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Oregon’s Cannabis Crisis

Oversupply and falling prices pushes once booming weed industry to the brink.




Portland Oregon’s skyline. PHOTO COURTESY BY M.O. STEPHENS

Oregon’s cannabis economy, once thriving, is now facing a crisis due to oversupply and falling prices.

When marijuana was legalized in the state a decade ago, many saw an opportunity for profit and entered the industry. However, Oregon did not impose limits on the number of marijuana shops or growers, leading to an excess of cannabis that residents could not consume. As a result, retail prices dropped significantly, while taxes and regulatory compliance costs remained high, reports Oregon Live.

Retail sales in the cannabis industry, which previously saw double-digit growth, have plateaued and then declined by 16% last year and another 8% this year.

“The cannabis industry is about to crumble,” Hunter Neubauer, president of the Oregon Cannabis Association board, to Oregon Live.

The oversupply problem has caused major challenges for industry pioneers and small businesses. Industry giants are abandoning their investments in Oregon, unable to make the numbers work, with small independent shops amongst the hardest hit.

To alleviate the economic pressure, industry experts propose reduced regulations and more state support. However, any structural fixes risk causing more pain to struggling businesses in the short term.


Efforts to address the issue include reducing testing and security protocols, expanding cash payment options for taxes, and marketing campaigns to promote Oregon cannabis. Some even suggest limiting the number of licenses or allowing struggling operators to sell their businesses. However, as Global Cannabis Times reported June 4, even as cannabis businesses are grappling with tax payment difficulties due to narrow profit margins and limited banking access, retailers in the state must adhere to new and enhanced regulations by becoming tax compliant or forfeiting their business licenses.



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