Canada’s exports of dried flowers have grown at a rapid pace, more than doubling in three quarters. In October, the industry reached new highs. According to Pablo ZuanicSenior analyst at Zuanic & Associates„The growth in exports of dried flowers signals an international market that is flourishing, and Germany emerges as the key driver.”
The third quarter of 2018 saw a record-breaking October and strong growth
The Canadian dried flowers export market will surpass $187.5m by 2024. This is a significant increase from $120m in 2023, and $96m in 2022.
In 3Q24 exports reached C$69 million. This represents a 106% increase year-overyear and a 19% rise quarter-overquarter. Zuanic predicts Q4 2020 will continue to grow, possibly reaching C$85 millions, an 87% increase year-over-year.
Germany and Australia lead export growth
Germany is rapidly overtaking Australia in the importation of Canadian dried flower.
Germany represented 26% of the total Canadian dried-flower exports in 3Q24. That’s a big increase over 28% last year. Noteworthy, exports to Germany were responsible for half the growth of exports during the quarter. This included reshipments made from Portugal. Zuanic states that „Germany’s inventory shortages and high demand reflect the ongoing market growth.”
The average price of dried flowers exported in the 3Q24 was $1.58/gram. It is down from $1.67/gram in Q2, but higher than $1.46/gram in Q3 2012. Export prices were significantly higher in Germany at $2.55/gram, which is up from $2.39/gram during Q2. This highlights the value of the German market.
Zuanic highlighted key performers in the export sector. „Aurora’s ACB Curaleaf is a Canadian company that exports only to Canada. CURLF „We ship from Canada to Portugal in order to process EU GMPs,” he said.
The market for extracts shows less consistent growth
Canada has seen a more uneven growth for cannabis extracts such as oils, vapes and extracts of dried flowers. Extracts exports were $32.02 millions for the nine-month period 2024. That’s down from $41.7 in 2023.
Exports of flowers now outnumber extracts by a wide margin.
By 3Q24 the dried flower market was nearly six-times the size of the extracts. In 2023 flower exports had more than doubled the value. Zuanic says, „As the medical cannabis market deregulates, dried flower imports will likely continue to drive overall growth, particularly in Germany.”
Commodity Lane
What lessons can other markets learn from Zuanic’s research? While Canada is the leader in cannabis exports it still relies heavily on the commodityization of raw flower, which could lead to a deterioration in exchange rates over time. This will be especially true as European countries start extracting oil from cannabis locally instead of purchasing Canadian cannabis oils.
The emerging cannabis economies of Colombia, Argentina, South Africa, etc., must be careful to avoid the trap. They should focus on value-added products such as extracts, oils and vapes to make sure they’re not confined to just supplying raw materials.
They can secure a more profitable and sustainable growth by concentrating on the development of local processing and innovation.