Oregon Cannabis Market Crashes, How Do You Fix It?

What to do with Oregon’s Cannabis Surplus

What Can We Learn the Oregon Weed Price Crash of 2019? from CannabisNet on Vimeo.

Oregon has a cannabis problem…they have way too much! Apparently, the State is producing three times more cannabis than it is legally allowed to consume. Where these numbers come from is anyone’s guess, however to be fair, we do need to acknowledge that a lot of cannabis seized outside of Oregon did come from Oregon. Of course, we’re not talking about staggering amounts of cannabis either.

According to the Oregon government, roughly 2,600 pounds of cannabis was seized in 2017 that were destined out-of-state. Obviously, local lawmakers find this to be troubling especially since Sessions has a hard-on for a Federal crackdown and they don’t want to give him any excuses to bring the full force of the Federal government on their state.

Nonetheless, the “over production” problem has a real simple solve – Allow interstate cannabis commerce between legal states.

The entire West Coast of the US is 100% legal for both Medical and Recreational Cannabis. Since California legalized, they have been worried about a shortage due to the fact that the recreational licensing aspect of their legalized weed scheme is taking longer than expected. These bottlenecks will limit the available legal cannabis to the market. If there only was a state that produced more cannabis than it could consume – Oh yea that’s right…OREGON!

Now imagine for a second, if it were allowed for Legal Cannabis states to do inter-state commerce? If there is a shortage in California, the State of Oregon would be able to sell off their surplus to the state of California. This would not only generate additional revenue to the state, it would solve their over-production problem in one full swoop.

Last year, Las Vegas also suffered a shortage and with other states producing more than enough cannabis, would have allowed the legal cannabis system to continue to operate without any hold ups.

Why isn’t Inter-state Cannabis Commerce allowed?

The federal government is desperately trying to hold onto their antiquated cannabis laws and by allowing interstate commerce to occur (between legal cannabis states), you would essentially strip all the power from the federal government.

This is one reason I doubt that we’ll see a bill similar to the one I’m proposing come up. You have to first slay the ancient beast known as the “federal war on cannabis” prior to being allowed to suggest something of this nature.

The Federal government relies on cannabis prohibition to violate your rights without question, to ramp up surveillance, law enforcement and a plethora of other things. I’m not going to jump into the full list because I have plenty of times in the past (See Who benefits from the Drug War)

Interstate commerce would mean that the Federal government is “okay” with cannabis, and as we know from the shrill voice of Sessions…they are not.

Nonetheless, if this were to occur, it would not only generate more revenue for surplus states, but bring with a lot of other opportunities.

Breaking out of Secluded Markets

The only thing that is stifling the dramatic growth of the cannabis industry is the federal government. Despite the Fedgov’s efforts to deter the industry, there is still significant growth within the legal weed market.

Nonetheless, we still hear about shortages or overproduction issues within legal states. This is because regulation creates “dry zones” or “difficult to get zones” due to policy. What naturally occurs when one market has a “stricter regulatory process” is that organized crime and the likes take advantage of it.

Why?

Well for starters, more regulation means less supply while demand remains the same. This means that for the same gram of Kush in one place, could cost 10%, 20% and even 30% more expensive. While the regular citizen or cannabis entrepreneur wouldn’t dare to defy the rule of law…cartels could care less.

Similarly, if there is a surplus, cartels could easily step in, buy out the surplus and then re-sell in places that do not have cannabis laws on the books.

Whether we’re talking about shortages or surpluses, the fact that states can’t sell in between themselves creates an opportunity for folks who could give two shits about the law.

Thus, the very laws “allegedly designed” to protect us, is actually creating incentive for organized crime to fill the vacuum left by regulation.

We know that the Federal government won’t budge on these issues any time soon, unless of course if Congress forces them too [and there is some indication that this might be the case]. Nonetheless, considering these elements within a maturing cannabis industry is important. What do states do with the surplus? Do they burn it?

If so, what about medical cannabis patients in desperate need of the medicine? Interstate commerce would solve many issues along these lines, all we need is to circumvent the federal government and reclaim the power of the free market back into the hands of the cannabis industry.