4 Ways To Stay Competitive When Cannabis Wholesale Prices Drop


    Cannabis wholesale prices can rise and fall dramatically from one year or season to the next. Just like in any market, wholesale prices can be affected by a range of factors, from changes in cannabis product preferences to evolving regulatory standards. 

    In 2022, wholesale prices dropped by a substantial 42%, whereas in 2023, they only fell by 8.1%. Additionally, while some prices can fall in the cannabis industry, others can increase drastically as new trends emerge. While it’s difficult to know exactly how cannabis prices will change throughout the life of your business, it’s important to be prepared for a dynamic market. 

    This is particularly true as the legal cannabis industry continues to evolve. Fortunately, even if wholesale cannabis prices do drop, there are ways to ensure you can retain your profits and stay competitive in the market.

    4 Ways to Adapt to Changing Cannabis Wholesale Prices

    Based on years of experience working with legal cannabis cultivators, we’ve identified a few crucial strategies that leading vendors implement to maintain profits. Here are the 4 best ways you can adapt and thrive in a changing market.

    1. Optimize Operational Efficiency

    Operational efficiency will always significantly impact your profit margins and ability to compete as a cannabis business. Poor levels of efficiency and productivity hamper your ability to scale your company and can lead to additional operational costs. For instance, a lack of efficiency often leads to a demand for additional personnel, and labor is one of the most expensive and challenging considerations for any cultivator. 

    As 65% of cannabis executives expect sales to increase in the coming years, ensuring you can keep up with market demand will be crucial. Focus on optimizing results with:

    Automation and Upgraded Equipment 

    By automating as much of your cultivation and harvesting as possible, you will save money on labor costs, create more consistent products, and reduce the risks associated with human error. Trimming has always been a pain point in the harvesting process. But with automated trimming systems like the Mobius M108S, you can streamline and enhance the trimming process, while retaining product quality. 

    Cannabis Automation

    Committing to regular maintenance and proactive equipment upgrades will also help prevent downtime and maintain optimal functionality. Investing in the latest cutting-edge equipment, from intelligent conveyor belts to streamlined trimming solutions, will boost team performance. 

    Additionally, training staff on operating equipment proficiently, while adhering to industry compliance standards will help minimize productivity bottlenecks. 

    Reducing Operational Costs

    Reducing operational costs is crucial to maintaining a positive cash flow as your business scales. There are numerous ways you can potentially reduce expenses. For instance, energy consumption is a major issue for cannabis cultivation. A four-plant lighting module, for instance, can use as much electricity as 29 refrigerators. Using energy-efficient lighting, optimizing HVAC systems, and automating the management of electrical systems can reduce expenses. 

    Implementing sustainable practices, like recycling water, and leveraging organic waste management strategies can also help to reduce costs. Moreover, they can enhance your sustainability standing, and ensure you’re making the most of your available resources. 

    Additionally, bulk purchasing supplies and negotiating valuable deals with suppliers can reduce operational costs, allowing companies to leverage economies of scale to secure competitive pricing on essential inputs, aligned with market needs.

    Inventory Management

    Effective inventory management is also crucial to reducing waste and enhancing resource utilization. Implementing streamlined processes for inventory replenishment and rotation can help cultivators mitigate the risk of product spoilage and waste. 

    Investing in intuitive software for real-time inventory and stock level tracking can help facilitate proactive decision-making, prevent stockouts, and eliminate the risk of additional waste. 

    Additionally, accurate demand forecasting will ensure cultivators can align their production strategies with market needs. By analyzing historical sales data and current market trends, companies can anticipate fluctuations in demand to minimize oversupply and shortage issues.

    Cannabis buds

    2. Enhance Product Quality and Consistency

    While dips in wholesale prices are common in every industry, it’s important to remember that changes in market demand can counteract some of these potential losses. Cannabis benchmark studies have shown a growing demand for high-quality products in recent years, based on an increase in high-income consumers. 

    Implement Quality Control Measures

    Rigorous testing protocols aren’t just essential for ensuring you can adhere to compliance guidelines like GMP protocols, they’re also critical to maintaining product quality and safety standards. Conduct comprehensive testing for potency and purity, and partner with accredited laboratories for insights into product characteristics. 

    Based on the regulations set by cannabis boards and regulatory groups, implement consistent product standards. This will help you charge a higher price for your chosen product category and earn customer trust. 

    Cannabis quality control

    Implement cannabis quality control methods such as strain stabilization techniques (phenotype selection and genetic breeding) to ensure uniformity in cannabinoid and terpene profiles. 

    Develop Your Brand and Reputation

    Branding is important in the cannabis industry. According to industry analysts, your brand is the differentiator that can allow you to charge premium prices for your products, foster customer loyalty, and create additional barriers to entry for your competitors. 

    Take measures to separate yourself from generic brands with a unique image and personality that resonates with your target audience. Identify your unique value proposition, whether it’s a focus on potency, a commitment to solventless and green processes, or a plan for innovation. Make this value proposition evident in your marketing and sales materials. 

    Additionally, don’t overlook the importance of customer service in building an effective brand. Ensure you’re constantly delivering excellent experiences to your customers, and pay close attention to the reputation your company cultivates over time. 

    Diversify your Product Offerings

    Included in approximately half of all transactions, cannabis flower is the most popular product category in the industry. However, edible and pre-rolls are catching up, capturing 13% and 11.5% of the market respectively. Don’t limit your potential profit by focusing on just one area of the cannabis market. Based on your target audience, experiment with a range of options. 


