Things not going well for the Oregon marijuana industry

[Parliament 14593]

Oregon's legalization law was VERY Capitalist and lots of producers and retailers jumped in.  Well, now they have "overproduction" and consumers are happy and growers are not.  Ie, supply and demand are shaking themselves out.  (Some guy bought a pack of joints for $16.  Is that cheap?  Dunno)

Not intended to be political at all.  It's just intriguing that this is happening.  The story is surprisingly even.  Producers complain some about "lack of regulation," and consumers are happy about low prices.

https://www.youtube.com/watch?v=dyCbAuHqN0M

[mchookem 16765]

Colorado seems to have done things right from the start, from regulation to tax revenue. it's such a 'green' industry (pun intended) with so many unknowns,  you'd think states would take lessons learned from them. 

[Larry T. Spider 1747]

Sounds like the free market at work. I don’t have a problem with any of it. Competition will drive innovation and benefit the customers, who were clearly happy in that video. If there are too many people producing and selling, then maybe don’t go into that business... 

[NBMisha 224]

Same thing happened in WA.  Prices fell from 25 per gram to 10-15.  And they have stayed there.  I believed that's called an equilibrium.

[Whitman 694]

5 minutes ago, NBMisha said:

Same thing happened in WA.  Prices fell from 25 per gram to 10-15.  And they have stayed there.  I believed that's called an equilibrium.

I believe that's called a party.

[Onboard 2.0 9083]

Too bad that doesn't happen in the bourbon industry.

[Fondren & Main 6893]

17 minutes ago, Onboard 2.0 said:

Too bad that doesn't happen in the bourbon industry.

Or craft beer...

[Surly Bevo 25718]

17 minutes ago, Onboard 2.0 said:

Too bad that doesn't happen in the bourbon industry.

It was called the 60s-00s

[Kyle 207]

Seems like things are working out perfectly. If producers cannot earn an acceptable return, they may choose to exit, reduce supply, and increase price, which may make it more viable for other producers.

[Onboard 2.0 9083]

46 minutes ago, Surly Bevo said:

It was called the 60s-00s

Yeah true, but the variety wasn't around then like now.

[Surly Bevo 25718]

5 minutes ago, Onboard 2.0 said:

Yeah true, but the variety wasn't around then like now.

True, though it sort of was it was just sitting in certain barrels all being mixed together when it went to market

[Onboard 2.0 9083]

Just now, Surly Bevo said:

True, though it sort of was it was just sitting in certain barrels all being mixed together when it went to market

Yeah the small name brands, and small batch world has exploded (Major thread drift of course).

[Incredulity 11874]

1 minute ago, Surly Bevo said:

True, though it sort of was it was just sitting in certain barrels all being mixed together when it went to market

Or marketed as well.

[dirtonia 271]

The invisible hand has a bong in the other hand.

[Guest]

1 hour ago, Kyle said:

Seems like things are working out perfectly. If producers cannot earn an acceptable return, they may choose to exit, reduce supply, and increase price, which may make it more viable for other producers.

But we were counting on gouging our buyers...

[SA-KC_Horn 1298]

Sounds like a trip is in store for Oregon. 

[Aqua Buddha 14803]

The weed industry is wildly overvalued right now.  Bases on market prices in California, the weed in the ground is worth more than all of the grapes for wine.  That's absurd.  Major bubble going on.

As for booze, the regulation is a good thing, although I'm not a fan of the patchworks restrictions we have on sales around the country.  The regulation protects quality and production standards.  You can't just call yourself "bourbon" and in the case of wine, you must state the varietal, the location of growing, and the alcohol content.  One thing prohibition and it's demise did was clean up the industry and have more uniform standards.

Weed will probably take a similar trajectory.

[NeverMarryAStripper 22277]

When something is legalized I would expect the cost to come down. Anybody who thought they were going to keep getting the same prices as the illegal dealers was smoking too much of their own product.

[Newdoc 3511]

Local state and eventually the fed government will get googly eyed at low prices and start taxing more for revenue. 

