Despite the State Cannabis Tracking System in Oregon Showing High Levels of Unsold Inventory, Buyers are Holding Out for Newly Harvest Product
Reports in Oregon have noted that wholesale buyers were complaining of a shortage of desirable flower in Oregon’s legal market, despite official data showing robust levels of unsold inventory logged in the state’s Cannabis Tracking System (CTS). A recent report from the Bend Bulletin confirms our earlier accounts in the Cannabis Benchmarks Premium Report, quoting several market participants and industry regulators as expressing similar descriptions of the current supply and demand dynamics in Oregon’s market.
The Bulletin report emphasizes that retailers are looking to take in freshly harvested product, which is apparently scarce at the moment. It goes on to state that new outdoor harvests will begin in September.
However, historical data from Oregon’s legal cannabis system suggests that freshly-harvested plant material could be coming to market sooner, perhaps in August. According to data from the state Liquor Control Commission (OLCC), the volume of wet plant material harvested by Oregon growers doubled month-over-month from June to July of 2018, from about 125,000 to around 250,000 pounds. Harvest volumes would continue to increase gradually in August and September 2018 before spiking to over 2.5 million pounds of wet plant material in October, the primary month of the autumn harvest.
The volume of wet plant material harvested in July 2017 also increased month-over-month, though not to the degree observed in 2018. August 2017 would see a significant expansion of Oregon’s total statewide harvest volume, however, to a bit under 250,000 pounds from about 150,000 the month prior. In any case, the previous two years provide precedents for increases in cannabis production in Oregon taking place in mid-late summer.
Whether the same trends in harvest volume will manifest this year remains to be seen. Due to the crash in wholesale prices that took place in Oregon’s market in 2018, it is possible that some of the cultivators responsible for the mid-summer boost in supply may have exited the market, scaled back their production capacity, or switch to growing industrial hemp.
For those farmers that are still operational in Oregon’s licensed system, forecasted conditions for June – the month in which much of the state’s full-term outdoor crop is planted – were not realized. However, it is likely that the actual weather was more favorable than that which was predicted. Previously, a Seasonal Climate Forecast from the state Departments of Agriculture (ODA) and Forestry (ODF) called for a cool and wet June relative to historical average conditions. As is the case with many conventional crops, sodden fields from excessive precipitation can delay planting or stunt the growth of newly transplanted plants.
June’s forecast turned out to be inaccurate, though, as a verification from the same sources acknowledges. Instead of being cool and wet, June in Oregon was generally warmer and drier than normal, particularly in Jackson and Josephine Counties, where much of the state’s outdoor cannabis farming takes place. While scant precipitation necessitates increased irrigation, the ability to control the amount of water being received by vulnerable new plantings could be an advantage for growers in getting their crops off to a good start.