The price of gasoline is increasing rapidly in various parts of North America, including in Canada and the United States. Figures from the American Automobile Association show that as of last week, the average price of gasoline has jumped to $4.25 per gallon, which is quite an increase when compared to its $2.87 per gallon price for last year.
The Canadian Automobile Association has also observed the same upward trend, with the average national price of gasoline increasing to CA$ 1.72 per liter from its cost last year of CA$ 1.22 per liter.
This increase has put pressure on marijuana delivery companies in the region, which are already paying high operational costs and regulatory fees, all while trying to be profitable. Many believe this increase has been sparked by Russia’s invastion of Ukraine, which caused the price of a barrel of crude oil to go above $100 for the first time in almost a decade.
Owen Allerton, CEO and founder of Highland Cannabis, launched his business in January 2021. He decided to provide delivery services to ensure that consumers were able to obtain what they needed given that this was around the time that a new wave of the coronavirus was sweeping across the country and a lockdown had been imposed.
Allerton purchased a Tesla X for deliveries in an attempt to save on gas, noting that the vehicle possessed handy functionalities that helped make deliveries easier. For instance, the vehicle has the ability to limit speed as well as create a route for deliveries in advance. Additionally, the electric vehicle has a feature that enables Allerton to track the vehicle’s location when someone else is driving it.
Most companies are trying their best to navigate the unexpected increase in gas prices while shielding their customers from any increases in costs. This is because an increase in consumer costs could prompt consumers to purchase less, which will have a negative effect on cannabis companies and their performance.
Electric cars may be a good option for deliveries because they don’t require gasoline and only need to be charged. However, it should be noted that less-expensive electric vehicle models may not be as reliable and likely have a lower range. Additionally, cold weather also affects the reliability and range of some electric vehicles.
Hybrid vehicles may be the answer, however, as they conserve fuel while offering better mileage, thus enabling reliable customer service.
The measures being taken to reduce the bottom line impacts of the increase in the cost of fuel shows how the entire cannabis industry, including entities such as Flora Growth Corp. (NASDAQ: FLGC), can be resilient in the face of numerous challenges.
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