Mike Rogoway
02-03-2025
Oregon’s marijuana market continued to deteriorate last year, with prices falling to an all-time low even as the state’s harvest hit a record high.
It’s a chronic imbalance that only got worse last year, putting even more pressure on a struggling industry. The state’s supply of marijuana was nearly double consumer demand for the product, according to a new report from the Oregon Liquor and Cannabis Commission.
“The oversupply of usable marijuana on the market along with lower prices continues to strain marijuana businesses,” the commission wrote in its annual report on the state’s marijuana industry.
The industry’s predicament is well understood: Marijuana grows abundantly in Oregon, but the state has a relatively small population, and the federal government doesn’t allow cannabis to be sold across state lines.
Prices stay low because Oregon has a marijuana surplus every year.
Retail marijuana prices have been under $4 a gram for nearly two years, falling to an all-time low of $3.51 in December. But growers produced a banner harvest last year of 12.3 million pounds — up 28% from 2023.
“The success of the 2024 harvest can be attributed to the ideal growing conditions in Southern Oregon, where there was minimal fire activity and precipitation started later in the season, along with higher rates of harvest activity by licensed producers,” the OLCC found.
Because demand is flat — total Oregon sales were little changed last year, at $960 million — more marijuana means more problems for the industry.
“The 2024 harvest indicates there will be larger inventory stockpiles in the system going forward, putting more downward pressure on prices and delaying revenue for marijuana businesses,” the OLCC wrote.
Oregon began limiting the number of licenses to growers in 2019, then to retailers three years later. While moratoriums have stopped the industry from adding new players, they haven’t corrected the existing imbalance between supply and demand.
From the time Oregon voters legalized recreational marijuana in 2014, industry advocates have looked toward a time when the federal government might legalize marijuana — or at least authorize interstate shipments between states where cannabis is legal.
That hasn’t happened, and there appears little chance the Trump administration or Republican-controlled Congress will pursue such changes. That means Oregon’s marijuana industry will remain in a tight squeeze indefinitely.
“Until the federal government creates pathways to interstate commerce, the Oregon recreational marijuana market will be characterized by variations on the same theme: a competitive marketplace that features low prices for consumers but low margins for businesses,” according to the OLCC.
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