I’m buying stock in Frito Lay and the company that makes Little Debbie’s.

[Trey3216 15452]

6 hours ago, slorch said:

But we were counting on gouging our buyers...

They thought they were going to get criminalized, street corner prices and didn’t factor in the many layers of middlemen taken out of the market as well as transport costs from out of country.  

 

I.e. market factors working beautifully 

Edited December 17, 2018 by Trey3216

[3adays 454]

Is it safe to say that a lot of that excess product is now getting shipped and sold in states where it’s still illegal? 

[Surly Bevo 25718]

I had a friend strike out for Oregon in 2015. He is about to move back. Much like what is being said on this thread, tons of competition and it's a complete grind. 

This is a bummer man

[hayden_horn 11402]

So wait. We make an illegal product legal and the prices go down? The hell you say. 

[Thetexashammer 1062]

Do you know why they call it weed?

[immortal13 4059]

8 hours ago, Aqua Buddha said:

The weed industry is wildly overvalued right now.  Bases on market prices in California, the weed in the ground is worth more than all of the grapes for wine.  That's absurd.  Major bubble going on.

As for booze, the regulation is a good thing, although I'm not a fan of the patchworks restrictions we have on sales around the country.  The regulation protects quality and production standards.  You can't just call yourself "bourbon" and in the case of wine, you must state the varietal, the location of growing, and the alcohol content.  One thing prohibition and it's demise did was clean up the industry and have more uniform standards.

Weed will probably take a similar trajectory.

....

Edited December 17, 2018 by immortal13
Wrong thread

[immortal13 4059]

I fail to see the problem with cheaper weed prices. 

[RPM 26614]

Right now there are pockets of legalization. Until it becomes more normalized nationwide where money and product can travel across state lines legally the market will continue to be flooded in these pockets. Make it legal federally and the ability to ship through non-legalized areas just like alcohol reciprocity. Then it becomes a true open market.

[Hate 20247]

10 hours ago, OatmealRaisinCookie said:

I had a friend strike out for Oregon in 2015. He is about to move back. Much like what is being said on this thread, tons of competition and it's a complete grind. 

Look on the bright side, he didn't die of dysentery.

[Onboard 2.0 9083]

4 hours ago, RPM said:

Right now there are pockets of legalization. Until it becomes more normalized nationwide where money and product can travel across state lines legally the market will continue to be flooded in these pockets. Make it legal federally and the ability to ship through non-legalized areas just like alcohol reciprocity. Then it becomes a true open market.

I believe states control alcohol sales across state lines, not the feds.  We can't ship hootch here in VA. I doubt weed would be any different.

[RPM 26614]

1 minute ago, Onboard 2.0 said:

I believe states control alcohol sales across state lines, not the feds.  We can't ship hootch here in VA. I doubt weed would be any different.

You can ship alcohol through dry areas. There's no Smoky and the Bandit across dry state lines anymore. My analogy may be bad, but you understand the point I'm trying to make. You at least should be able to ship weed from manufacturer in Oregon to consumer in Florida as easily as wine.

[Gene Parmesan 4064]

What climates do you need to make great weed?  Just curious what area in the country would be the best producers assuming it was legalized everywhere.  Or is it all done in controlled environments? 

[Hate 20247]

It is done in controlled environments for the most part.  

[Onboard 2.0 9083]

23 minutes ago, RPM said:

You can ship alcohol through dry areas. There's no Smoky and the Bandit across dry state lines anymore. My analogy may be bad, but you understand the point I'm trying to make. You at least should be able to ship weed from manufacturer in Oregon to consumer in Florida as easily as wine.

Va. does not allow hard liquor to be shipped across/ into the state line. I get "car parts" shipped form my guy in Conn. for those rare blends of bourbon goodness I can't find here. 

That included wine clubs for many years, but I believe you can now. Like I said alcohol is a state issue and not a federal issue, weed won't be any different.

 

Yes, I do get your point and support your run for office to get it passed in all states nationwide !!!!  Same thing with insurance. You can't sell insurance across state lines because of each states unique little phifedom of regulatory BS.  That's one of the reasons it's so expense in many places now.

