Although cultivators in Oregon grew record amounts of cannabis in 2019, prices remained high in the state.
According to an annual report on recreational cannabis released earlier this month, the Oregon Liquor Control Commission highlighted this issue and analyzed prices as reported in Willamette Week. Although processors bought cannabis in order to make edibles, oils and extracts, and other cannabis prices and this brought prices down a bit, store-bought cannabis is still pricey.
“Oregon farmers produced another bumper crop in 2019, their biggest ever. That would seem to put downward price pressure on a market that has been massively over-supplied,” the report said. “Previous large crops caused wholesale prices to crash from $1,700 a pound in mid-2017 to $650 a pound in April 2019. But strong demand from processors—who use cannabis to make edibles and oils—led to a rally in the second half of 2019, boosting prices back to $1,200 a pound.”
While retail prices haven’t reached such a high increase, edibles and oils are currently staying on shelves because they are more expensive. This has led to oversupply from raw to finished product and means people aren’t buying up pricey extracts quickly enough.
The report concludes that “even though demand is increasing significantly, it may still be consuming prior years’ supply of extracts and concentrates, and more time is needed to reduce ‘back stock’ of inventories.” In other words, there needs to be a way to go through these existing products before things can level out.
Oregon has seen healthy cannabis sales in the industry, especially along the Oregon-Idaho border. Universities in Oregon have also received a portion of revenue to study hemp production. It will take some time to sort out Oregon’s overabundance of cannabis products but predictions believe the state will continue to be profitable.