Even though the state’s crop reached a record high last year, Oregon’s marijuana market continued to degrade, with prices hitting an all-time low.
It’s a long-standing imbalance that only grew worse last year, further taxing an already beleaguered sector. A recent assessment by the Oregon Liquor and Cannabis Commission found that the state’s supply of marijuana was almost twice as much as consumer demand.
In its annual report on the state’s marijuana industry, the commission stated that marijuana businesses are still under pressure due to the overabundance of usable marijuana on the market and declining pricing.
The situation facing the sector is well known: although marijuana is widely grown in Oregon, the state has a limited population, and the federal government forbids the sale of cannabis beyond state boundaries.
Because of Oregon’s annual marijuana excess, prices remain low.
For almost two years, retail marijuana prices have been below $4 per gram; in December, they hit an all-time low of $3.51. However, growers produced a record 12.3 million pounds last year, which was 28% more than in 2023.
According to the OLCC, the great growing circumstances in Southern Oregon, where there was no fire activity and precipitation began later in the season, as well as increased rates of harvest activity by licensed growers, were responsible for the 2024 harvest’s success.
At $960 million, overall sales in Oregon were little affected by the flat demand, thus more marijuana implies more issues for the sector.
According to the OLCC, the 2024 crop suggests that the system will have bigger inventory inventories in the future, which would further drive down prices and postpone revenue for marijuana companies.
In 2019, Oregon started restricting licenses to growers, and three years later, to merchants. Moratoriums have prevented new companies from entering the market, but they haven’t addressed the current supply and demand imbalance.
Since voters in Oregon authorized marijuana for recreational use in 2014, proponents of the business have anticipated that the federal government will eventually legalize marijuana or at the very least permit interstate shipping between states that have legalized the drug.
That hasn’t occurred, and it doesn’t seem likely that the Republican-controlled Congress or the Trump administration will seek such reforms. This implies that the cannabis market in Oregon will continue to be severely constrained for some time to come.
According to the OLCC, the Oregon recreational marijuana market will continue to be defined by variations on the same theme until the federal government establishes paths to interstate commerce: a competitive marketplace with cheap costs for consumers but low profits for enterprises.
The Oregonian’s weekly examination of the state’s economic statistics is called Oregon Insight.Check out previous installments here.
–Mike Rogoway writes on the business and technology in Oregon. His email address is [email protected].
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