Rampant overproduction in Oregon’s market for legal, recreational marijuana has produced a 50% drop in prices, according to recent estimates by state economists.
The widely documented collapse has been tough on cannabis businesses such as cultivators and retailers – but a boon for consumers.
“It will come from higher value-added products like oils, creams and edibles, in addition to niche, specialty strains.”
The new state analysis finds the price collapse sparked a big uptick in marijuana purchases and a corresponding increase in associated tax revenue, The Oregonian reported.
Recreational marijuana sales in Oregon will be nearly $543 million this year, forecasts show, up 29% from 2017 and well above economists’ expectations.
When Oregon legalized marijuana four years ago, the business potential looked to be enormous for the new legal market.
The state created incentives for producers to leave the black market, leading to overproduction and the ensuing price decrease.
A state study found the retail cost of a gram of marijuana plunged from $14 in 2015 to $7 last year.
While Oregon has no general sales tax, it does levy a 17% sales tax on marijuana.
State marijuana taxes generated nearly $70 million in revenue last year and are forecast to generate nearly $90 million in 2018.
– Associated Press
How craft cannabis businesses are catering to consumers' desire for high end, small batch products.
$7 a gram is still too much. What happened to those $50 ounces we were hearing about in Washington State?
I am curious…knowing that the retailers must pay their taxes in cash (they actually receive training on how to avoid being robbed when they carry the tax money to Salem each quarter) because the banks cannot accept marijuana money…how is the State of Oregon handling $70 million cash? What path does the money take to allow use for state expenditures?