OLCC: Oregon produces enough unsold pot to last 6.5 years
The seesaw of supply and demand in Oregon's marijuana market is so unbalanced that recreational growers have already stockpiled enough unsold pot to sate every user for the next six and a half years.
The surplus has sent consumer prices tumbling — from about $10 per gram in October, 2016 to $5 per gram at the end of last year. Nevertheless, a new report finds that producers continue to pump out twice what shoppers can smoke.
Government regulators are completely confident they can track and contain this mountain of bud within the legal system. But they freely admit that a significant portion of pot farmers once trafficked their wares on the black market.
"Oregon oversupply is a sign that policy choices made to attract illegal and grey market producers into the new commercial system have been successful," writes Steven Marks, executive director of Oregon Liquor Control Commission, which also regulates cannabis.
"For Oregon, producing a lot of marijuana is not new news; producing a lot of marijuana that is tracked in the legal system is," he said.
The agency's latest report, "2019 Recreational Marijuana Supply and Demand Legislative Report," released Jan. 31, will likely be required reading for lawmakers, who are weighing bills that would allow marijuana-related convictions to be expunged and prohibit discrimination against organ transplant candidates who test positive for pot.
Gov. Kate Brown, however, wants to change state law to allow the OLCC to cap marijuana producer licenses based on market demand and other factors, as previously reported by the Oregon Capital Bureau.
That could put a limit on future cannabis tax revenue, which the OLCC tabulates at some $198 million in state and local funds raised since legalization occurred less than three years ago.
The 41-page document counts the state's 607 licensed retailers and 1,114 producers — and highlights another 1,117 producer and 336 retailer applications cooling their heels in anticipation of pending review or approval.
The agency announced it would temporarily stop processing new applications after June 15. About 660 of those awaiting the stamp of approval applied just before deadline in the first two weeks of June.
"The rate of submission of applications shows no signs of abating," the report states.
Officials also see a trend as consumers move away from usable marijuana, which is smoked in a water pipe or pre-roll, in favor of high-THC extracts and concentrates. Flower sales peaked at $34 million in August, 2017, while concentrate sales continued to rise in the following 12 months, jumping another 40 percent to $17.5 million in August, 2018.
Without suggesting it outright, the OLCC notes that the recreational market "could" meet the needs of every patient enrolled in Oregon's medical marijuana program. As it stands, an estimated 55 percent of total statewide marijuana consumption is procured from rec retailers.
Is there another solution to the excess of green stuff?
A perhaps pie-in-the-sky proposal backed by Eugene Democrat Sen. Floyd Prozanski would export Oregon's glut of marijuana to other weed-friendly states, according to the Statesman Journal. The idea would reduce local stockpiles at the risk of violating federal law.