SPRINGFIELD, Ore. (AP) — A glut of legal marijuana has driven Oregon pot prices to rock-bottom levels, prompting some nervous growers to start pivoting to another type of cannabis to make ends meet — one that doesn’t come with a high.
Applications for state licenses to grow hemp — marijuana’s non-intoxicating cousin — have increased more than twentyfold since 2015, and Oregon now ranks No. 2 behind Colorado among the 19 states with active hemp cultivation. The rapidly evolving market comes amid skyrocketing demand for a hemp-derived extract called cannabidiol, or CBD, seen by many as a health aid.
Industrial hemp (Photo by Sean Gallup/Getty Images)
In its purified distilled form, CBD oil commands thousands of dollars per kilogram, and farmers can make more than $100,000 an acre growing hemp plants to produce it. That distillate can also be converted into a crystallized form or powder.
“Word on the street is everybody thinks hemp’s the new gold rush,” said Jerrad McCord, who grows marijuana in southern Oregon and just added 12 acres (5 hectares) of hemp. “This is a business. You’ve got to adapt, and you’ve got to be a problem-solver.”
It’s a problem few predicted when Oregon voters opened the door to legal marijuana four years ago.
The state’s climate is perfect for growing marijuana, and growers produced bumper crops.
Under state law, none of it can leave Oregon. That, coupled with a decision to not cap the number of licenses for growers, has created a surplus.
Oregon’s inventory of marijuana is staggering for a state its size. There are nearly 1 million pounds (450,000 kilograms) of usable flower in the system, and an additional 350,000 pounds (159,000 kilograms) of marijuana extracts, edibles and tinctures.
The Oregon Liquor Control Commission, which regulates the industry, says some of the inventory of flower goes into extracts, oils and tinctures — which have increased in popularity — but the agency can’t say how much. A comprehensive market study is underway.
Yet the retail price for a gram of pot has fallen about 50 percent since 2015, from $14 to $7, according to a report by the Oregon Office of Economic Analysis. Growers and retailers alike have felt the sting.
cannabidiol (CBD) (credit: CBS)
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