The marijuana industry in Oregon finds itself at a significant crossroads. While legal marijuana has brought economic opportunities and put the state at the forefront of cannabis regulation, current market conditions have pushed it into turmoil. According to Oregon Live, from stats via the Oregon Liquor and Cannabis Commission (OLCC), marijuana prices hit an all-time low of $3.51 per gram in December 2024, a symptom of a supply surplus that far outpaces demand.
In 2024, Oregon produced a record-breaking 12.3 million pounds of cannabis—a 28% increase from the previous year. But instead of boosting profits, the oversupply has driven prices down, leaving businesses with mounting inventory and shrinking margins. The reality is clear: Oregon is growing far more cannabis than the state can consume.
Oversupply Problem in Oregon’s Marijuana Market
Oregon’s 2024 marijuana harvest was an undeniable success, aided by optimal growing conditions. Southern Oregon’s later rainfall and reduced wildfire activity contributed to a bountiful crop. Licensed producers boosted harvest activity, producing more than 12.3 million pounds of usable marijuana—nearly double the estimated consumer demand.
Unfortunately, demand has not kept pace with supply. Last year, total marijuana sales in Oregon were virtually flat at about $960 million, reflecting steady, unspectacular consumption patterns.
The oversupply is not a new issue for the state’s cannabis market. Oregon has been producing more marijuana than it consumes since recreational legalization in 2014. But 2024 painted an even bleaker picture as inventory stockpiles grew, putting further downward pressure on already razor-thin margins.
Retail marijuana prices in Oregon have been under $4 per gram for nearly two years. By December 2024, prices fell to an all-time low of $3.51—an outcome that spells financial disaster for many growers and retailers.
While consumers benefit from competitive prices, marijuana businesses struggle to remain afloat.
Moratoriums introduced in 2019 to limit grower licenses, and later on retailers, were meant to cap production and bring some balance to the market. However, these measures have proven insufficient in addressing the deep supply-demand imbalance.
Why Interstate Commerce Could Be the Answer for Oregon Marijuana
From the start of Oregon’s legalization efforts, cannabis advocates have envisioned a future where cannabis could be shipped across state lines. Unfortunately, federal restrictions remain a major hurdle, prohibiting interstate cannabis commerce even between states that have legalized marijuana.
Today, Oregon’s dream of finding new markets for its abundant cannabis still feels far off. Legislative momentum for federal legalization or interstate commerce agreements has stalled. With a divided political climate and limited bipartisan support, cannabis interstate commerce remains a distant possibility under current federal law.
The Case for Interstate Cannabis Trade
While uncertainty clouds the federal landscape, one thing remains clear—interstate commerce could alleviate the pressure on Oregon’s cannabis market almost overnight.
Interstate cannabis trade would give Oregon access to larger markets, allowing its surplus supply to meet the demand in states like California or New York. These states have larger populations but face challenges such as higher production costs or limited supply. By tapping into these markets, Oregon could address its oversupply issue while helping other states meet their cannabis needs.
This trade could also help stabilize prices in Oregon. Selling surplus inventory to out-of-state markets would allow growers and retailers to share the financial burden of overproduction more evenly. As a result, retail prices could stabilize, offering fairer margins for businesses and maintaining affordability for consumers.
Beyond addressing market pressures, interstate commerce would provide significant economic benefits. Oregon’s cannabis industry could become a major economic driver, creating jobs, supporting local economies, and generating increased revenue for both businesses and the state.
Until federal policy permits cannabis shipment between states, Oregon’s market will remain trapped in its current, ill-fated cycle. The OLCC has warned that the industry’s predicament will persist, with Oregon experiencing an ongoing competitive marketplace characterized by low prices for customers but unsustainably low margins for businesses.
Unfortunately, continued oversupply could lead to business closures, layoffs, and lost revenue within the state—a reality that is already unfolding for some cannabis companies.
What’s Next?
The path forward demands bold legislative change at the federal level. Policymakers in Oregon can also advocate for regional agreements with neighboring states that have legalized cannabis, creating a roadmap for intrastate collaboration as the larger federal conversation evolves.
For now, Oregon’s marijuana industry serves as a powerful example of why national cannabis policies need to facilitate collaboration rather than create isolated markets. Interstate cannabis commerce has the potential not only to save Oregon’s struggling industry but also to unlock unprecedented opportunities for growers, retailers, and consumers nationwide.
