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The Oregon Liquor and Cannabis Commission (OLCC) recently issued sales data for January 2022. Overall sales came in at $83.6 million, 6% lower than the (upwardly adjusted) $89 million figure from December 2021 and down 16.7% from January 2021’s $100.4 million.
Oregon’s unemployment rate dropped again in December, to 4.1%, a 2.2% year-on-year decrease. Moreover, government supplemental unemployment payments have run out as have payments to families with children, so employees are back to relying on just wages, which have been adversely impacted by decades-high inflation. The Consumer Price Index showed prices climbed 7.5% in January 2021. Consumer Goods Spending (personal consumption expenditures) fell 0.6% in December, which showed up in a 1.9% drop in Retail Sales data for December.
Oregon cannabis sales are now at the lowest level since March 2020, a not unexpected reversion to pre-pandemic levels. Indeed, the 2020 pandemic year may ultimately be seen as an anomaly in reference to cannabis price and demand.
January adult use sales fell by 5.9% to $77.8 million from $82.7 million in December 2021. They are also down 15.2% year-on-year. Adult use sales are likewise down to levels not seen since March 2020.
Medical sales fell 8.2% month-on-month to $5.8 million from December’s $6.3 million. Year-on-year, medical sales are off by 33% from $8.7 million in January 2021. The last time medical sales were at this level was in January 2020.
Month-on-month changes in retail sale revenue for OLCC’s product categories are as follows:
Usable Marijuana (flower, trim, pre-rolls) fell just over 5% to $43 million in January 2022 versus $45.3 million in December 2021. The market share of usable marijuana fell 1.2% month-on-month to 55.3% in January 2022.
Concentrates and extracts generated $21 million in January 2022, down 6.2% from $22.5 million in December 2021. Concentrates and extracts made up 27% of sales, a 1.8% increase over the 25.2% percentage of sales accounted for by this category in December.
Edibles and tinctures sales were $10.6 million in January 2022, a 7% drop from $11.5 million in December 2021. Edibles and tinctures made up 13.6% of total sales in January 2022, up 0.8% from December 2021.
Monthly harvest data show a 10.3% drop to 251,240 pounds of wet weight in January 2022 versus 280,108 pounds in December 2021. Year-on-year, however, January 2022 harvest volume is up 4.4%, indicating that non-outdoor production is continuing to expand, although not at the pace observed last year, even as the market is swamped with supply.
Oregon spot market prices have continued in a downward spiral that began in earnest in mid-June 2021. Outdoor grown flower prices fell 26.9% between mid-May 2021 and August 2021, followed by a period of price consolidation from mid-August to mid-September. Harvest season saw prices drop another 20% at the end of October. In short, the summer sell-off was exacerbated by the seasonal harvest effect, which was then followed by the news that the state’s outdoor harvest volume increased over 50% year-on-year.
Greenhouse and indoor flower prices peaked in mid-July, after outdoor prices peaked in May 2021, illustrating the contagion effects of massive outdoor inventory on other grow types.
For a more granular view on Oregon markets, Cannabis Benchmarks spoke with Casey Houlihan, Executive Director of the Oregon Retailers of Cannabis Association.
Houlihan sees prices continue to deteriorate; he noted “there was no real holiday demand” last year. He sees outdoor flower under constant price pressure and noted that selling to extractors “is the only option” for much of the outdoor grown market. He understands outdoor growers need to cater to the extraction market due to the size of demand and the ease of payment.
That said, he has noticed a move away from vape products; he blamed dwindling demand on both the lingering effects of the “vape scare” of 2019, as well as the significantly lower price of outdoor flower, saying “flower is so inexpensive compared to vape products.” Houlihan also noted consumers are feeling pressure due to the lack of federal subsidies that ended last year – namely, enhanced unemployment payments and the child tax credit – and are thus seeking out inexpensive smokable cannabis. He also noted consumer interest in “rosin style” concentrates versus butane extractions but pointed out that the former are a more expensive product.
On the legislative front, Houlihan sees the two-year license moratorium on cultivation, production, and retail licenses as a much needed break in the Oregon markets, though he noted he is not necessarily for government control of markets. He said the issue is contentious with some smaller retail shops because they will have to delay expansion plans should the moratorium pass. Houlihan is confident the moratorium will pass the legislature in the first week of March and hopes it will be a lifeline for licensed cannabis businesses, especially small growers.