It appears that Oregon has successfully emerged from what the Oregon Liquor Control Commission (OLCC) described as six years of oversupply in the 2019 Recreational Marijuana Supply and Demand Legislative Report published in January. (PDF) But according to business-to-business software company Confident Cannabis, the Oregon oversupply problem was never that dramatic to begin with.
In May, Confident Cannabis had the opportunity to meet with hundreds of cannabis buyers and leading producers across Oregon during the three-day Cultivation Classic event in Portland. The company observed a spirit of cautious optimism in the state, with some operators ceasing production while others found increasingly secure footing in the industry. The consensus, according to the company’s May 28, 2019 Oregon Market Report, was that “the worst of the oversupply problems and low prices are behind us as the Oregon market seems to be turning a corner.” But now, Confident Cannabis believes the so-called oversupply problem wasn’t a major issue in the first place.
Confident Cannabis VP of Marketing Brad Bogus says that pound for pound, “Oregon produces, quite simply, the best cannabis in the world” and that “the story that’s being told is not reflective of the story that’s being experienced.” That’s because the OLCC report used what Bogus describes as “flawed methodology” involving calculations based on wet weight, which he says shouldn’t be used to calculate supply. As a result, inaccurate assumptions “ended up putting the market completely in flux” by leading consumers to believe that the Oregon products were sub-par, when Bogus says the opposite is true. If consumers think they’re buying stale cannabis, they won’t continue to buy from Oregon and according to Bogus, “The loss would be too much to bear.”
The company’s May report claims Oregon buyers had actually reported being out of stock on outdoor flower, due in part to the larger market for pre-rolls and other manufactured products, along with reductions in harvests for 2018. Meanwhile, the demand for greenhouse and indoor flower meant comparatively robust supplies. According to Confident Cannabis, the price of Oregon outdoor flower had been growing from $300 a pound to $600 a pound in May, while prices for greenhouse and indoor flower was increasing from $500 a pound to upwards of $800 a pound.
“Prices for flower continue to increase,” Confident Cannabis states in their July, 2019 Oregon Market Report. “$500 pounds are now almost as mythical as unicorns. They’re said to exist but they are very hard to find.” Consequently, indoor flower from Oregon now ranges from $1000 to upwards of $2000, while outdoor and greenhouse flower ranges from $700 to $900.
However, the July report claims prices of concentrates appear to be falling. “This might be related to rising flower prices,” it states. “When the $500 pounds were available at cheap prices, concentrate manufacturers were able to buy in bulk and produce a large amount of products. Depending on how this product flows into the market, all at once or in small batches, will affect the future distillate pricing.”
Either way, it’s safe to say that the Oregon market is prospering. “While the market still isn’t stable, it’s doing something even better,” reads Confident Cannabis’s most recent report. “It’s growing in value.”