Doesn’t seem like we can find the bottom of this deflation on marijuana prices.
Over the past several months, the oversupply issue in the marijuana industry has begun to crater the prices growers are able to get when selling their product. Along with California, Oregon is at the forefront of business in the west, and with a smaller population, we’re seeing the effects hit this state hardest.
In February, the median price of a gram of marijuana at a retailer dropped down to $4, a record low. That’s 16% down from February 2022.
On the wholesale side, median price of a pound was at $550 (which is $1.21 per gram) in December. But as a silverlining, this price actually went up slightly to $599 in February. The good news stops there unfortunately, since this is a 25% drop from prices a year ago.
This is all a correction. The excitement around legal marijuana was (and still is) so huge that many people got into the business looking for a surefire way to make cash. The problem is now, according to the Oregon Liquor and Cannabis Commission, demand for marijuana is just 63% of the supply.
“Declining wholesale and retail prices for usable marijuana are due to large stocks of usable marijuana inventory leftover from previous years, which is likely to continue to put downward pressure on prices,” stated the OLCC’s report.
There is simply much more weed out there than anyone can bother with, and that’s hurting the business at every angle. Because of this, companies like Curaleaf are leaving the state of Oregon.
As an ominous warning, the OLCC’s report contains this statement: “[The cannabis 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.”