It took some time, but Canadian marijuana producers seemed to finally accept cheaper pots.
The so-called value segment of the Canadian marijuana market-was determined by an analyst to have a retail price of less than $6 per gram-exploded in recent months: it accounted for more than 40% of the total dried flower sales in July, up from 10% of the market in September 9 last year, according to the industry data provider of Headset.
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The popularity of these “value” products has helped companies such as Aurora Cannabis Inc. and Canopy Growth Corp. To report the sales figures better than expected, while providing consumers with a competitive price product that can attract people away from illegal markets.
Graeme Kreindler, an analyst at Eight Capital, said: “The real value segment aims to attract people in [legitimate markets], but the manufacturer’s work is to keep that customer and then trade them with more expensive products.” Interview.
But their popularity may have to pay the price. According to some analysts, by selling cheaper prices, marijuana companies can risk damaging profits as well as sacrificing more revenue even though it is possible to release the inventory much faster.
According to recent figures from the Canadian Department of Health, there are over 669,000 kilograms of unpackaged dried flowers stored in the cellars of cannabis manufacturers across Canada. That can take more than a year to resolve suppose no pot is produced in the water and if the Yes we Cannabis shirt, hoodie, tank top, sweater inventory is not destroyed.
Analyst Andrew Carter of Stifel Financial Corp. said: “The interesting thing for me is that some Canadian producers do not understand that they can maintain a higher price per volume of flower products.
― “With excess capacity, there will always be people who ultimately decide to cut down on others. ”
That’s what happened in Oct when Hexo Corp. Launched the Original Stash brand, selling about one ounce of marijuana for about 125 dollars, a price would fit similar products found on the illegal market. Currently, there are about a dozen cannabis producers who are selling similar sized types for the entertainment market.
Carter said Canopy Growth recently accepted value segments with cheaper bulk selections after companies lost market share and need to drive sales.
― “If they can focus on growth, perhaps the Yes we Cannabis shirt, hoodie, tank top, sweater [Canopy] can regain part of their market share,” he said.