PORTLAND, Ore. (KOIN) — The Oregon Liquor and Cannabis Commission shared its 2023 Recreational Marijuana Supply and Demand Legislative Report, which indicates that the state’s cannabis supply is surpassing the demand for yet another year.
OLCC releases this report to the Oregon legislature every other year to show the state of the recreational marijuana market, a market that the commission said “is in arguably the weakest economic position it has been in since the inception of the program in 2016.”
According to OLCC, market demand was 63% of supply in 2022, compared to 52% of supply in 2021. This improvement in supply-demand equilibrium happened not because of a growth in consumer interest, but due to OLCC producers’ self-correcting the number of crops planted last year.
The agency reported that even with local producers slowing cultivation so that Oregon’s cannabis industry doesn’t continue to see a decline in prices, the abundance of usable marijuana inventory from prior years could signal a persisting problem.
In November 2022, OLCC’s Mark Pettinger told KOIN 6 that cannabis sales saw a spike during the height of the pandemic when consumers had fewer options on how to spend their discretionary income. Now, some of those same consumers could be looking for ways to save their money with a higher cost of living.
Pettinger added that the cannabis production cycle struggles to keep up with market signals, making it that much harder for Oregon’s marijuana industry to recover.
“It’s because about 85% of the crop is grown outdoors, comes down in October during harvest time, but planting planning is made the following April — which there really hasn’t been enough time to really gauge how the harvest from the previous fall is impacting the market,” Pettinger said.
The market’s challenges have been exacerbated by consumer trends as well. Many cannabis consumers are moving away from smokable marijuana and toward other products like edibles, according to OLCC’s report.
Pettinger said that edibles could be the preferred product among some cannabis users because of its more attractive price point. Back in 2017, nonprofit research institute RTI International also reported that edibles were favored by some consumers because of their convenience and because they don’t produce smoke.
Regardless of why consumers are moving away from usable marijuana and how cultivators are responding to these market changes, Oregon legislators may need to make some changes if they want to see the resurgence of the state’s once-booming cannabis market.
“We will look to the Governor and Legislature during the 2023 legislative session for direction on how to further strengthen our regulated marijuana system by providing stability to the industry, maintaining our obligations to keep our communities and the public safe and secure, and fulfilling our consumer protection responsibility to Oregon’s cannabis users,” former OLCC Executive Director Steve Marks said in a letter to Oregon lawmakers before resigning.
Spokesperson Pettinger said that the federal legal landscape could help Oregon’s cannabis industry by rescheduling marijuana from a Schedule I substance, allowing cannabis business owners to deduct business expenses and offering SAFE banking options.