In other industries that headline would spell doom like Forbes writing yet another post about Apple lacking innovation. In the cannabis sector, most of us can only envy the state of Oregon and its particular situation because we don’t yet benefit legal marijuana.
Cannabis in Oregon has its own struggles and according to a recent study by the Oregon Liquor Control Commission, the state is overstocked with sufficient supply for the next six and a half years.
When keeping in mind still pending producer licenses for this year, the state is on track to double its output, which already is at more than double the demand as per the study.
This particular situation is because licensed outlets provide only slightly more than half of the actually used marijuana, the other coming from homegrowing, medical marijuana, and also the black market.
Cultivators now have called for new measures and are hoping to export their oversupply to other legal states.
A previous study, mid last year, found that even more — almost 70% — of the production wasn’t sold legally. Much of it was trashed but the Oregon-Idaho High Intensity Drug Trafficking Area Program also states that much of the unsold marijuana may end up on the black market.
“What is often lost in this discussion is the link between marijuana and serious, interstate criminal activity. Overproduction is rampant, and the illegal transport of product out-of-state — a violation of both state and federal law — continues unchecked. It’s time for the state to wake up, slow down and address these issues in a responsible and thoughtful manner.”
—Billy Williams, U.S. Attorney for Oregon, speaking to the AP.
Lobbying legislators the cultivators want to see a new bill which will allow the state to enter in agreements with other legal states, allowing export of their overproduction. Oregon state Senator Floyd Prozanski introduced a bill allowing that at the beginning of the year.
Despite opening up the market and letting the market organically decide over both prices and production levels being the obvious solution, another side has formed and Gov. Kate Brown has has submitted a bill which would limit the number of licenses for cultivators. A more centralized and controlled effort.
While the reason behind Brown’s bill seems simple, personally we prefer the principles of free market and also believe that a free market will result in both better quality and lower shelf price for the customer. Which is probably the only road to cut out the black market long ter. And, of course, lower taxes on retail and licenses.
It will be interesting to discover which path Oregon pursues: being a nationwide trailblazer by introducing a framework which allows interstate export or by limiting the opportunities in the sector and thus also employment options.
The Oregon Craft Cannabis Alliance sees only one viable solution:
“There is only one way to address this problem, and it’s to demand we get access to markets around the country.”
— Adam Smith, Craft Cannabis Alliance Director to Portland Business Journal
We see another, and a much more sensible solution even: pass sensible marijuana laws and legalize marijuana federally.