Marijuana business: trends in Oregon

Oregon has the most experience of any U.S. state with commercial marijuana. For many years before legalization, starting as early as the 1950s, surveys of Oregon found more marijuana use and cultivation than in any other western state. Mild climate and moderate rainfall in the Willamette Valley, which produces widely known orchard fruits and wines, also favored covert marijuana farming.

In 1973, Oregon became the first state to decriminalize small amounts of marijuana: up to an ounce. By the 1980s, marijuana had become the state’s most valuable crop. In 1998, Oregon became the second state to legalize and regulate medical marijuana. In 2014, Oregon became the third state to legalize and regulate recreational marijuana, following Colorado and Washington two years before.

Product trends: Quality and strength of marijuana in the United States evolved after early restrictions, starting with federal and state laws during the 1930s. Bulk “bricks” of a pound or two–common through the 1970s–were often smuggled from Central and South America. Strength was generally low. Delta-9-tetrahydrocannabinol (THC), the main euphoric, measured a few percent by weight in a mix of dried leaves, flowers and stems. Sinsemilla from only unfertilized flower buds–without seeds, leaves or stems–was unusual and costly.

Popular grades of commercial marijuana

Grade A seedless, no large leaves or stems, 15 percent THC or higher
Grade B some leaves, few seeds, around 10 percent THC
Grade C largely leaves, seeds and stems, 5 percent THC or lower

Source: RAND reports

Processed marijuana began to capture U.S. trade during the 1980s and became a focus of consumer appeal. However, grade A sinsemilla needs greenhouses to protect against insects and fungus–optimized for light, temperature, moisture and nutrients. During decades of marijuana cultivation as a covert crop in Oregon, most producers look to have worked small, open-field plantings. Locally grown, grade B products overtook grade C imports and so far survive against industrialized, grade A products.

Business trends: When presented the option of a legalized and regulated business in 2015, experienced Oregon growers mainly adapted and expanded open-field plantings, an annual crop cycle harvested in early fall. Out of about 2,000 producer licenses approved and in process, as of May, 2018, nearly two-thirds were for locations in only four of the 29 Oregon counties: Clackamas, Jackson, Josephine and Lane. They span lowlands east of the Coast Range mountains around Interstate 5, running from Portland south through Salem and Eugene to Medford. That is where about three-quarters of the state’s residents live.

The first of the annual harvests after legalization, in 2016, shrank because of heavy rain, cold weather and hailstorms. The next year, nearly ideal weather provided a huge crop. The Oregon agency licensing marijuana operations has not published production and sales summaries. However, news writers claiming to have seen internal data say producers reported sales for 2017 of around 350,000 pounds against producer inventory, unsold in February, 2018, of more than a million pounds.

Within a few months after the harvest, wholesale prices collapsed. Grade B product formerly selling at over $1,500 a pound was reported dumped at $100 a pound or less, when costs of production ranged above $200 a pound. Some growers say they are converting smokable marijuana into more stable extracts, hoping to sell medical and edible products. Retail shops that bought at last year’s prices are being whipsawed by competitors who waited and bought at fire-sale prices. Half the workers in the Oregon marijuana industry may be out of jobs. Desperate business owners are increasing covert exports to other states that legalization was expected to retard.

– Craig Bolon, Brookline, MA, May 29, 2018


Suzanne Roig, Overproduction of marijuana floods Oregon markets, Bend (OR) Bulletin, May 26, 2018

Matt Stangel and Katie Shepherd, Oregon grew more cannabis than customers can smoke, Willamette Week (Portland, OR), April 18, 2018

Robert C. Clarke and Mojave Richmond, Cups, labs and terps, Cannabis Business Times (Cleveland, OH), April 4, 2018

Oregon Liquor Control needs cannabis monitoring and security systems, Audits Division, Oregon Secretary of State, February, 2018 (7 MB, 41 pp)

Pete Danko, A reckoning has arrived for Oregon’s overgrown cannabis industry, Portland (OR) Business Journal, January 10, 2018

Marijuana License Applications, Oregon Liquor Control Commission, 2018

Mahmoud A. ElSohly, Zlatko Mehmedic, Susan Foster, Chandrani Gon, Suman Chandra and James C. Church, Changes in cannabis potency over the last two decades in the United States, Biological Psychiatry 79(7):613–619, 2016

Omar Sacirbey, Growing high-quality cannabis in a greenhouse, Marijuana Business Daily (Denver, CO), September, 2016

Jerry Kieran, Measuring yield, Cannabis Business Times (Cleveland, OH), September, 2016

Daniel Cressey, The cannabis experiment, Nature 524(7565):280–283, August 29, 2015

Eric L. Sevigny, Is today’s marijuana more potent simply because it’s fresher?, Drug Testing and Analysis 5(1):62-67, 2013

THC content of sinsemilla and Mexican commercial-grade marijuana, Appendin B in Beau Kilmer, Jonathan P. Caulkins, Brittany M. Bond and Peter H. Reuter: Reducing Drug Trafficking Revenues and Violence in Mexico, RAND Drug Policy Research Center (Santa Monica, CA), 2010

Jonathan P. Caulkins, Estimated cost of production for legalized cannabis, RAND Drug Policy Research Center (Santa Monica, CA), 2010

Keith Stroup, America’s no. 1 crop: marijuana, High Times (New York, NY), April, 1986

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