Edited December 17, 2018 by Onboard 2.0

[Post Oak 20555]

Good video Parliament.  

I really dont find much issue with what Oregon did or with what's currently happening to the market.  

 

[Incredulity 11874]

1 hour ago, Hate said:

It is done in controlled environments for the most part.  

Historically the coastal mountains of Southern Oregon and Northern California have been areas that had outdoor illegal volume grows.

Most of the legal weed in Oregon is being grown indoors, however some of the major players are trying to develop outdoor "in the ground" grows to maximize production and decrease costs to compete in the current environment.  If that is succesful prices will continue to fall.  

[Parliament 14593]

It is done in controlled environments for the most part.  

Yeah I think most States make you do it inside, with growth lights. Greenhouses or outside is no go. California may be an exceptions.

[Hanrahan 1306]

Drug dealers complaining about prices being too low?  Awesome.

[Aqua Buddha 14803]

2 hours ago, RPM said:

You can ship alcohol through dry areas. There's no Smoky and the Bandit across dry state lines anymore. My analogy may be bad, but you understand the point I'm trying to make. You at least should be able to ship weed from manufacturer in Oregon to consumer in Florida as easily as wine.

Individual states decided what can ship in and what can't.  For example, Kentucky does not allow wine shipments to individuals.  (They think they're protecting the bourbon industry but whatever.)  They can ship to independent distributors via the three tier system.  It'll be interesting if and when weed goes to that model.

[Bat Guano 363]

2 hours ago, Gene Parmesan said:

What climates do you need to make great weed?  Just curious what area in the country would be the best producers assuming it was legalized everywhere.  Or is it all done in controlled environments? 

South of the 30th parallel is best for quality, outdoor growing, based on hours and intensity of the sun, but there are no places in the US that are legal to grow it that far south (basically south of San Antonio and much of Florida).  Most growers are using controlled environments.

[NeverMarryAStripper 22277]

If weed is ever legalized in Texas I can only imagine the fucked up distribution system that will be created

[Red Six 131]

It's WEED. As in, it's a WEED. It will grow anywhere there is soil, water, and light. No, you won't always have this blow-you-away Maui Wowie, but it will still get you high. If you can grow marigolds, you can grow weed.

There is no reason why, in a legal market where growing for personal use is permitted, that there should be a proliferation of a massive weed industry.

It's not like home-brewing, which requires special equipment, space, time, and precision. Same for home winemaking.

It's not even like home gardening, where you have to have a certain economy of scale to be able to be able to be self-sufficient on tomatoes or okra or whatever.

A person can literally put four seeds into some dirt, water it, and a few months later get blasted again and again.

It's a plant. There is nothing special about it that requires a significant industrial infrastructure. You can act like the stoner Gregor Mendel and try to create these genetically superior sativa/indica blends that give a nice body high while also giving you headspace for deep thoughs, and you can make shatter and dabs and whatever else garbage the kids are into these days, but, in the end, it's just a plant that gets you high.

[Gene Parmesan 4064]

16 minutes ago, Red Six said:

It's WEED. As in, it's a WEED. It will grow anywhere there is soil, water, and light. No, you won't always have this blow-you-away Maui Wowie, but it will still get you high. If you can grow marigolds, you can grow weed.

There is no reason why, in a legal market where growing for personal use is permitted, that there should be a proliferation of a massive weed industry.

It's not like home-brewing, which requires special equipment, space, time, and precision. Same for home winemaking.

It's not even like home gardening, where you have to have a certain economy of scale to be able to be able to be self-sufficient on tomatoes or okra or whatever.

A person can literally put four seeds into some dirt, water it, and a few months later get blasted again and again.

It's a plant. There is nothing special about it that requires a significant industrial infrastructure. You can act like the stoner Gregor Mendel and try to create these genetically superior sativa/indica blends that give a nice body high while also giving you headspace for deep thoughs, and you can make shatter and dabs and whatever else garbage the kids are into these days, but, in the end, it's just a plant that gets you high.

