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Oregon, Flooded with Cannabis, Introduces Bill to Curb Production

By June 5, 2019 No Comments

josh-herrington-1103198-unsplashOne million pounds of unsold cannabis in a state within a market certainly 4 million people does not sound good for business. With this huge surplus, it is estimated that it would take more than 6 years for people to consume it all – and that’s if production ceased today.

“What we have is a market-access problem, and it’s a political problem,” Adam Smith, the founder and director of Craft Cannabis Alliance, said. But with the state labeling it as a production problem, the only solution is to cut production. This has seen the state and growers at odds with how to deal with the problem. Growers attribute the huge surplus in marijuana due to lack of access to other markets. Cannabis is still federally illegal in many states and transporting it over state lines is a federal crime.

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The state is now giving the Oregon Liquor Control Commission more freedom to deny new cultivation licenses based on supply and demand. The bill, which is currently at the House after passing earlier in the Senate, aims to reduce the enormous surplus. It aims to prevent unsold legal cannabis from entering the black market and block a possible crackdown by federal prosecutors.

“The harsh reality is we have too much product on the market,” said Democratic Gov. Kate Brown, who intends to sign the bill if it wins final passage as expected.

Small-time growers have already been feeling the pressure from bigger competitors and even those from out-of-state companies. The glut has even driven market prices down from $10 per gram in October 2016 to $5 per gram in December. The fact is that one kilo of cannabis just costs $7,000 in Oregon and $20,000 in New York. Just imagine the potential of sending this product across state lines.

With thousands of applications for licenses in the backburner, the state has put a curb on the application for new licenses. Small-time growers are certainly feeling the pinch. With big companies, especially those from Canada who are prepared to play a waiting game and compete with whoever is left after the storm, things are certainly not looking good for small-time cannabis farmers in Oregon.

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