Since legalizing recreational cannabis, Oregon has seen an influx of dispensaries and cannabis production companies. With all that bud, is it possible that there is such a thing as too much green?
As soon as recreational marijuana hit Oregon in 2015, all bets were off. New farmers, dispensaries, head shops, and more seemingly appeared overnight. And that could only be a good thing, right? Not so fast.
One statistic sums up the not-so-silver lining of the canna-boom in the Beaver State:
In all of 2017, Oregonians consumed roughly 340,000 pounds of weed by smoking, vaping, eating, or otherwise. As of February 2018, more than 1 million pounds — yes, you read that correctly — has been logged in the state’s database. What does this 750,000-ish pound surplus mean for the industry? The answer is great for consumers but could mean trouble for business owners.
Boom And Bust
In the early days of recreational cannabis sales in Oregon, it was unheard for the price of a gram of flower to drop below $8. At such a competitive price point, there was no need to drop any lower. As stock and the sheer amount of available bud in the state continued to grow however, a $4/gram sticker price is quickly becoming the new norm.
And it’s not just smaller consumer sales that are suffering. As the Willamette Week reports, wholesale weed prices fell from $1,500 per pound in the summer of 2017 to $700 the following October.
With so much product and lagging sales, many businesses have resorted to laying off employees and, ultimately, closing their doors. The latter is complicated by the fact that, because of marijuana’s federal status as a Schedule 1 narcotic, these businesses are unable to declare bankruptcy.
A Reasonable Solution
Oregon is currently a cannabis consumer’s paradise and a canna-business owner’s nightmare. And there’s a lot to be learned from how things got this way.
First, increased regulation isn’t exactly the best solution. Currently, large dispensary chains are buying up smaller mom-and-pop business, despite bargain basement prices. While this may be a harsh reality for small business owners, the industry itself is still relatively secure.
Second, more people need to smoke weed. It sounds simple, but one of the easiest ways to stem this tide is to encourage more people to smoke. And this isn’t just in Oregon. As more states legalize and decriminalize, Oregon has a huge opportunity to export its new cash crop. The future could be quite bright.