Oregon Marijuana Market Has Too Much Weed, Price Is Dropping

Oregon’s problem of excess weed stock from overproduction has forced the hand of the state legislature to pass two laws to stem the falling prices and sell the pot beyond the state’s borders.

The state legalized marijuana in 2015 had pursued a liberal policy in granting licenses to growers to bring the black market into the now-legalized industry’s fold.

Although the policy helped in breaking the black market, the higher number of licensed-weed growers in Oregon led to a problem of plenty from their overproduction of pot.

The current surplus level is such that it would take at least 6 years for the 4 million residents of Oregon to smoke out the stock.

An insightful report of 2019 Oregon Liquor Control Commission report notes the state has 2,100 grower licensees and they have been adding a massive supply of weed to the market.

The problem of weed surplus

The supply overhang of marijuana also affected prices.

The marijuana Oregon conundrum is that the median price has crashed abysmally in the last three years. From $10 plus per gram in October 2016 it is now down to less than $5 in December 2018.

Also, keeping the excess stock for long is another problem. It would go stale and perish as the shelf life is an average four to eight months if it is sealed and kept away from light.

This hardship has pushed many producers to turn supplies of weed into extracted oil that would last at least a year.

New legislation to tackle weed surplus in Oregon

To address the oversupply issue and unsold marijuana, lawmakers in Oregon passed two bills in the last week.

Senate Bill 218 vests the Oregon Liquor Control Board more powers in balancing the number of weed grower licenses on the basis of supply and demand.

The Senate Bill 582 empowers the governor to sign agreements with other states for importing and exporting of marijuana.

Curbs on interstate trade

In the U.S, transporting cannabis to other states is illegal. Some argue that Oregon’s export legislation will have to get the nod of Washington, D.C., or guidance by the U.S. Department of Justice allowing interstate transfers.

In legal weed, the Trump administration is not very friendly.

In 2018, then-Attorney General Jeff Sessions struck down an Obama-era federal policy called the Cole memorandum that gave states the liberty to legalize pot without the threat of a federal crackdown.

So, it needs to be seen how the Federal authorities will treat the proposal for an interstate marijuana trade.

Recreational marijuana is legal in 11 states of the U.S while 33 states have made medical marijuana legal.

Adam J. Smith, founder of the Craft Cannabis Alliance is a strong proponent of change in federal policy that is now at cross purpose with state laws.

Smith notes that it makes no sense to ask states legalizing weed to create their own captive industry and stay within limits.

Oregon was an early bird in decriminalizing marijuana possession way back in 1973. But it took another 25 years to create a medical marijuana program that started in 1998.