Oregon has a massive oversupply of legal cannabis
Qz.com - Sun 10 Feb 21:41 GMT

Oregon has a massive oversupply of legal cannabis

That's a lot of weed.

  In 2018, Oregon’s legal marijuana producers grew more than twice as much as was legally consumed, leading to an oversupply that has 6.5 years’ worth of cannabis, measured by the psychoactive compound THC, on the shelves at dispensaries and wholesale distributors.

  “For Oregon, producing a lot of marijuana is not new news; producing a lot of marijuana that is tracked in the legal system is,” writes Steve Marks, the commission’s executive director.

  He notes that the state has garnered $198 million in tax revenue from the first three years of its legal cannabis regime, and that only 45% of estimated Oregon cannabis use is supplied by the medical marijuana market, legal home grows, or the black market.

  But the current situation creates a “concern that [legally grown cannabis] may be diverted to the black market and/or out of state given current market conditions (high supply, falling prices, and a huge pipeline of applications for new entrants into the market),” writes Josh Lehner, an economist who works for the state government.

  For now, the Oregon oversupply is more an “indication of speculative bets and pending market corrections,” but the longer the situation continues, the more pressure there will be on cannabis startups to make money outside the legal system.