Premium Cannabis: High Pricing for Top QualityGas. Groceries. Housing costs. Amid unprecedented inflation, the price of everything is going up – including cannabis. But is the premium-priced herb worth the hype?
As discretionary funds shrink in most pockets, consumers find that both supermarket and dispensary shelves look sparser and more expensive than usual. Most habitual consumers may react by opting for more affordable cannabis products. But are affordable options becoming less available?
President of Veritas Fine Cannabis, Jon Spadafora, uncovers the connection between premium quality and premium pricing and just how consumers and producers are driving new market standards.
THE CONSUMER WANTS PREMIUM CANNABIS
Today, consumers have access to more varieties and higher quality cannabis flower, oil, and a growing range of alternative extracts. It’s been traditionally difficult to predict quality solely from the physical and olfactory characterization of marijuana flowers before legalization. But consumers are getting more thoughtful about products and what goes into producing them. They’re looking at labels and can weigh factors such as cost and quality into their purchasing decisions.
“We have crossed a line where most people who are purchasing cannabis have done so primarily in legal environments. It's not like the old days when you bought cannabis from someone who had it without a ton of control over what was available to purchase. Today consumers go into a store with certain expectations, and it is on the brands to make information available that allows the consumer to purchase the right product,” responded Spadafora when asked how consumer habits are adapting to premium-priced cannabis.
Then, he continued, “Interactions with the QR code on our jar, which provide the consumer access to terpene and cannabinoid test results for each strain, have increased steadily, a trend we believe will increase as consumers continue to become more educated on cannabis.”
These days, more resources are available to research and track ingredients, production and testing methods, and even terpene profiles. Additionally, vetted experts in dispensaries, production centers, and farms can craft this information to meet specific consumer preferences. Spadafora likens the buying experience to buying the waiter's recommendation at a restaurant because of their wealth of knowledge and eagerness to satisfy their customers’ needs.
However, even with increasing transparency and verifiable expertise, consumers still can’t and won’t reach the price point for premium cannabis products. This, Spadafora explains, is due to the coexistence of two kinds of consumers.
“Like every other product, cannabis should appeal to connoisseurs who value the plant very highly and are willing to pay for specific qualities, as well as consumers who are less familiar with or have a smaller budget to spend. As long as premium products provide value to the consumer, there is room for both to exist.”
Overall, cannabis is of much better and consistent quality than it was even just ten years ago. Modern mid-quality cannabis is often equivalent to the premium cannabis just a few decades prior. Ultimately, the consumer paying the premium prices allows for technological developments and experimentation that weren’t afforded the growers of the past. Exclusivity and specialization of premium cannabis are just as necessary as decent quality cannabis at an affordable price.
THE PRODUCER NEEDS PREMIUM CANNABIS
At Veritas Fine Cannabis, the most significant expenses are labor and nutrients. These costs are reflected in the prices consumers are willing to pay for gold-standard cannabis products. Producers are very aware of these costs and how they impact and respond to consumer demand.
“We spend a lot of time reviewing our processes to find opportunities to lower our cost per gram, but each of these is critical for creating high-quality products that will show retailers and consumers value in a challenging market,” says Spadafora.
Besides extraction technology and energy, nutrient inputs can be extremely impactful to the quality of cannabis produced. Strategizing the most efficient and quality-driven product is a priority for producers looking to profit from their costly inputs and to ensure ‘consistently high-quality cannabis.’
Spadafora argues “that in today’s market, most producers have had to take a hard look at the price they charge to ensure consumers find value in the offering. Veritas Fine Cannabis uses CANNA nutrients and adheres to a process that requires lots of time and attention.”
The brand story also plays an important role here. The brands that care most about providing the best quality to consumers are incorporating these resources and letting their wholesale and individual customers know that.
THE MARKET EXPECTS PREMIUM CANNABIS
Spadafora reveals that the most expensive products on the market today are those that are rare, stating that “scarcity typically leads to higher prices.” Scarce strains that require specialized inputs and labor produce exceptional products that usually match the price.
The market will continue to experience rising prices, notwithstanding inflation. Cannabis legalization has always anticipated rising costs for producers and consumers, especially for markets at the beginning of their growth. But, like most, there will come a time when the market eventually stabilizes.
Successful producers are those that home in on their consumer base – whether that be the eclectic connoisseur with money to burn or the everyday man buying medical cannabis to help him sleep.
“Our market is a better place for consumers because of the fact that products from both ends of the spectrum are available,” says Spadafora.