Cannabis companies weigh pricing strategies after OCS margin cut

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.Sign up to receive daily headline news from Ottawa Citizen, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.

“It’s reasonable to think that some cannabis producers and retailers may decide to decrease their prices after the OCS announcement just to be more competitive, provided that they have the wiggle room in their market margins,” said Sherry Boodram, chief executive of CannDelta Inc., a Toronto cannabis consulting company.Making that decision is no easy task when many licensed producers are awaiting details about how deep the cuts will be.

“At this point, it’s too early for us to comment on pricing,” said Rick Savone, senior vice-president of global government relations at Aurora Cannabis Inc., which makes the Daily Special, San Rafael ’71, Greybeard and Drift products. Once companies understand the margin changes, Boodram said businesses will have to factor in production and distribution costs for each item, taxation, market competition, profitability and supply and demand.Article content

“At the consumer level they’re not aware of this OCS announcement and the reasoning behind the price decrease, so they might wonder what’s going on here?” Boodram said.

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