January 02, 2018 | NORTHWEST LEAF
By Matthew Meyers-a Cannabis journalist, activist and frequent contributor to Oregon Leaf, based in Hood River.
As 2017 comes to an end, we get the chance to look back at the first year of fully recreational Cannabis in Oregon. It’s been one hell of a year with a lot of learning for all parties involved! This year also marked the first year to permit a complete season of outdoor cultivation; this in turn led to concerns about a surplus of Cannabis in the market. You’ve probably seen numbers like 1 million pounds grown, circulating around social media, with demand from dispensaries only totaling closer to 400,000 pounds. Since those numbers were published, the supply side pushed closer to 1.5 million pounds. It’s hard to get solid data because the numbers are constantly shifting, but it’s clear that supply outweighs demand. Only time will tell if this surplus is a natural phenomenon, occurring every time the outdoor harvest comes in, or if this represents a trend of general surplus which will bring in a long-term price decrease. The latter happened to legal markets in Colorado and Washington.
Recently a large uptick in the number of licensed producers in Oregon has led to speculation that supply would increase significantly; as of publishing of October data, there is little evidence to suggest that a surplus of supply has yet disrupted the market, according to Casey at BDS Analytical. From September to October, sales declined 7 percent and average retail prices declined 3 percent, but similar dynamics tend to be the norm in the fall around harvest season. From the time a producer license is issued to whenflower is harvested, processed, and delivered to retail could be at minimum four to six months for product coming from indoor grows, and a whole year from outdoor. We will have to wait and see the full impact that increased supply will have on Oregon’s market, but if Colorado or Washington are any indication, prices in Oregon have a long way to fall, and in doing so, the market will grow significantly.”
As a community we need to progress our production strategy for this new recreational system. In a limited buyer market, it’s not about growing as many pounds as possible now. It appears that there is a chance growers created too large of a production surplus for dispensaries to handle. Hopefully our regulations progress with a perspective that cultivates small business competition and doesn’t unfairly favor the largest players in the market. If there was a license cap then we could be worried about a supply shortage or about how certain farms didn’t get licensed. With the path that Oregon took it’s the market that gets to decide and luckily we are all a part of that market as consumers and patients. As long as we all continue to listen, learn and actively participate we can make the market more sustainable for everyone.
We also need to focus on federal change so that eventually overproduction can be legally exported to other states with functioning recreational and medical markets. It might be a while until this idea is accepted into the mainstream and passed through the federal government but I think it’s important to keep in mind there is nothing inherently evil about taking Cannabis from state to state, just an imposed law of man based on control and division. There is no reason states shouldn’t arrange shipments between state tracking systems, aside from politics and deep-seeded propaganda against the plant and all the money and power that those two combined generate.
The key for producers in my mind is to focus on quality over quantity; premium products are less susceptible to fluctuations of surplus and price. A great example is the craft brewing industry in Oregon. They shifted the paradigm toward quality and took the time to help educate consumers about premium products. Even though the regulatory framework and product is different, our industry could learn a lot from this example.
It’s imperative that we create a legal avenue for consumption lounges and Cannabis events. There is no better way to educate patients and consumers about your product than to share it directly with consumers at an event. I hope to see strong legislation that supports permitting Cannabis events and lounges in the 2018 session. If you haven’t already, take a couple minutes to reach out to your representatives and let them know it’s an issue they need to address.
The biggest upside of this supply situation is that additional material on the market will hopefully lead to more competitive pricing on concentrates, edibles and other secondary products. Hopefully this can help Oregon be more competitive with the pricing in Washington.