The state of the cannabis industry in Oregon is experiencing growing pains at the moment. Oregon launched its recreational cannabis market with unlimited licensing at a reasonable cost, compared with other states. Right now, we are seeing the results of too many grow licenses in a small market, under federal prohibition that doesn’t allow us to share any of this cannabis with other legalized states.
The result is a 2017 outdoor harvest that has sent prices plummeting, putting many farmers at risk. Some farmers are selling product at below their break-even price or storing it in hopes the market will stabilize. Most are selling more than they would like to processors for extraction, since there is not a market for all of the flower.
As the sun sets on another harvest at Alter Farms, plans are in the works to prepare for upcoming changes to state and local laws in Oregon. Photo by Jason Rambo.
Plus, it is the stated policy of OLCC to decrease canopy sizes based on market demand for already-licensed producers, while still continuing to issue new licenses.
All of that us leading to trying times with large employee layoffs statewide and many companies unable to continue operations. And even that is more expensive for a cannabis company as federal courts have ruled that they cannot enforce the protection of the Bankruptcy code to debtors in the cannabis industry.
Here at Alter Farms we’re in the midst of implementing our own restructured operations to successfully survive the rumored million-pound surplus. Another season with more licensees online (1,819 pending producer applications as of Dec. 7, 2017) and even more production will almost certainly be the end to a large majority of farms.
But this ever-changing landscape and current climate is no surprise; all these issues have been brewing in the pipelines for a very long time.
Southern Oregon and northern California have long held the reputation for producing the best outdoor cannabis in the world. However, with overproduction and plummeting prices, the ability to maintain quality will surely decrease; increasing the probability of sungrown cannabis holding value only in the supply chain of the infused and extracted products.
Unfortunately, Oregon by itself is a small economy and there just isn’t enough demand here to accommodate the amount of cannabis we are producing under the current licensing system. We need the federal walls to come down so we may share this bounty with cannabis lovers across the country and around the world.
In the meantime, if the state has any desire to keep the locally owned industry thriving or to take action to mediate the elephant in the room; the time to do so was yesterday. However, we remain hopeful that Oregon begins properly planning for the future of cannabis, supporting our region’s well-deserved reputation, and continue supporting Oregonians love of all things craft!