For business owners, knowing how to strategically price products is key to success. In the cannabis industry, which remains a fragmented economy, the growing number of legal markets notwithstanding, that simple business tenet is ever more critical.
To help cannabis business owners who may be in a pricing quandary about their products, LeafLink, a national wholesale marketplace for the cannabis sector, has just released its “Wholesale Cannabis Pricing Guide 2020,” a report that synthesizes data across LeafLink’s 7,500 brands, distributors and retailers in 27 North American markets.
Pulling in data from last year, the guide analyzes the top product categories (cartridges, concentrates, edibles and ingestibles, flower and pre-rolls) on LeafLink by market share. The report also includes data deep-dives into the following U.S. cannabis markets: Alaska, Arizona, California, Colorado, Maryland, Michigan, Nevada, Oklahoma, Oregon and Washington.
For the latter analysis, readers will understand how one market compares and contrasts from another. For example, Alaska continues to have some of the most expensive cannabis prices due to high taxes and high distribution costs. Maryland, a limited medical market and Michigan, which only launched recreational sales in December 2019, also boast some of the highest cannabis prices. Conversely, thanks to market saturation, Oregon and Washington have some of the most affordable cannabis prices in the country.
While cannabis prices remained relatively stable across most categories, edibles and ingestibles showed the most dramatic price drop since 2019. The national average wholesale price of edibles was $0.08 per mg, a 11% decline from the previous year. However, the category saw the largest year-over-year increase in the number of products available on the marketplace (+258%).
In a public statement, Alex Feldman, general manager of LeafLink Insights & Marketing Services, explained the guide will “empower” businesses to set an effective benchmark when it comes to pricing products. “Pricing is an important differentiator among brands in our increasingly competitive industry,” he said. “Whether it is used to signal a product’s premium status or serves as a reflection of structural dynamics in a state or category, it is arguably the single most important driver of a company’s profitability.”
The guide also includes information on which categories are the most popular and the most competitive. In addition, the report examines how affordable and premium priced products are purchased by dispensaries.
To download a free copy of the Wholesale Pricing Guide 2020, click here.