Leaflink published its yearly Wholesale Cannabis Pricing Guide, exploring the data of cannabis prices sold in ten markets in the country. The data was grouped into five product categories.
Pricing is a pivotal topic for all businesses. Operators in the cannabis business 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 in the U.S. cannabis industry. It gives detailed data on the current and previous prices of cannabis merchandise in the market. It is a comprehensive analysis of wholesale pricing systems across the country. Some of the states surveyed for this data include Maryland, Oregon, Washington, Michigan, Alaska, Arizona, California, Nevada, Oklahoma, and Colorado.
Annually, the impact of the current price points on product sales is analyzed in each state; they are then compared with the national average. The guide gives a good idea of how pricing impacts sales performance throughout the country. It provides cannabis businesses an idea of how they can strategically price their goods to increase demand.
Leaflink co-founder and CEO Ryan G. Smith said that the brand had helped many operators on the platform expand into newer and more profitable markets. With the information provided annually, the depth of the industry's dataset is leveraged, and more thoughtful decisions are made based on this information. Members get data on pricing and purchasing rates in the market for five products.
This latest report contains information on the wholesale pricing for the categories of flower, concentrates, edibles or ingestible, cartridges, and pre-rolls. Leaflink analysts obtained this data by analyzing about 297,000 SKUs in the most prominent U.S. cannabis markets. A wholesale cannabis marketplace like Leaflink gives investors an idea of what they're heading into and helps members monitor the prices of goods across the country.
The Importance of Pricing on Cannabis Sales
Within each category—cartridge, flowers, edibles, concentrate, and pre-rolls—the guide gives the current pricing rates at the national and individual state's market level. It also makes a comparison between the current year and the previous year's data. According to the report, over $3 billion worth of wholesale orders made through the Leaflink platform in the last twelve months were analyzed to determine pricing effects on product sales.
LeafLink's general manager of insights and marketing services, Alex Feldman, announced the current wholesale pricing guide. Feldman excitedly explained that this year's pricing guide is going to assist cannabis businesses in optimizing their pricing system for the next 12 months. He mentions that the platform provides the best national wholesale cannabis data sets and gives entrepreneurs an accurate idea of the impact of pricing on cannabis product sales.
Highlights of this latest report
Across the ten business markets, the experts observed that wholesale cannabis prices declined on an average last year. Some markets, like Oklahoma, saw a dramatic year-over-year price shift when the data was compared. There was a 27% decline in Oklahoma concentrates, while Michigan cartridges experienced a 17% decline. The cartridges category was the only product to show an average year-over-year growth of about 6%. The study also pointed out national trends and notable changes in each product category to inform operators of the direction pricing and purchasing decisions should take this year. The market-specific dynamics in the survey states were also explained.
Factors at play
It is unusual that wholesale prices declined last year. When it was first observed in California around July and August, experts were unfazed, saying that the market was probably correcting itself. The latest development has alarmed growers, especially the outdoor marijuana growers across the country. The downward pricing pressure is likely to hit every cultivation sector and every product category. The trend might continue throughout this year or more because of the ever-growing cannabis cultivation operations in the country. On average, prices are lower than they've ever been in some states.
Experts believe that this decline is because of a massive glut in the market. Products across the five categories are flooding all the markets, and the rate of supply is getting higher than the rate of demand, which is the reason why the pricing is declining. This observation is not only limited to the legal industry; the black market is also observing the same. Dozens of cannabis businesses have remarked that they did not anticipate such a decline in the last 12 months. If anything, they expected the prices to be similar to the 2020 sales year.
The issue is more prominent in the whole flower market, and analysts remarked that the market might remain volatile until intrastate commerce restrictions are removed.
About LeafLink
LeafLink was established in 2015. It serves as an online B2B platform for cannabis businesses. It has helped reshape the way hundreds of brands, retailers, and distributors manage their operations. Their yearly 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 the growth of their businesses. Every year, LeafLink's marketplace receives over $4 billion in orders. They hold the most significant share of the U.S. wholesale cannabis commerce, with an estimated 42%.
LeafLink's operations are not centralized in the United States. The team serves markets across North America and has a workforce of over 250. Their offices are located in Los Angeles, Toronto, and New York City. The cannabis commerce marketplace is also supported by VC firms and investors like Lerer Hippeau, Nosara Capital, Thrive Capital, and Founders Fund.
Bottom Line
Cannabis has become an essential commodity in leading markets in the country. Since 2020, consumers have been buying adult marijuana with disposable income, and cultivators have increased operations to meet the demand. In the past 12 months, we have not been so friendly to the wholesale pricing system of cannabis products due to the oversupply of products in the market. The declining wholesale pricing may keep declining till it becomes uniform across the established markets in the country.
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