In recent years, a string of marijuana companies has rushed to establish top-tier, premium cannabis products on dispensary shelves. The belief was that consumers would gravitate towards luxurious cannabis goods, much in the same way as craft beer and aged whiskey dominate a specific foothold within the spirits industry. This would be especially true for older crowds and newcomers, who would buy top-of-the-line weed to assuage any concern about this brave new world of marijuana.
Some companies even believed demand would exist for $100 marijuana grams. That isn’t happening, not yet anyway. Since the Canadian cannabis market opened last summer, customers have gravitated toward cheaper cannabis goods and mid-to-high tier goods have lost their market share.
Aurora Cannabis CFO Glen Ibbott said on a conference call last week that cheap weed accounted for only 2% of the Canadian cannabis market last summer. That number has now jumped at 17%, with cheap marijuana qualifying as anything less than C$9, which is $6.79 in U.S. dollars. In the same time span, premium marijuana has dropped from a market share in the mid-30s to just 17%.