Oregon’s cannabis industry is in crisis as a record-breaking harvest in 2024 exacerbates an already severe oversupply problem.
While consumers are benefiting from historically low prices, independent growers, manufacturers, and retailers are struggling to stay afloat as demand remains stagnant.
According to a recent report from the Oregon Liquor and Cannabis Commission (OLCC), the state’s cannabis market produced an unprecedented 12.3m pounds of cannabis last year, marking a 28% increase on 2023.
This production surge was driven by ideal growing conditions in Southern Oregon during the year, in turn seeing retail prices drop to an all-time low of just $3.51 a gram as of December 2024.
Meanwhile, total sales for the year remained flat at around $960m, suggesting that demand has plateaued and cannot keep pace with the spike in supply.
As such, the OLCC estimates that just 57% of supply met actual consumer demand, meaning there is nearly double the amount of cannabis available compared to what is being bought.
Oregon’s cannabis market has faced persistent overproduction issues since recreational legalization in 2014. To address this, lawmakers implemented a moratorium on new cultivation and retail licenses in 2019, hoping to curb supply.
However, these measures have proven insufficient, as excess inventory continues to drive down prices and squeeze businesses’ already razor-thin margins.
With product piling up and no new markets to sell to, some manufacturers are looking to offload surplus cannabis out of state illegally just to cover their costs, despite the risks.
Others are simply exiting the market entirely, selling their licenses to the highest bidder, as tangible assets like growing equipment and real estate lose their value in a market saturated with supply.
Many industry experts believe federal legalization or rescheduling could help alleviate Oregon’s cannabis crisis by opening the door to interstate commerce, allowing surplus product to be sold to states with limited supply.
Without intervention, the coming months could see widespread business closures, layoffs, and economic losses, hopefully highlighting the need among the new administration for an overhaul of federal regulation.
