Rampant overproduction in Oregon’s market for legal, recreational marijuana has produced a 50 percent drop in prices, according to state economists. That widely documented collapse has been tough on farmers and retailers — but a boon for consumers.
A new state analysis finds the price collapse sparked a big uptick in marijuana purchases and a corresponding increase in associated tax revenue, The Oregonian/OregonLive reported.
“Lower prices are helping to drive the volume of sales higher and induce black and medical market conversions into” the legal, recreational market, said Josh Lehner of the Oregon Office of Economist Analysis.
Recreational marijuana sales in Oregon will be nearly $543 million this year, up 29 percent from 2017 and well above economists’ expectations, forecasts show.
When Oregon legalized marijuana four years ago, expectations were enormous for the newly legal market. The state created incentives for producers to leave the black market, leading to overproduction and the ensuing price decrease.
A state study found the retail cost of a gram of marijuana plunged from $14 in 2015 to $7 last year. [Read more at The Seattle Times]
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