One Consequence of Cannabis Legalization is Market Saturation

Photo by Alex Milan Tracy/AP

In the same way resin gums up your bong stem, an overabundance of quality cannabis has gummed up Oregon’s marijuana economy. For Willamette Week, Katie Shepherd and Matt Stangel examine this young hot industry’s newfound problem: too much weed, man. The Oregon Liquor and Cannabis Commission cannot limit the number of operating licenses it provides to growers and dispensaries, and yet, in the summer of 2018, Oregon’s cannabis growers will double. Who the hell is going to smoke / vape / eat / illegally transport all of this weed? In the meantime, the glut has forced dispensaries to sell grams at unsustainably low prices, and hardworking growers are gauging if and when they’ll have to switch to other crops. The frontier has taken a new form out West.

This month, WW spoke to two dozen people across Oregon’s cannabis industry. They describe a bleak scene: Small businesses laying off employees and shrinking operations. Farms shuttering. People losing their life’s savings are unable to declare bankruptcy because marijuana is still a federally scheduled narcotic.

To be sure, every new market creates winners and losers. But the glut of legal weed places Oregon’s young industry in a precarious position, and could swiftly reshape it.

Oregon’s wineries, breweries and distilleries have experienced some of the same kind of shakeout over time. But the time table is faster with pot: For many businesses, it’s boom to bust within months.

Mom-and-pop farms are accepting low-ball offers to sell to out-of-state investors, and what was once a diverse—and local—market is increasingly owned by a few big players. And frantic growers face an even greater temptation to illegally leak excess grass across state lines—and into the cross hairs of U.S. Attorney General Jeff Sessions’ Justice Department.

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