There is too much weed in Oregon. There is not enough weed in Oregon.
Allow me to explain. On February 1, the OLCC released its 2025 legislative report on local, regulated marijuana supply. We get these reports every two years, as required by ORS 475C.529. They tend to be downers. And this one could be the worst one yet.
The report came in as expected; which is to say, both supply and demand are trending badly for Oregon operators. Specifically:
“[t]he retail median price-per-gram of usable marijuana is at the lowest point the market has seen since legalization. The low price can be attributable to oversupply.”
Prices aren’t just low. They have never been lower. The report confirms the conclusions in my State of the State post from December 19, 2024, where I highlighted a static number of OLCC licensees, a static enforcement environment (inside and outside the OLCC system), and Oregon’s largest fall harvest, ever. I predicted downward pricing pressure. I could go on and on about all these things, but I don’t mean to bore you, and we’d like some encouraging words.
I have another way to think about the report. Oregon is not producing too much cannabis. We have stellar terroir, delicious appellations and virtuosic growers. The problem ‘round here is we cannot export it. We can’t send our record harvest to non-agricultural states, and places where cannabis can only be grown in buildings. Here are some reasons:
- Federal law.
Here is some color on that:
- Congress never gets it done. The best we got was a bill out of the House in 2022.
- The executive branch’s proposed rulemaking may move marijuana to Schedule III. Maybe. But this would not allow interstate sales.
- The leggiest lawsuit challenging the federal Controlled Substances Act wouldn’t allow for interstate commerce, even if they win.
- The export bill Oregon passed in 2019 never “goes live”, due to the state of federal law and policy.
- Oregon’s legislative efforts around the edges on interstate transfer of seeds and such have puttered out.
Early local thinkers like the Craft Cannabis Association (RIP) and Adam Smith were ahead of their time. Oversupply in the OLCC market has been around since the Oregon program started. Advocates pushing for interstate sales and federal legalization are making the only practical argument.
In the last few years, local industry seems to have gone away from this. You’ll hear complaints that we cannot sell cannabis to other states, even while industry litigates against the prevailing testing standards in other states. In that sense, Oregon is not well positioned for when the floodgates open.
I do hope the floodgates open. That is the only thing that could put an appreciable dent in oversupply, even if the fires return in the fall of 2025; even if the OLCC starts talking tough again; and even if we get some tax relief through federal rescheduling. As the report concludes:
“The Oregon recreational marijuana market . . . is continually disadvantaged by the marketplace being limited to Oregon. Year after year, supply has outpaced demand.
Until the federal government creates pathways to interstate commerce, the Oregon recreational marijuana market will be characterized by variations on the same theme: a competitive marketplace that features low prices for consumers but low margins for businesses. As we enter 2025, it remains to be seen how narrow the margins will be and how well the Oregon cannabis industry can operate within them.”
I would add to this the fact that with record-high output and record-low pricing, Oregon growers will be incentivized to sell cannabis out the back door or leave the OLCC program altogether. Options there include the intoxicating hemp market or simply assuming the risks of growing unlicensed weed and selling interstate.
The bottom line is it’s difficult to make any money growing cannabis in Oregon if you do not own the land. And it’s a shame we have too much weed in Oregon for Oregon, but not for other states.
