Oregon’s pot problems have gone from bad to worse. According to one estimate, Oregon has so much marijuana supply it would take more than six years to consume it all – whether smoking or eating it.
The northwestern state is looking to pass a bill that would effectively give the Oregon Liquor Control Commission (OLCC) new powers to be able to deny growing licenses if it finds there is not enough demand. Currently, there is no cap on the amount of licenses issued in the state, which is making the oversupply problem worse when every new producer is granted access to grow pot.
Supply is already estimated at being double what demand is, and so the surplus of marijuana is only continuing to grow.
The excess in supply and increased competition has forced state producers to sell their products at deep discounts. While its great news for consumers looking to score some cheap pot, it isn’t good for business and continued number of companies have been forced to close up shop.
Serious risks for cannabis producers if bill isn’t passed
Another bleak factor with the Oregon weed glut is how struggling state producers cannot file for bankruptcy because it is still illegal federally. The consequences could be dire for cannabis producers that become insolvent, especially for those that have taken out personal loans.
One marijuana grower outlined a not-so-pretty picture of what could happen to producers within the State:
“When we go out of business, we’re going to go down hard. Many of us will lose our homes. … You’re going to have a lot of entrepreneurs in this state that are pretty unhappy with the way that this ends if we don’t get some support with this bill.”
— Margo Lucas, a marijuana grower and vendor in the Willamette Valley, Oregon
Currently, the state bill has passed the Senate and now needs approval from the House in order to make its way to Governor Kate Brown, who looks to be in favor of passing the legislation and understands the seriousness of the situation:
There is no short-term fix for Oregon’s oversupply and without federal legislation permitting marijuana, there’s no way for it to move supply outside its state borders. It highlights one of the big inefficiencies in the roll-out of legal cannabis and how the excitement around legalization has made some producers move too quickly making it a difficult situation for everyone involved.
Even if the bill passes and the OLCC is able to restrict new applicants from obtaining licenses, it still doesn’t solve the existing oversupply issue or boost local demand. It’ll likely take years before the problem is fixed as the probable best solution is the federal legalization of marijuana.