Glut of marijuana in Oregon is cautionary tale, experts say.

[Del_9_THC]

This makes sense and was predictable.

First, when a new market is opened (I.e legal market vs illegal) everyone and their dog rushes in to be the next big mogul!

So, with all the new participants it greatly increases supply.....with only a smaller increase, if any, in demand ...so....prices MUST fall.

When those with not-so-deep pockets and /or other Johnny-come-latelys run out of cash chasing smaller and smaller returns....hopefully some kind of equilibrium will occur to stabilize prices.

Just like the gold rush, a few people/companies will hit it big, with most not doing so well. But, just like the gold rush, the folks who made money were those selling the supplies (picks, tents, sluicers, tinned goods, etc.) but in this case it is those selling nutes, lights, fans, extractors etc....

Note, the prices are likely to fall not simply due to supply/demand issues, but also due to a massive decline in the risk premium required.
If no jail time or other harsh penalties then the costs of doing business go way down, so cost of production reduce....Hence, lower prices.

What bothers me is that the small time producer is going to get screwed. Often these are the folks who were activists' putting their life on the line to achieve legalization, and they get turfed by big business who were dead set against legalization and now want to cash in!
(Recall Canadian pharmacies who were totally against selling medical cannabis, but now the big market is available they say they should be the ones dispensing it....fucking bullshit!!)

 

[yesum]

I would say the problem was crazy high prices and this is the cure rather than a 'glut'. Sam said it before, you can grow good pot for about the same as tomatoes.

Pot is gonna go for more than vegetables, but it is gonna be dirt cheap compared to now. Retail and legal with all the taxes, it will still cost something but the producers will have a slim profit margin, like all legal businesses do.

Outdoor guerrilla and maybe ship it to non legal state is the future. Or be part of a large legal grow operation with a slim profit margin.

 

[moose eater]

Don't know what the wholesale production taxes are in Oregon. In Alaska the growers got high-0stakes gambled with, in what was a very generous offering to the State, that seemed to assume a static high price market in perpetuity.

Our retail taxes, assessed mostly by the municipalities, are based on percentages, so when the prices of retail canna products fall, the local retail taxes fall accordingly, as they're merely a percentage..

However, and recently catching both attention and ire, the production taxes on the licensed growers up here have been at $50/oz. That was $50 and oz whether you were selling lbs for $6,000 (and some did a while back) or $2,000/lb. or even less. $800 off the top of a lb. to the state, regardless of market value.

Apparently being reassessed now, but such agreements have always been a major risk, as they fail to flow with market value.

No telling what the outcomes would be if the wholesale value hits the tax value of $800/lb. Maybe that's already in there, even if folks didn't anticipate it ever happening.

And the way we set up our markets here, we don't yet have the WalMarts of Weed moving in at the moment, having more or less closed them out. But one successful challenge to that in the courts might change that, too.

 

[green404]

But, just like the gold rush, the folks who made money were those selling the supplies (picks, tents, sluicers, tinned goods, etc.) but in this case it is those selling nutes, lights, fans, extractors etc....

After the gold rush they say that there was shovels, mules, sluicers, were abandoned all over.
Right now here in Colorado grow stuff is being abandoned all over. Property managers are piling it on the curb and listing it on craigslist for free. People are trying to sell light hoods for $10. and the ad will still be there months later.

Hydro stores are complaining that "no one supports them anymore", I just think- You made made your money.. it's over, that was the wave. Time to supply the next boom.

 

[frostqueen]

But, just like the gold rush, the folks who made money were those selling the supplies (picks, tents, sluicers, tinned goods, etc.) but in this case it is those selling nutes, lights, fans, extractors etc....

That's not happening, though. Wholesalers might be making more money from the big legal warehouses - as the legal outfits go right to the wholesalers for their supplies - but most local garden stores I know of in Portland are experiencing a huge decline in business now, as every grower who used to sell on the black market has quit that gig and is no longer buying supplies. Store owners and managers are pretty much freaking out. Companies like Canna and BioBizz must also be taking a hell of a hit; who can afford that stuff now with prices at $1400 a pound?

I would have thought that retail stores would actually see an increase in business with legality, but it seems that few people want to grow their own indoors when they can buy $4 grams at the neighborhood storefront.

 

[HuffnPufferfish]

jeez, theyre saying it like its a BAD thing, like you should punish people for growing cheaper and having some brains (having stock)

I would say the problem was crazy high prices and this is the cure rather than a 'glut'. Sam said it before, you can grow good pot for about the same as tomatoes.

RIGHT!
14 a gram? i can grow the same for 1/10th of that! why would we pay that much?! before i started growing high grade went for 8, if you had something really really special i might have been 10, not sure if i can buy a bag of weed for less than 10 nowadays

 

[Medfinder]

theres a coop down the street that sells 18 percent tested cannabis at 10 dollars an 1/8. 70 an zip.

the glut of cannabis in so cal is incredible.

there are still coops that have 300 dollar oz though.

most do not take random vendors off the street to buy there bud.

and grow supply's on craigslist is HUGE! people that though ez money are finding out there were 1000 others trying to do the same thing.