The wholesale market for legal cannabis is marked by great regional variation, but the oversupply that has sent prices plummeting in Oregon and other Western states has not been able to dampen the general upswing on the national level.\u00a0<\/p>\n
Amid stratospheric hopes for the industry\u2019s growth, there have been\u00a0growing fears of a market correction<\/a>. An account on\u00a0Motley Fool<\/a>\u00a0notes that investment bank\u00a0Stifel<\/a>\u00a0foresees $200 billion in global annual adult-market and medical cannabis sales within a decade \u2014 amounting to a compound annual growth rate of nearly 34%. In addition, the U.S. is projected to generate between a third and a half of worldwide legal sales within that same timeframe.<\/p>\n But the report warns that the famous\u00a0oversupply<\/a>\u00a0in Colorado, Washington and especially Oregon \u2014itself \u00a0\u201ca result of everyone wanting in on cannabis\u201d \u2014 may be undermining the dream.<\/p>\n Regional and Seasonal Variation<\/p>\n In response to the flooded market, the Oregon Liquor Control Commission (OLCC<\/a>) announced in May that it was to suspend the processing of license applications as of June 15. Back in January, the OLCC reported that the state was producing two times more cannabis than was being consumed \u2014with more than six years\u2019 worth of supply wasting away at farms, warehouses and retail outlets.<\/p>\n The market reaction to overproduction is noted by\u00a0New Frontier Data<\/a>. Hardly surprisingly, Oregon saw a 64% decline in wholesale prices from October 2016 to March 2019, while Colorado experienced a 60% drop from January 2015 to April 2019. However, the \u201cdownward slides in wholesale prices are not linear, but in both cases reflected seasonality.\u201d Prices partially recovered in both states in the second and third quarter of this year. And in\u00a0March, Oregon wholesale prices matched Colorado\u2019s for the first time.<\/p>\n The report notes that a moment of reckoning looms with the approaching harvest season in Oregon (more of an issue than in Colorado where only indoor is permitted). \u201cWill it lead to further price declines, or are prices in both Colorado and Oregon bottoming out?\u201d In Colorado, where legalization took effect in 2014, it took until 2017 for the state\u2019s legal market to effectively absorb the pre-existing illicit market, with legal supply effectively meeting demand. This more cautious approach has led to a somewhat more stable market.<\/p>\n On a national level,\u00a0Cannabis Benchmarks<\/a>\u00a0finds that the simple average wholesale price increased $65 to $1,557 per pound by August this year. The lower prices in the western states are in part offset those on the East Coast.\u00a0Marijuana Business Daily<\/a>, citing interviews with local industry leaders, reports a range from $2,000 a pound for the medical market in Maryland to as high as $4,200 per pound for the adult-use market in Massachusetts. This contrasts Colorado, where last month the wholesale price\u00a0stood at $850<\/a>.<\/p>\n There is also a considerable price differential between indoor (the most highly valued), greenhouse-grown (the middle range) and outdoor (least valued, however disappointing this news will be to its hardcore aficionados).\u00a0<\/p>\n As Cannabis Benchmarks writes: \u201cCalifornia\u2019s market has seen a surge of sun-grown supply recently as light-deprivation harvests are dried, trimmed, and brought to market\u2026 In contrast, Oregon and Washington state reported transaction stats indicate that wholesale buyers continue to favor indoor flower this summer, with increasing relative volumes of such product helping to push up Spot prices in those markets.\u201d<\/p>\n TELL US,<\/strong>\u00a0what are your thoughts on the price of cannabis in legal markets?<\/p>\n The post Wholesale Cannabis Prices Rise in Legalized States<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n
The wholesale market for legal cannabis is marked by great regional variation, but the oversupply that has sent prices plummeting in Oregon and other Western states has not been able to dampen the general upswing on the national level.\u00a0 Amid stratospheric hopes for the industry\u2019s growth, there have been\u00a0growing fearsContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":190,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[50,11842,170,687,4552,3823,185,2401,7041],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/37844"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/190"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=37844"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/37844\/revisions"}],"predecessor-version":[{"id":37845,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/37844\/revisions\/37845"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=37844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=37844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=37844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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As New Frontier Data\u2019s vice president Beau Whitney writes in an analysis for\u00a0Bezinga<\/a>\u00a0this week, \u201cOregon\u2019s woes are directly attributable to the (originally unlimited) number of licensed cultivators in its program.\u201d Whereas Colorado had guarded itself against glut by requiring any growers applying for an increase in capacity to demonstrate proven demand for their previous crop.<\/p>\n
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\nRead More: Wholesale Cannabis Prices Rise in Legalized States<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"