Uneasy marijuana industry seeks broader trade amid vast glut

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Along the West Coast, which dominated U.S. marijuana production long before states began to legalize it, producers face what many call the failed economics of legal pot. FOX13

There is vast supply, thanks to great growing conditions and a wealth of expertise, but any surplus remains officially trapped within each state’s borders due to the federal ban on marijuana. Prices have plunged and producers have struggled.

In Senate testimony last month, Attorney General Merrick Garland said the Justice Department will soon announce a new marijuana policy — one that would hew close to the "Cole Memorandum" of 2013, which made clear the feds would not interfere with state efforts to regulate marijuana as long as certain law enforcement priorities were met.

How states have set up their markets has implications for how their industries are doing now — and how they might fare should businesses be allowed to sell out of state. In February, the Oregon Liquor and Cannabis Commission reported marijuana businesses were sitting on about 3 million pounds of unused cannabis, as well as 75,000 pounds of concentrates and extracts.

In Washington, which has some of the highest cannabis taxes in the country, the prices consumers pay in pot shops are still cheaper than illicit weed. The state is raking in half a billion dollars a year in taxes, money it devotes to health care and government operations. East Fork Cultivars, one of Oregon’s first licensed growers, has thousands of pounds of marijuana stashed, said co-founder Nathan Howard.

"You’re all staying in this game for one reason: that the federal government, whether it’s this term or next term, they are going to recognize marijuana on a 50-state basis," he recalled telling them. "And southern Oregon is to marijuana what Bordeaux is to France." The arrival of legal, adult-use sales in 2018 in California — the nation’s largest pot producer and the world’s fourth-largest economy — was seen as a breakthrough that would help open the way for federal legalization.

 

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Maybe taxing it over 30% has something to do with it 🤣

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