June 3, 2019

Flower and Trim Used by Oregon Processors Exceeding 80k Pounds Per Month in 2019


The amount of unsold “usable marijuana” in the Oregon state Cannabis Tracking System (CTS) amounted to over 950,000 pounds as of the beginning of May. That figure is down from in excess of 1.35 million pounds documented as unsold at the beginning of 2019.

Based on those figures, roughly 400,000 pounds of usable marijuana has been sold or processed into other products from the opening of 2019 through the beginning of May, or roughly 100,000 pounds per month. Given that new supply has of course continually been generated throughout this year, the volume of usable marijuana sold or processed is almost certainly larger. In any case, state data shows that the rate at which dried plant material is being sold or processed in Oregon’s market has picked up sharply compared to last year.

The state Liquor Control Commission (OLCC) first released sales, production and inventory data in July 2018, when about 875,000 pounds of usable marijuana was reported. That figure contracted to roughly 825,000 pounds in the next update two months later, in September 2018, indicating that retailers and processors were churning through at least 25,000 pounds of plant material monthly at the time. Statewide inventories expanded by the next update in December 2018 due to the fall harvest.

From July through September 2018, Oregon retailers sold around 16,500 pounds of usable cannabis monthly. This suggests that processors were using over 8,500 pounds monthly for extraction and product manufacturing, given the drawdown on the state’s unsold inventory figures noted just above.

The OLCC’s data shows that retailers sold about 51,000 pounds of usable marijuana in Q1 2019, or an average of 17,000 pounds monthly in that period. As inventory figures show at least 100,000 pounds of flower and trim being drawn down from the state’s collective inventory monthly in the same period, then processors likely used an average of over 83,000 pounds of inventory each month in the first quarter of this year.

The above analysis suggests that the amount of flower and trim devoted to processing in Oregon in Q1 2019 is up by around ten times compared to Q3 2018. This could explain the very high relative volumes of outdoor product that have been observed in Oregon this year, along with the attendant drop in wholesale prices. Meanwhile, the number of units of concentrates and extracts sold in March 2019 was up by about 30% compared to that moved by retailers in September 2018, while units of edibles sold monthly increased by roughly 25% in the same span.

Consequently, it appears that much of the production of Oregon’s processors is being stockpiled for sale at a later date. Indeed, as of May 2019, about 125,000 pounds of extracts and concentrates were logged as unsold in Oregon’s CTS, up from just 25,000 as of September 2018, a massive increase given that such products are generally sold in half-gram or gram increments. The continuation of such behavior, which necessitates the trading of significant volumes of plant material for extraction, will likely continue to hold wholesale prices at low levels, even as retail revenue and sales volume figures set new records in March.