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3-Year Anniversary Recap: Oregon Producing Too Much Marijuana

Oregon Producing Too Much Marijuana
Photo Gracie Malley for Cannabis Now

Economics

3-Year Anniversary Recap: Oregon Producing Too Much Marijuana

Reports say there’s too much cannabis being produced in Oregon. The result? Plummeting pot prices.

This month marks the three-year anniversary of when Oregon officially launched its recreational cannabis market. Yet, despite being one of the first in the nation to go fully legal, the state can be hardly referred to as a mecca of marijuana.

While newcomer legal pot state Nevada has generated in upwards of $340 million in a matter of its first 10 months of operation, Oregon is still struggling to break the $200 million per year mark. It almost seems that the population has little interest in legal weed. A recent report from the Oregonian points to statistics showing that the majority of adults throughout the state haven’t consumed the herb in the past month.

Oregon cannabis producers have apparently turned out more marijuana than the population can (or wants to) consume. Some reports have suggested that Oregon’s pot consumers are only snatching up roughly 10 percent of the state’s weed supply. Right now, the state has about 1 million pounds of surplus bud. This over-abundance, of course, has caused prices to crash. Wholesales prices dropped by 50 percent in 2017. Now, it is not unheard of to find cannabis in some Oregon dispensaries going for as little as $1.50 a gram. While this is great for the frugal consumer, the cannabis farmers who got the industry started back during the heyday of the state’s medical marijuana program are reportedly experiencing some tough times — some are even at risk of losing it all — while they wait for the market to recover.

The surplus problem is the result of the decision made by lawmakers and regulatory officials early in the game. Although many believe there should have been a license cap, the state elected to host a veritable market free-for-all, giving cannabis companies, even those from out-of-state, the ability to apply for multiple licenses. Making licensing fees relatively inexpensive for applicants only served to compound the problem.

However, this bungle of the buds was made with the best of intentions. The powers that be were trying to create a taxed and regulated cannabis system that would completely deter consumers from the black market. But critics of the system say the regulatory concept has backfired, pushing “formidable” amounts of cannabis into the streets.

“If you were an investor and you had just dropped $4m into a [marijuana] grow and you had thousands of pounds of flower that was ready to go but you had nowhere to sell it, the only thing you can do is sell it on the black market,” said former Oregon State University professor Seth Crawford. “It was a system designed for failure. You created this huge industry that has nowhere to put its product.”

Others argue the system is designed to push out local producers and open up the market to large corporations. Already a retail cannabis company called Nectar has opened 13 stores across Oregon. It plans to add three more in the near future. According to a report in the Associated Press, the company is also looking to buy up dispensaries that have been put up for sale. Oregon Craft Cannabis Alliance founder Adam Smith told the news source that 70 percent of the state’s small cannabis farmers are at risk of going out of business. He says it is conceivable that 10-12 Starbucks-like companies could eventually run the Oregon cannabis industry if the situation is not remedied.

At the beginning of June, the Oregon Liquor Control Commission, which oversees the states cannabis trade, put the breaks on the processing of new licenses. The plan is to temporarily “pause” applications from June 15 until sometime later next year. To put into perspective just how many applications hit the OLCC, there have been more than three thousand filed since May. “We need to focus on what we have and maintain it and get caught up on the backlog” of applications, said Mark Pettinger, an OLCC representative, according to the Redmond Spokesman. “We want people to be aware of it.”

As it stands, the OLCC has issued 1,900 recreational marijuana licenses (most of which are for production). State officials are concerned that, without some sort of attempt to rein in the madness, the excess weed is destined for distribution through interstate drug traffickers. But the state does not have the “authority” to refuse applications for recreational marijuana licenses. The temporary break is only intended to inform the masses that there is a stack of applications that must be dealt with before others can be considered. Still, they are worried that any act to shun additional licenses will lead to lawsuits.

At the end of the day, Oregonians just need to start smoking more weed.

TELL US, have you ever had too much cannabis?

2 Comments

2 Comments

  1. Maxcatski

    July 10, 2018 at 6:00 pm

    We need free markets to reduce the price of cannabis. Those who are able to adapt will succeed. Those who are not able to compete will fall by the roadside. Into the future with more and better pot than we have ever had before. And cheaper, too.

  2. dr green

    July 7, 2018 at 6:12 am

    good thing! it about time that the prices reaches jamaican levels!

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