Bedrocan Canada President Marc Wayne has announced his outfit will be dropping the price of all six of its strains of medicinal cannabis to just $5 per gram, a one-third discount on previous pricing and what it calls ‘the most affordable [cannabis] line in Canada.’
Wayne says his group, which initially sourced dried cannabis from its Dutch partners, has managed to get costs down and can make the discount happen without impacting its bottom line.
“With limited insurance coverage and taxation, the affordability of medical cannabis can be a significant barrier to chronically ill patients obtaining the benefits of a medical marijuana program,” said Jonathan Zaid, a member of Bedrocan's Patient Advisory Board, in a Monday news release.
Bedrocan has also announced a guarantee that all six strains will always be in stock.
Meanwhile, Canopy Growth Corporation, the company that took over Bedrocan last year, says it’s lobbying for existing taxes to either be removed from cannabis products, or have those products covered by insurance like any other medicine.
“This is medicine […]” said CEO Bruce Linton. “That means there shouldn't be a sales tax on this that you wouldn't expect to pay on any other medicinal product.”
Clearly Bedrocan wants the price drop to be seen as a good corporate citizen among consumers struggling to afford cannabis medicines under the current system, but there are other issues that may be at play here that make the move all the more interesting.
The announcement comes as Supreme Pharmaceuticals (CSE:SL, Forum) nears its own potential license-approval, with 340k sq. ft. of potential grow space, having stated it would be seeking to drop prices to around $3 per gram (or less) in quick time once that approval lands. The Bedrocan move may be in part to secure the price-shopper market which, right now, is doing a lot of business with dispensaries and ignoring the MMPR space entirely.
In addition, the price drop may be a weather balloon to see if insurance companies will bite on allowing cannabis as a covered treatment, so long as it’s saving them money over traditional medications and treatments. At $5 per gram (or less if a bulk deal can be done), that case is hard to deny.
With Canopy doing growing business under the Tweed banner and averaging prices at around $8, using the very presentable crew at Bedrocan to lobby industry and regulators while testing the value market (through their own site, at that) is a smart idea.