Oregon’s recreational cannabis market was further impacted in 2024 by the fact that prices fell to all-time lows while harvests reached a new high. This is according to state data.
Oregon Liquor and Cannabis Commission reports that the median price per grain dropped in December to $3.51. This is the lowest it has been since Oregon began keeping track of prices. In 2024 growers produced 12.3 millions pounds of marijuana, an increase of 28% from the prior year.
In its first annual report published by The Oregonian
A fundamental mismatch exists between demand and supply. This is the root cause of market struggles. Oregon’s production capacity increased, but consumer demand was relatively unchanged. Commission data indicated that total sales would reach $960 million by 2024.
Regulators attribute the bumper crop “to ideal growing conditions in south Oregon, where the fire activity in that area was minimal and the precipitation began later in the year,” along with an increase in harvest activity by licensed producers.
And without being able to move cannabis between states, Oregon producers are only able to serve the relatively small state population, the report says.
According to the assessment of the Oregon Recreational Marijuana Commission, “until the federal government opens up interstate commerce to Oregon’s recreational marijuana industry, it will continue to be marked by the same themes: low prices and low profit margins.
State lawmakers passed legislation last year that imposes a strict licensing limit, which will go into effect in the next month. The new rules tie cannabis business permits to population ratios – requiring 7,500 residents per retail or producer license and 12,500 residents for each processor and wholesale permit.
Mark Pettinger was a spokesperson for the commission at the time. He said that the growth in population could take several decades to justify new licenses. The number of active state cannabis businesses already exceeds caps. While the Cannabis Industry Alliance of Oregon stated that restrictions would not fix the issue of oversupply immediately, they will help to reduce it. GMR The caps are designed to prevent the market from further deteriorating.
This legislation allows license holders who already hold a license to transfer their ownership and renew the permit. According to industry experts, this could create a secondary market in which marijuana licenses can be sold.
It is possible that official figures may actually underestimate the magnitude of the decline in prices. There are some Oregon dispensaries that advertise ounces for $10-12 or less, which is below the state median price.
Oregon’s problems can be traced back to the initial licensing policy that was adopted when it began recreational sales. The permissive structure, which was designed to attract a wide range of industry participants, led today’s oversaturated marketplace, in which both new and established businesses are struggling with razor thin margins.
The Portland Cannabis Market (formerly known as “the Costco for cannabis”), which had a 10,000-pound inventory of wholesale marijuana, closed last week after repeated thefts cost $1.5M in damages, reported Portland television station KGW.