When it comes to cannabis prices, they are as crucial to the shopping experience for consumers as any other consumer packaged goods, according to a new report by Deloitte. But price data from both US and Canadian markets also show how cannabis is different from other CPGs.
Price matters
Perhaps unsurprisingly, price is important to both American and Canadian consumers, where between 27 and 34 percent cite price as a key driver when choosing cannabis products.
That means it’s also a driver for those who shop the illicit market: “… 70 percent of respondents who shop the illicit market states that better or lower pricing was a key reason they turned to that market,” reads the report.
What’s different?
But consumers face more difficulty assessing the value of a product compared to shopping to more conventional types of products. While many cite criteria such as flavor and smell as being important to deducing the quality of a product, 57 per cent cite THC and CBD content as the most important way they are able to discern product quality and value.
Another difference: product pricing is not consistent nationally. “There are numerous pricing differences among regions within the same country, including different competitors, retailers, regulations, growing conditions, and costs and tax structures,” reads the report. “These differences lead to wildly varying pricing across regions for identical SKUs.”
A premium opportunity
What’s evident is that consumers will pay more for premium products. But with limited ways to discern between products, brands have an important job.
“It appears the discerning consumer has learned over time the benefit and the advantage of a live resin product over a distillate,” for example. “Brands, however, will likely need to educate their consumers to appreciate why the higher price might be worth it.”
