The Oregon recreational cannabis market is “in arguably the weakest economic position it has been in
since the inception of the program,” according to a new report from the Oregon Liquor and Cannabis Commission.
The 2023 Recreational Marijuana Supply and Demand Legislative Report states that the Oregon market is suffering from a decrease in the growth of demand, a production cycle that responds to market signals on a lag and increasing stockpiles of inventory resulting in historically low wholesale and retail prices.
According to the report, the “banner sales year” of 2020 led producers to increase their plantings, but declining demand and a record outdoor harvest in October 2021 led to the slide in prices, contributing to the state’s first-ever decrease in annual sales, from $1.2 billion in 2021 to $994 million in 2022. Monthly sales peaked in April 2021 and each consecutive month since August 2021 has seen a year-over-year decline.
The report notes that market demand was 52% of supply in 2021 and 63% in 2022, mostly due to a “self-correction” in annual production, but it also notes that the declining prices at wholesale and retail are due in part to large stocks of leftover inventory, which is likely to continue the downward trend in pricing.
The report also points to a potentially “turbulent” 2023 for the state’s industry, with demand for flower continuing to decline while consumers look to other forms, like edibles. However, the report also cites “positive signs” for a better sales year but notes that while 2023 may be better than 2022, it will “almost certainly not be an improvement over 2020.”
“Oregon’s recreational marijuana market has proven resilient, but until the federal legal landscape
changes, two fundamental facts remain unchanged: in-state supply is boundless, while in-state demand
can only grow so much,” states the report.
— Brian Beckley