Canada’s dried flower exports have seen impressive growth, doubling year-over-year in 3Q24, with the sector hitting record levels in October. According to Pablo Zuanic, senior analyst at Zuanic & Associates, “The strong growth in dried flower exports signals a thriving international market, with Germany emerging as a key driver.”
- Get Benzinga's exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. You can’t afford to miss out if you're serious about the business.
Record-Breaking October And Strong 3Q Growth
In October 2024, Canadian dried flower exports reached an all-time high of $20.18 million, positioning Canada's export market to surpass $187.5 million by the end of 2024, compared to $120 million in 2023 and $96 million in 2022.
For 3Q24, exports totaled C$69 million, a 106% year-over-year increase and a 19% quarter-over-quarter rise. Zuanic forecasts that Q4 2024 will see further growth, potentially reaching C$85 million, a year-over-year jump of 87%.
Germany And Australia Lead Export Growth
While Australia remains the largest importer of Canadian dried flowers, Germany is rapidly gaining ground.
In 3Q24, Germany accounted for 26% of total Canadian dried flower exports, a significant increase from 28% in the previous year. Notably, sales to Germany, including reshipments from Portugal, were responsible for about half of the export growth during the quarter. Zuanic points out, "Germany's stock-outs and tight inventories reflect ongoing demand, suggesting strong growth ahead for the market.”
Average export prices for dried flowers in 3Q24 stood at $1.58 per gram, a decrease from $1.67 per gram in Q2 but up from $1.46 per gram in Q3 2023. Export prices to Germany were notably higher at $2.55 per gram, up from $2.39 per gram in Q2, highlighting the lucrative nature of the German market.
Zuanic also highlighted the performance of key players in the export space. "Aurora’s (NASDAQ:ACB) exports come entirely from Canada, while Curaleaf (OTC:CURLF) ships from Canada to Portugal for EU GMP processing," he noted.
Extracts Market Shows Less Consistent Growth
While dried flower exports have flourished, the growth of Canada’s cannabis extracts, including oils and vapes, has been more erratic. Exports of extracts totaled $32.02 million for the first nine months of 2024, down from $41.7 million in the same period of 2023.
Notably, flower exports now vastly outpace extracts.
In 2023, flower exports were more than twice the value of extracts, but by 3Q24, dried flower exports were nearly six times the size of extracts. Zuanic explains, "As medical cannabis markets deregulate, dried flower exports are likely to continue driving overall growth, especially in Germany.”
Read Also: $2.9B European Cannabis Market: A Strategic Blueprint For Cross-Border Transportation Logistics
Down The Commodity Lane
What does Zuanic's analysis teach other markets? We could argue that while Canada leads in cannabis exports, it remains heavily reliant on the commoditization of raw flowers, which risks the deterioration of exchange terms over time, especially as European countries begin to extract oil locally rather than purchasing Canadian cannabis oil.
Emerging cannabis economies like Colombia, Argentina, and South Africa must avoid this trap by investing in value-added industries such as oils, extracts, and vapes, to ensure they aren't relegated to supplying just raw materials.
By focusing on developing local processing and product innovation, they can capture a larger share of the global cannabis value chain and secure more sustainable, profitable growth in the future.
Read Next: German Cannabis: 20 Tons, 10M Grams – And That’s Only 0.3% Of The Market, What’s Missing?
