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Cannabis companies weigh pricing strategies after OCS margin cut - BNN Bloomberg

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Canopy Growth Corp. will hold its prices as licensed pot producers weigh whether to pass along to consumers the savings from the Ontario Cannabis Store's forthcoming margin decrease.

The Smiths Falls, Ont. cannabis company behind the Tweed, Ace Valley and 7Acres brands isn't budging on what it will charge because the pot market is already"highly competitive," chief executive David Klein said in a statement to The Canadian Press.

Companies aren't required to pass along the savings to consumers by lowering their prices, so many observers believe licensed producers will adopt a range of pricing strategies when the new margins come into effect. The Canadian Press is not identifying the sources because they were not authorized to disclose the information.

Meanwhile, Moncton, N.B.'s Organigram Holdings Inc. refused to discuss its pricing model, but spokesperson Paolo DeLuca says it will ensure prices are attract to consumers and generate a reasonable margin. But lowering prices can also weigh on profitability and the company's ability to fund other ventures, and send a false signal to consumers that a product is cheaper because it is of lower quality.

"Several companies are already actively doing price drops, so price drops are very, very popular," said Lisa Campbell, chief executive at cannabis marketing company Mercari Agency.

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Cannabis companies weigh pricing strategies after OCS margin cutCannabis companies aren’t required to pass along the savings to consumers by lowering their prices, so many observers believe licensed producers will adopt a range of pricing strategies Not sure of the relevance here. In Ontario, LPs sell to the OCS who then sell to retailers. How would the OCS reducing their markup impact a producers price? It wouldn't.
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