,000 SKUs across the most prominent U.S. cannabis markets. A wholesale cannabis marketplace like Leaflink gives investors an idea of ​​what they’re getting into and helps members monitor the prices of goods across the country.

The importance of pricing when selling cannabis

Within each category — cartridges, flowers, edibles, concentrates, and pre-rolls — the guide provides current pricing rates at the national and individual market levels. A comparison is also made between the current year and the previous year’s data. According to the report, over $3 billion worth of wholesale orders placed through the Leaflink platform over the past 12 months were analyzed to determine the price impact on product sales.

LeafLink’s general manager of insights and marketing services, Alex Feldman, announced the latest wholesale pricing guide. Feldman excitedly 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 cannabis wholesale datasets, giving entrepreneurs an accurate idea of ​​the impact of pricing on the sale of cannabis products.

Highlights of this latest report

In the ten business markets, the experts observed that wholesale prices for cannabis have fallen on average over the past year. Some markets, like Oklahoma, saw a dramatic year-on-year price shift when comparing the data. There was a 27% drop in Oklahoma concentrates, while Michigan cartridges saw a 17% drop. The cartridges category was the only product to post average year-over-year growth of about 6%. The study also pointed to national trends and notable changes in each product category to inform operators where pricing and purchasing decisions should go this year. The market-specific dynamics in the survey countries were also explained.

factors at play

It is unusual that wholesale prices have fallen over the past year. When it was first observed in California in July and August, experts were unfazed and said the market is likely to correct itself. The recent development has alarmed growers, particularly outdoor marijuana growers across the country. The downward price pressure is likely to affect every cultivation sector and every product category. The trend could continue year-round or even longer due to the ever-expanding cannabis cultivation operations in the country. On average, prices in some states are at their lowest ever.

Experts assume that this decline is due to a massive market glut. Products from the five categories flood all markets and the supply rate becomes higher than the demand, which is why the prices fall. This observation is not just limited to the legal industry; the black market is also observing the same thing. Dozens of cannabis companies have noted that they didn’t expect such a drop over the past 12 months. If anything, they expected prices to be similar to those seen in the 2020 sales year.

The problem is more pronounced across the flower market, and analysts noted that the market could remain volatile until restrictions on domestic trade are lifted.

About LeafLink

LeafLink was founded in 2015. It serves as an online B2B platform for cannabis companies. It has helped transform the way hundreds of brands, retailers and distributors manage their operations. Their annual reports and industry-specific pricing tools provide businesses 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 so they can focus more on growing their business. Each year, LeafLink’s marketplace receives over $4 billion in orders. They hold the largest share of the US wholesale cannabis trade at an estimated 42%.

LeafLink’s operations are not centralized in the United States. The team serves markets throughout North America and employs over 250 people. Their offices are in Los Angeles, Toronto and New York City. The cannabis trading marketplace is also supported by VC firms and investors such as Lerer Hippeau, Nosara Capital, Thrive Capital and Founders Fund.

bottom line

Cannabis has become an essential commodity in the country’s leading markets. Since 2020, consumers have been buying adult marijuana with disposable income, and growers have expanded their operations to meet demand. Over the past 12 months, we have not been so friendly to the wholesale pricing system for cannabis products due to the oversupply of products in the market. The falling wholesale prices may continue to fall until they become uniform across the country’s established markets.

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