Oregon Cannabis Market Growth: How Legislation Works

Oregon Cannabis Market Growth

Whether it’s the growth of cannabis plants or the growth of the cannabis industry, Oregon has what it takes to be a success. In 1973, Oregon became the first state to decriminalize cannabis possession and in 2015, Oregon Governor Kate Brown signed an emergency bill declaring recreational cannabis sales legal. Since then, the state has become a home for cannabis companies, weed investment, and cannabis industry success.

As with Colorado, Oregon allows counties and cities within the state to accept or reject recreational cannabis sales. Those counties that do allow recreational sales tend to be on the western side of the state, whereas the east, with its border to Idaho where cannabis is completely illegal, is not as permissive.

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Oregon state cannabis regulations allow for outdoor grows if conducted behind adequate fencing and home growth as long as it is not within 1,000 feet of a school. Within the industry as a whole, outdoor growth has been a contentious subject with some jurisdictions requiring no public sight of grow ops. This has led to widespread indoor growth of cannabis, one of the contributing factors in the industry’s carbon footprint.

As a result of the legal decisions made within Oregon for the decriminalization of cannabis, the industry has found conditions to thrive and the state’s cannabis turnover is forecast to approach $1 billion dollars annually in the next three yearsEstimates in 2016 by the Oregon Liquor Control Commission (OLCC) estimated that licenses for cannabis companies would number between 800 and 1,200 across the first few years. In reality, over 1,824 have already been issued with approximately half of those pertaining to cultivation operations.

Early weather disruptions in the first year of cultivation led to overgrowth in subsequent years, making it more accessible to more Oregonians, but lowering the price of cannabis, and leaving some sellers with unmovable flowers. The state’s license restrictions mean overgrowth cannot simply be picked up for additional processing. In total, Oregon’s current cannabis inventory is estimated at around one million lbs, which, for a state of four million people, can reasonably be called a surfeit.

Oregon has a legislative framework that’s allowing the industry to thrive and grow, it just hasn’t quite found the right balance between supply and demand. Ultimately this is likely to lead to some consolidation of cultivation concerns as the industry applies more control of the base product, in line with consumer demands. This is a process already noticeable within the retail sector with around 20% of Oregon’s 544 dispensaries belonging to a larger group, or chain, of outlets.

While there are a variety of factors that will lead to success in the cannabis industry, one key component is the legislative framework applied by authorities in a jurisdiction and another is the information and operations that individual cannabis companies have access to. In Oregon, you’ll find a legislative approach that has encouraged business.

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