The Oregon Liquor Control Commission, which oversees legal cannabis in the state, recently released data about Oregon’s marijuana market. Interestingly, the report found that supply is far outpacing demand. In fact, experts say that Oregon currently has enough weed to meet supply for the next six and a half years.
New Data on Legal Weed in Oregon
The Oregon Liquor Control Commission formally submitted the new report to state lawmakers last week. The report is intended to give officials a snapshot of key data about Oregon’s legal cannabis market.
Based on data from the last three years of legal cannabis production and the last two years of legal sales, the report highlights a number of trends. The state’s oversupply of legal marijuana is one of the most important to emerge from the data.
As summarized by The Oregonian, the state’s licensed producers grew and harvested over 2,000 metric tons of weed in 2018. That’s roughly 4.4 million pounds. And the state could be on pace to produce even more this year.
As a result of all that production, there is now more legal weed in Oregon than consumers can actually purchase and consume. Specifically, the report found that from mid-2017 to mid-2018, demand for legal weed made up only 50 percent of the state’s supply.
As things stand, the state now has enough weed in inventory to meet the demand for more than three years.
Much of this is the result of the state’s legal framework for cannabis cultivation and production. In particular, experts point to the state’s uncapped producer licenses and relatively low licensing fees as key components behind the explosion in cannabis production.
Moving forward, experts say the state has a few potential options to try and balance out supply and demand. For example, if state and federal laws permit, Oregon could look into ways to export excess product to other weed-legal states. Alternatively, the state could revise licensing laws to set new limits on how many producers get licenses.
Other Key Findings
The new report also highlighted a few other interesting trends. These include:
- Extracts and concentrates are skyrocketing in popularity. Sales of these products increased by 40 percent in the last year, from $12.5 million in 2017 to $17.5 million in 2018.
- The oversupply of weed has led to low prices. In 2016, a gram of legal weed was around $10. And in 2018, it was down to $5 per gram.
- While flower remains very popular, other products are picking up steam. In particular, extracts, concentrates, tinctures, and edibles are showing a dramatic increase in popularity.
- Legal retailers account for a little over 50 percent of all cannabis consumption in the state. That means that other sources remain very popular. These include home grows and the illegal market.
Striking the Balance Between Supply and Demand
It seems that balancing supply and demand is one of the key challenges to establishing a new legal marijuana market. As highlighted in this new data, Oregon is currently dealing with an oversaturated market.
But in other places, the opposite is happening. For example, Canada is facing a supply shortage. When weed became legal nationwide last fall, Canada saw massive demand.
So much so that stores quickly sold out and almost immediately struggled to get enough inventory from producers. Now, the country is working to increase production.