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Oregon’s Marijuana Oversupply Problem: What You Should Know

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The law of supply is very simple; it states that as price goes up. The quantity supplied also goes up. If the supply exceeds demand, prices will fall and suppliers will lose money. That’s exactly what’s happening in Oregon and authorities are worried.

The OLCC (Oregon Control Commission) recently introduced rules aimed at solving the overproduction issue, we speculate that these rules are a response to concerns expressed by our resident caveman Jeff sessions and Oregon US attorney Billy Williams. The rules come with a temporary purchase limit rule that will expire (six months) but the harvest notification rule is permanent.

Why Did This Happen?

By the end of 2017, the OLCC reports that the number of grow licenses pending and issued was more than 1,000. That indicates that there was an increase in the number of growers in the state. Earlier this year, state officials announced that more than 1 million pounds of cannabis flower were logged in the state’s database. Here is the thing, last year the amount of legal cannabis consumed in the state was less than 340,000 pounds.

In Oregon the law allows some people to grow marijuana outdoors. If you have ever tried growing marijuana you know that weed grows better outdoors. According to experts, the huge number of farmers growing weed outdoors both legally and illegally contributed to a flood of supply. The effect that had was, marijuana prices started to fall. Today the average retail price for recreational marijuana is less than $6, down from $10 last year.

In simple terms, farmers in Oregon are growing more weed than is needed in the state. You must be thinking, “Why can’t they sell to other states?” under federal law, it is a felony to cross state lines with marijuana, meaning, if you are caught transporting marijuana to a different state you may face federal charges.

What are Farmers Doing?

Growing marijuana is expensive, if the retail prices are too low it means that you have to sell a lot of weed to make a profit. That’s a problem in that you and a lot of other people are trying to do the same thing. If one supplier decides to cut the price of his or her product, others will follow and the prices will plummet. The thing is. the competitive marketplace determines the retail price of weed, meaning if there is too much weed on the streets very few people truly profit.

Some farmers have decided to start to growing hemp, the question is why?

In Oregon hemp is considered a crop, meaning, cultivation is protected by Oregon’s “right to farm laws”. Because of that, it is very easy to get a license. All you have to do is pay $1,300 grower or handler fee and fill out this form.

Hemp is a variety of cannabis sativa plant species that is grown specifically for its fiber, the reason for that is. Unlike sativa and Indica strains, hemp contains less than 0.3% or less of THC meaning if you smoke it you won’t get high. Also, hemp has higher levels of CBD thus it can be used to make CBD oil.

Believe it or not, selling CBD oil is more profitable than selling weed. Why? CBD oil won’t get you high and it is legal to buy or sell CBD oil in almost all states including Texas. Look at it this way; some farmers make more than $100,000 per acre growing hemp.

Right now not many people are paying attention to hemp, because of that, this is still a market that you can exploit.

The point is if you are a marijuana grower in Oregon and are currently struggling to make a profit. You should consider growing hemp or selling CBD products.

Oregon Recreational Marijuana FAQs

man dabbing

How Many Plants Can I Grow?

If you are over 21, Oregon law allows you to grow up to four plants per household (regardless of how many people live in the residence) that must be kept out of public view (includes outdoor grows). If you are caught growing more than four plants, you could face prison time or fines up to $125,000.

How Much Weed Can I Have?

  • 8 ounces of dried cannabis flowers or leaves
  • 16 ounces of a cannabinoid product in solid form
  • Ten seeds
  • 1 ounce of dried marijuana flowers or leaves in public place.

Medical Marijuana: What are The Limits?

If you are growing weed for personal use in Oregon at home, you are allowed to:

  • Posses a total of six mature plants and a dozen immature pants.
  • Residents may have no more than a dozen mature plants and two dozen immature plants.

Two Things You Should Know Before Starting a Marijuana Business in Oregon

The Barriers to Entry are Pretty Low

In 2016, Oregon opened up its cannabis industry to non-residents. To enter the industry, the law only requires you to be 21, pay an annual license fee, and pass a criminal background check.

Zoning Laws

Before you pick a location for your marijuana business in Oregon, it is important to work with your local government directly. The thing is Municipalities have the ability to adopt restrictions regarding time, place and manner. Meaning, if you don’t do your homework, your license application may be denied.

 

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