THC and the Impact on Consumer Demand and Cannabis Prices

[vc_row][vc_column][vc_column_text]The primary factor which drives pricing in today’s cannabis market is the THC level of a product. Between 2014 and 2016, a study performed in Washington State demonstrated that flowers with a THC level of over 15% accounted for over 90% of sales. The same study proved that flowers with a THC level below 10% only accounted for 2% of expenditures.

Marijuana business concept. Cannabis leaf and Dollar banknotes. marijuana drug sales. revenue and profits in the growing medical cannabis.

Even when selling the “trim” or excess leaves and small buds which manufacturers use to make an extract, the price will usually be about $10 per percentage point, per price. Therefore a batch or trim with a 12% level of THC will sell for $120 a pound, while a 6% batch will only sell for $60.

One of the primary drivers for lab shopping is the commercial benefits of securing higher THC levels. Growers seek out labs that will provide them with the desired high THC level results, which can justify their premium pricing.

Unfortunately, consumers often make a mistaken correlation between THC levels and the quality of the cannabis product. High levels of THC and a low price point are considered ideal. But this is, in fact, a misconception.

However, an individual’s cannabis experience can depend on various factors, including the interaction and bioavailability of other active compounds, including cannabinoids and terpenes. This is known in the industry as the “entourage effect”, which means that combinations of THC and CBD and the other active compounds found in the plant are more effective than any isolated component.

Much more research is needed to understand how these combinations interact cooperatively. Additionally, more research is needed to understand how they interact with the brain’s endocannabinoid system and the effects they have.

In the meantime, consumers interested in the medical benefits of cannabis but who wish to avoid its psychoactive effects have long embraced CBD. Still, with increasing social acceptance of cannabis use, consumers are straying further into the realm of high THC.

Among current cannabis consumers, 25% prefer products with some measure (between 2:1 and 5:1 ratios) more CBD than THC, while a small minority of them (6%) prefer far more (between 10:1 and 40:1 ratios) of CBD than THC.

Much scientific research is needed to support the entourage effect with irrefutable evidence. Until then, THC percentages will continue to drive market prices and trends. This may not be in the best interests of consumers, especially those seeking to benefit from the therapeutic benefits of cannabis.[/vc_column_text][/vc_column][/vc_row]2021-03-11 19:54:29alexanderblinchevsky

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