    Look into the benefits offered by edibles and cannabis concentrates like rosin. Explore opportunities to develop additional value-added products, such as:

    • Premium lines or special editions: Unique strains or products specifically designed to address the unique requirements of different market segments. A wide range of different lines will add exclusivity and diversity to your product portfolio. 
    • Bundled products or subscription services: Subscription services and bundles can deliver convenient experiences to consumers while enhancing incremental sales. You could bundle cannabis flower products and edibles with accessories and merchandise. 
    • Cobranded products: Partnering with other, non-competitive brands in the cannabis industry can help expand market reach. For example, you could work alongside different companies to create edibles with unique flavors or custom cannabis kits.

    3. Optimizing Marketing and Sales

    Developing an effective marketing and sales strategy isn’t just something you should focus on when cannabis wholesale prices dip. An effective go-to-market strategy helps validate the pricing for your products, increase sales volumes, and strengthen your brand. 

    Some key areas to focus on when you want to increase or maintain the average price of your products include: 

    Targeted Marketing Campaigns

    Today, cannabis innovators are experimenting with a wide range of marketing strategies. Digital advertising is a popular option for 83% of cultivators. The ideal marketing strategy should always be highly targeted, based on in-depth insights into your target audience and their unique requirements. 

    Gather market research and customer insights to find out where to reach your audience through digital forums, offline events, and social media platforms. Engage with customers by sharing educational and promotional content, and show thought leadership and credibility by appearing at expos and exhibitions. 

    Ensure you’re using the analytical tools available to you throughout your marketing campaigns to track each strategy’s ROI and impact. 

    Building Strong B2B Relationships

    If you’re selling in the wholesale cannabis market, developing strong relationships with other businesses will be essential. Cannabis cultivators can open new revenue channels and unlock opportunities by collaborating with dispensaries and retailers in their area. 

    The key to success will be building mutually beneficial relationships with your partners, ensuring they have access to not just exceptional products at a wholesale price, but also consistent support. Offer access to valuable information to help your partners promote and sell your product. 

    Consider delivering training and sales enablement tools to your retail partners to give them the knowledge and skills they need to increase conversions. 

    cannabis relationship building

    Direct to Customer Sales

    Alongside boosting revenue with business relationships, cannabis cultivators can also sidestep losses from dropping cannabis wholesale prices with a unique approach to direct-to-customer sales. The global e-commerce market is expected to reach a value of $47.7 trillion by 2030 as consumers search for more convenient ways to purchase all kinds of products. 

    Take advantage of this opportunity with an online storefront where you can facilitate seamless transactions. Ensure you offer convenient delivery services to customers wherever it’s legal, paying attention to the restrictions throughout your region.

    Additionally, look for innovative ways to increase customer lifetime value and retention with loyalty programs and incentives. Loyalty programs that offer customers access to points they can exchange for exclusive perks after each purchase can drive significant increases in revenue.

    4. Budget Planning and Optimization

    Finally, effective budget planning and optimization are crucial for the long-term success of cannabis cultivators. Implementing robust strategies to help you optimize cash flow and minimize risks will ensure you can protect your profits when cannabis wholesale prices dip.

    Careful cost analysis and budgeting 

    Cost analysis and budgeting strategies help to ensure you’re making the most of your resources. Regular reviews and audits will help you assess the financial health of your business and identify potential areas for improvement. They’ll also ensure you can adhere to cannabis tax requirements and avoid regulatory issues. 

    When assessing your business, look closely for ways to save on costs. Implementing more robust cannabis control measures can reduce waste and similar expenses. Using automation technology can help minimize the need for extra labor. 

    Keep your budget strategy flexible so you can adapt to changes in the wholesale cannabis landscape and invest in new opportunities as they arise. 

    Leveraging Technology

    Analysts believe that access to the right technology resources will help cannabis companies in various ways, from facilitating automation to improving product quality. Investing in technologies that streamline the production and management process, from automated trimming equipment to conveyor belts, will streamline processes and reduce labor costs. 

    Analytical software will help you access valuable insights into customer preferences, market trends, and opportunities to improve operational performance. Many companies are even beginning to use AI to accelerate access to useful insights. 

    You could also consider exploring revolutionary technologies like blockchain, which provides a transparent and immutable record of transactions. This boosts supply chain transparency and traceability and can protect you from common risks. 

    Risk Management

    Finally, risks can easily drain your profits as a cannabis cultivator, even in a growing market. Look for ways to protect yourself from emerging threats in the industry. For instance, diversifying your investment in different types of cannabis products, such as edibles and concentrates, will help you avoid losses when market preferences change. 

    Staying informed about regulatory changes linked to cultivation, cannabis control, and compliance standards will also help you avoid losing customers and incurring legal liabilities or fines. This will be crucial as the legal cannabis industry continues to evolve. 

    What’s more, developing contingency plans that help you to prepare for future market fluctuations, like changes in purchasing habits, can mitigate the impact of unforeseen events on financial performance.

    Stay Competitive when Wholesale Prices Drop 

    Cannabis Trimming

    No matter the market you’re operating in or how you choose to approach cannabis sales, there’s always a chance that changes to cannabis wholesale prices could impact your profits and growth. Fortunately, with the right strategy, you can stay profitable and competitive. 

    At Mobius, we offer access to a broad range of tools that can help you improve operational efficiency, reduce costs, and scale your operations to match market demand. 

    Reach out to our team to discover how our solutions can open the door to new avenues of profit and protect you from disruptions caused by changes to wholesale cannabis prices.

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