Oregon grows too much weed.
The long-standing cannabis surplus has been driving wholesale weed prices down since a bumper crop in fall 2017 flooded the market. The following year's harvest was even bigger, driving wholesale prices to a new low in early 2019.
Weed costs less than half what it did two years ago. In mid-2017, a pound sold for $1,500 on average. By the following year, that price has dipped well below $700. The price has continued to fall. In dispensaries across Portland, it's not uncommon to see a gram sell for $4 or $5, and a pre-roll can go for as little as $2.
That's good news for consumers, but it puts growers in a tough position. After sinking massive amounts of capital into the infrastructure demanded by state regulators, cultivators have struggled to recoup their investments.
Oregon has compounded the problem by refusing to limit the number of licenses it grants to prospective weed farmers. Other states with caps have also seen drops in the price of pot, but few have seen dips as dramatic as Oregon.
"There weren't a whole lot of barriers to entry," economist Beau Whitney told WW in 2018. "The Oregon Liquor Control Commission basically issued a license to anyone who qualified."
But the state Legislature is now considering a law that could open the door to a potential solution as efforts to decriminalize the drug gain traction nationally. Senate Bill 582 would set up a legal framework for Oregon farmers to sell cannabis across state lines to markets in other states that have legalized cannabis.
Under current laws that bar interstate exchanges, cannabis growers resort to selling their excess product to extractors who make "value-added" products like candles, lotions and candies out of the oils squeezed from flower. But when weed is sold straight to consumers as flower, it reaps a bigger profit.
Many in the industry see interstate sales as an attractive offramp for Oregon's surplus cannabis.
"The thing about Oregon is that it is known for its cannabis, in a similar way to Oregon pinot noir," Whitney says. "For those who are able to survive, they are positioned extremely well not only to survive in the Oregon market but also to take advantage of a larger market—assuming things open up on a federal level."
So. Much. Weed.
As 2019 dawned, Oregon was sitting on 1.3 million pounds of unsold cannabis flower. That's a lot of pot, especially considering Oregonians consumed only 166,000 pounds of the green stuff in 2018. To put it in perspective, if all or most of that consisted of dry flower ready to smoke, it would…
- take Oregon smokers 7.8 years to smoke it all, if Oregonians continued to purchase legal weed at the same rate they did in 2018.
- fill 589,670,081 1-gram pre-rolls.
- weigh the same as 359 2019 Subaru Outbacks.