There’s Too Much Marijuana in Oregon

Marijuana prices are reaching historic-lows in Oregon.

The average price of a gram of marijuana has dropped 50%  in Oregon, going from $14 in 2015 to only $7 in 2017-2018.  Oregon’s U.S. Attorney Billy Williams voiced his frustration over the matter in a recent statement he released.

“In my view, and frankly in the view of those in the industry that I’ve heard from, it’s a failing of the state for not stepping back and taking a look at where this industry is at following legalization,” said Williams in an interview with the AP.

“What is often lost in this discussion is the link between marijuana and serious, interstate criminal activity,” Williams added. “Overproduction is rampant and the illegal transport of product out of state — a violation of both state and federal law — continues unchecked. My ask continues to be for transparency, responsible regulation, adequate funding, and a willingness to work together. It’s time for the state to wake up, slow down, and address these issues in a responsible and thoughtful manner.”

Fortunately, solutions are being proposed by State officials.

A couple of solutions have been suggested by Oregon State Senate Democratic Leader, Ginny Burdick, such as capping the total number of available cannabis licenses, additional support for law enforcement, and removing cannabis from the federal Controlled Substances Act.

The removal of cannabis from the Act would allow legal transportation of pot from one legal state to another. It would also allow cannabis businesses to access banking services and stop the current “cash-only” issues.

Challenges can be addressed and resolved with proper procedure.

Unfortunately, many of these supply and pricing issues simply can’t be resolved until the state walls come down and interstate selling is allowed.  In the meantime, prices remain very high on the East Coast, and so a grower in Oregon is faced with the hard choice of staying legal, and potentially going out of business, or selling into the black market.   Many are trying very hard, and raising more capital, but it will be a test of “survival of the fittest” to stay capitalized and in business until the legal landscape changes.

While there are certainly lots of challenges in the cannabis industry, many can be overcome with proper accounting and compliance practices. Dope CFO is aware of these issues, and will help make sure that your business is in a position to get through the good times and the bad times. Over-production isn’t a new phenomena unfortunately, it just takes careful planning and awareness of how the market is fluctuating so that your business isn’t caught off-guard by situations like this. To learn more on how you can become an expert in this field and serve cannabis companies, make sure you download our free guide “Accountant's Guide to Managing Your Client's Cannabis Accounting Needs”.