If you live in Portland and enjoy weed, you're in luck: We're currently experiencing a massive statewide cannabis surplus. Prices are falling, and there's no bottom in sight.
It's estimated that Oregon now produces three times more cannabis than its regulated adult-use market consumes in a given year. And the bubble only inflates as more and more speculative cash goes online. Presently, the Oregon Liquor Control Commission has issued 912 producer licenses, while an additional 1,107 await approval.
This means more grow operations will be launching amid an already flooded market—one best characterized by desperate and yet-to-profit farms competing with other desperate and yet-to-profit farms, and by growers slashing wholesale rates to the bone and sacrificing margins to meet bare operational costs.
According to a recent report in Marijuana Business Daily, wholesale prices for raw, extract materials—post-harvest trim, B-grade buds and other lesser-quality flowers, the kind of stuff that's commonly used to make the concentrates that fill inexpensive, disposable vape cartridges—have fallen to as low as $50 a pound.
This means that not only will flower prices bottom out in the coming months and years, but we'll probably see dramatic price reductions on concentrates and edibles as the oversupply is transmuted into more shelf-stable products.
To be clear, though, we're not applauding the current state of the industry—a lot of people stand to lose a lot of money—but one person's flaming investment is another person's smoke, smoke that consumers will be enjoying for unprecedented low prices until the market levels out.
And as state lawmakers grapple with how to best address the oversupply—reducing canopy sizes, capping the number of producer licenses the OLCC may award, establishing regulatory mechanisms for interstate cannabis trade, etc.—there's no telling when that leveling out might happen.