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What is driving the supply glut in Oregon?

Asia Mayfield
Written by Asia Mayfield

Oregon’s lush, fertile fields provide the perfect home for cannabis crops. When the state legalized recreational cannabis in 2014, professional growers swarmed the area and bountiful harvests soon followed.

For consumers, the situation is ideal. Cannabis prices in Oregon are notoriously low. However, the supply glut is affecting growers. As of January 2019, Oregon has issued 2,100 grower licenses. There is so much legal cannabis being grown that it would take the state’s four million residents more than six years to consume all of it, leaving local growers in a precarious situation.

Cannabis has a short shelf life. It goes stale within several months. So, simply sitting on the excess flower until you can pump it into the market won’t work. Concentrates tend to last a little longer, but not by much.

The obvious solution would be to sell excess cannabis to other states. However, because the plant is still classified as a Schedule 1 drug at the federal level, interstate sales are banned. State cannabis markets exist in a murky legal area. The current administration has adopted a hands-off approach regarding state cannabis sales, but their position could change at any moment.

According to Adam J. Smith, founder and director of Oregon’s Craft Cannabis Alliance,

“You have people using water in the desert in Nevada to grow mediocre cannabis, or in Florida, where they have to dehumidify giant spaces, consuming twice the energy…Oregon wouldn’t have an oversupply problem if we could access legal markets like these.”

If growers are unable to offload their supply, they could potentially lose a lot of money. The number of licensees will diminish as people go out of business.

In the meantime, legislators have put a moratorium on new licenses while cannabis lobbyists and industry professionals fight for legality.

Image source: POW 420

About the author

Asia Mayfield

Asia Mayfield

Asia Mayfield is a freelance writer who focuses on the cannabis industry. She can be reached at a.mayfield18@gmail.com

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