I am assuming there are degrees of enjoyment beyond the baseline of being high.  You can easily make alcohol at home if ability to get drunk is all that counts.

[Aqua Buddha 14803]

Yeah, you can grow grapes for wine most anywhere but only a few select corners of the world make great wine.

[Onboard 2.0 9083]

3 minutes ago, Aqua Buddha said:

Yeah, you can grow grapes for wine most anywhere but only a few select corners of the world make great wine.

This, It's a bit more than playing Johnny Apple seed. The growing process has to be watched and managed as flowering begins to get something more than just sorta decent pot. 

[jeevsie 3789]

5 hours ago, Hate said:

Look on the bright side, he didn't die of dysentery.

[RPM 26614]

5 hours ago, Onboard 2.0 said:

Va. does not allow hard liquor to be shipped across/ into the state line. I get "car parts" shipped form my guy in Conn. for those rare blends of bourbon goodness I can't find here. 

That included wine clubs for many years, but I believe you can now. Like I said alcohol is a state issue and not a federal issue, weed won't be any different.

 

Yes, I do get your point and support your run for office to get it passed in all states nationwide !!!!  Same thing with insurance. You can't sell insurance across state lines because of each states unique little phifedom of regulatory BS.  That's one of the reasons it's so expense in many places now.

Perhaps I'm not being clear. I'm about talking direct shipment to consumers, I'm referring to intrastate commerce from manufacture to distribution. A shipment of wine from Oregon to North Carolina does not have to bypass Virginia.

[Aqua Buddha 14803]

Most states allow wine club shipments only if that particular item is not sold to any of the distrubutors in that state.  I would expect weed to be heavily regulated like booze and that's not altogether bad.

[Red Six 131]

2 hours ago, Gene Parmesan said:

I am assuming there are degrees of enjoyment beyond the baseline of being high.  You can easily make alcohol at home if ability to get drunk is all that counts.

If you make alcohol incorrectly at home, you'll go blind.

I guess the same could be said about some cannabis products -- if you try to make hash oil at home, you could blow yourself up.

But the difference between weed and almost any other agricultural product is that it is relatively easy to produce a sufficient quantity for personal use with limited resources of space, time, and money.

A person can't grow everything he needs for beer in his back yard. He might be able to grow enough grapes for some wine, but wine grapes are picky. You also can't grow them inside under some fluorescent lights.

I think I've mentioned this on other cannabis-related threads, but the real money in this new pot economy is going to be in the extracts and other derivative products. That's what the kids want and the businesses that perfect this business model are going to be the ones who win.

Straight flower is perishable and is subject to the same economic risks as any other cash crop -- weather, disease, pests, etc. The only way to differentiate oneself as a corporate grower and actually make money on it is to ensure uniformity and maximize yield. And, given the aforementioned reasons, I don't think that's going to be enough.

I wouldn't be surprised if, when the industry is legitimized nationally, agricultural production focuses mainly on creating a standardized raw material for the processed goods, just like cotton, corn, wheat, or any other cash crop that comes out of the ground. There will be co-ops and commodity exchanges and those who can maximize yield and operate on economies of scale will be the most successful.

There just won't be much of a market for pure flower, not because there won't be a demand, but because the suppliers will tell us not to demand it. Home growers will be like home brewers and backyard gardeners, producing and sharing styles and strains of the days of yore.

So, anyhow... where are my Doritos?

[RPM 26614]

28 minutes ago, Red Six said:

I wouldn't be surprised if, when the industry is legitimized nationally, agricultural production focuses mainly on creating a standardized raw material for the processed goods, just like cotton, corn, wheat, or any other cash crop that comes out of the ground. There will be co-ops and commodity exchanges and those who can maximize yield and operate on economies of scale will be the most successful.

There just won't be much of a market for pure flower, not because there won't be a demand, but because the suppliers will tell us not to demand it.

[Larry T. Spider 1747]

Seems like the place with the cheapest electricity would be the best place to grow.