Oregon Tries to Curb Production of Marijuana
Sellers of a resource and buyers of that resource best explain the theory of law of supply and demand. If the equilibrium between the two gets disturbed then sky is the limit in terms of expected output and is fully dependent upon the difference in the balance of supply and demand.
When it comes to production of Marijuana in Oregon, the state produces twice the required amount of cannabis as people are using hence creating a misbalance in the equilibrium of supply and demand. As per a recent estimate, it would take around 6 years to smoke the existing marijuana. Mind that, we are talking about legal marijuana.
The state used to be identified due to its richness in marijuana even before it was legalized for recreational purposes. Due to excessive supply, certain dispensaries in Portland are retailing it for $4 per gram. One tub of marijuana prices $20,000 in New York but same amount of cannabis charges merely $7,000 in Oregon.
Lawmakers are planning to give flexibility to Oregon Liquor Control Commission (OLCC) to drop further licenses as Oregon has already around 1 million pounds of unsold cannabis.
In pursuit of achieving a desired balance between the supply and demand, the Government is now planning to halt the production of marijuana.
“The harsh reality is we have too much product on the market,” said Governor
Kate Brown, who plans signing the bill which will not only minimize the production of the marijuana but will also stop the illegal sale of the legal marijuana into wrong hands.
In 2016, after the legalization of recreational marijuana, the decades old illegal farmers saw a passage of getting themselves registered hence creating saturation in the market within a short span of time.
Transportation of a marijuana plant across the state lines is a crime as per the federal government as cannabis is still illegal federally. To counter that, companies have found a way to move their respective brands. Utilizing this strategy, many small companies have found some success. Some bigger giants having access to the global market are also buying smaller and struggling brands to have a bigger success globally by following the same principle smartly.
With the positives the bill is envisaged to bring, there is a flip side to this also. People who would not get their licenses legally may switch over to selling the product in the black market which may become even a bigger problem in the longer run if the trend continued.
Oregon is also hoping to have an access to multiple markets after getting interstate exports legalized. Oregon’s are optimistic that the federal Government will permit interstate trading of marijuana which would ultimately eliminate the element of the marijuana going into the black market and would also boost the state’s economy once the excessive marijuana starts going to the legalized users through a legal channel. For that to happen, Federal Government will have to get it legalized for the good of the people of Oregon.