Oversupply in Oregon

[dropcap class=”kp-dropcap”]I[/dropcap]f you’re looking for some cannabis in Oregon, you don’t have to look far. Currently, the state has about six-and-a-half years’ worth of retail cannabis product to meet the current demand, and this oversupply issue has caused a whole slew of problems.

The average price per gram has decreased from $14 in 2015 to under $7 by the end of 2017. It’s even common to find cannabis for $3 per gram in Oregon. The state also continues to struggle with a thriving black market, and Oregon cannabis is being shipped to states where prohibition still exists. While consumers might enjoy the low cost and abundance, producers and regulators are feeling the squeeze.

In an effort to curb the black market and help create a more sustainable cannabis market in Oregon, legislators put forth two senate bills. The first bill, Senate Bill 218, would put a cap on cannabis production licenses. The bill states that it would “Authorize Oregon Liquor Control Commission to refuse to issue initial marijuana production licenses based on supply of and demand for marijuana.”

Sen. Michael Dembrow, the bill’s sponsor, explained his support for the bill in a statement. “We currently have a flood of cannabis production happening in our state,” said Sen. Dembrow. “There is a ‘Green Rush’ happening in our state right now and, while we support a healthy and thriving new cannabis industry, the oversupply has caused plummeting product costs. Much of the product created by this oversupply is going into the illicit market that legalized cannabis was intended to curb. This bill actually will protect the existing legal market.”

“There is a ‘Green Rush’ happening in our state right now and, while we support a healthy and thriving new cannabis industry, the oversupply has caused plummeting product costs.”

Oregon cannabis producers also expressed support for the legislation. “As a leader in the cannabis industry, we at Grown Rogue take seriously our role and responsibility in not only creating a safe and well-regulated industry that Oregonians can trust and support,” Obie Strickler, Grown Rogue CEO stated in the bill. “We also feel strongly about our role in helping shape an industry that is financially healthy; one that benefits our state and provides all citizens the opportunity for financial success in the cannabis industry.”

Unfortunately, the bill failed on April 10 with 13 ayes and 17 nays. However, the motion to reconsider the bill was carried with 29 ayes and one nay. “Its failure on the floor was unexpected, but not a final barrier to passage,” Sen. Dembrow told CULTURE in mid-April. “We expect the bill to be amended slightly sometime in the next week or so in the Rules Committee to fix some technical elements and then go back out to the floor, where I believe we have the votes to pass it.”

Another bill legislators have put forth to help curb the cannabis oversupply issue is Senate Bill 582. SB-582 “Authorizes Governor to enter into agreement with another state for purpose of cross-jurisdictional coordination and enforcement of marijuana-related businesses.” Sen. Floyd Prozanski, one of the bill’s chief sponsors, told CULTURE about his support of the bill, and how it relates to the Cole Memo. “What we’re attempting to do is set up a process that will allow for Oregon to move product from Oregon to other states that allow for cannabis,” Prozanski stated over the phone.

As it stands, the fate of SB-582 will depend on communication from the federal government, likely U.S. Attorney General Barr, so that interstate cannabis trade would be permitted and in accordance with federal law. If this happens, it will put Oregon in a unique and enviable position.