Oregon’s recreational cannabis industry is at its “weakest” economy since the legal market began in 2016. According to a new report released by state regulators.
A report released last week by the Oregon Liquor and Cannabis Commission found that after 2020’s “banner sales year,” the state’s cannabis growers “entered 2021 with enthusiasm, optimism about the future of the market, and planted made the decision,” he said. according to. “
“However, demand declined as 2021 progressed, exacerbated by a record outdoor harvest in October 2021, driving prices down and putting pressure across the supply chain in 2022,” the report said. the book says. “Oversupply in 2021-2022 has resulted in historically low wholesale and retail prices for both usable marijuana and concentrate/extract products. combined with a slowdown in sales, led to the first-ever decline in annual revenue (from $1.2 billion in 2021 to $994 million in 2022).
According to the report, a combination of oversupply and declining demand has put Oregon’s recreational cannabis market in perhaps its most volatile state since it began operations nearly seven years ago.
“Prior market cycles have been fueled by significant year-on-year increases in consumer demand, and Oregon’s recreational marijuana market has successfully transitioned most of the state’s consumers to the legal market. However, the recreational marijuana market in Oregon is arguably in its weakest economic condition since the program began in 2016 due to reduced demand growth in Oregon, a production cycle that lags behind market signals. Yes, and we are increasing our stockpiles,” the report said.
The post-pandemic drop in sales has become a troubling trend for Oregon’s cannabis growers.
Last fall, the state’s Liquor and Cannabis Commission sounded the alarm on Oregon’s year-over-year sales, noting that October 2022 sales were down about $15 million from October 2021.
In the commission’s latest report, released last week, the regulator said:[m]Market trends on the demand side also point to a turbulent 2023. ”
“Overall, consumer demand in 2021 and beyond has been weaker than in previous years, with a notable downshift in the demand trendline. Away from usable marijuana: Over the past few years, OLCC processors have proven themselves to be a “safety net” for producers by purchasing bulk usable marijuana and providing producers with additional outlets for their products. “But much like usable marijuana inventories, concentrate and extract inventories are at all-time highs, making processors less likely to rely on growers for newer inventories than they used to.” This is also a time when consumers are shifting to other product types (particularly edibles) and away from legal marijuana, all of which are pointing in the same direction: legal marijuana sales. There will be fewer stores and lower prices for licensees.”
The commission said the state’s recreational cannabis market is “proving to be resilient … Two fundamental facts remain unchanged until the federal government takes action and reschedules the pot.” said. ,” according to the report.
“Oregon’s highly competitive market is characterized by low prices for consumers, positioning the state’s legal market to compete well with the illegal market. Commodity prices are forcing companies to operate under low margins and extreme pressure.These tight margins, and the ability of Oregon cannabis businesses to operate under “Even if you enter, you still won’t see it,” the report said.