Oregon's Pot glut

[pwd72s]

https://www.wweek.com/news/2018/04/22/how-oregon-grew-1-1-million-pounds-of-pot-and-why-that-bountiful-harvest-is-dangerous-for-legal-cannabis/


"Oregon grew too much weed.
The state database showed 1.1 million pounds of cannabis flower in February. That's more than state consumers smoke, vaped or swallowed on the legal market in all of 2017."







That's a basic supply-and-demand problem—and with a glut of product, the prices for legal weed have crashed. That's putting cannabis growers and retailers out of business

[GH85Carrera]

Basic supply and demand applies to all products. I really can't care at all if some weed retailers go out of business. No more than a liquor store, I just can't care less.

[speeder]

I think that Stevie Wonder saw this one coming.

[pwd72s]

Read the full WW article...I chuckled my way through it. Yep, supply and demand.

[john70t]

I'd think they would find a way to lab process it medically to sell nationwide.
Tons of card carriers out there.

Until it's the price of sunshine and dirt and water..it's overvalued.

[id10t]

Originally Posted by john70t

I'd think they would find a way to lab process it medically to sell nationwide.
Tons of card carriers out there.

Until it's the price of sunshine and dirt and water..it's overvalued.

Issue is crossing state lines, which puts the Feds in charge, and it is still on the federal naughty list

[GH85Carrera]

I don't care if it was free, and they delivered a kilo of it to every house. Mine would go on the compost heap unused. Just my preference, if you want to suck smoke into your lungs do it in private and somewhere where I don't have to smell the stinkweed.

[gtc]

Interesting article, and echos what i have heard from people in that industry in WA. Basically, VC flooded the market, drove prices down, and is putting the mom and pops out of business.
The good business to be in now seems to be the support industry... One engineer I met recently makes some decent money designing vape pens and such.
I wonder if the million pounds of pot can be processed in to something shelf stable, for edibles or other means of consumption.

[jyl]

Everyone should have seen this coming. There was a "pot gold rush" mentality for awhile, people opening pot retail shops everywhere and industrial space being gobbled up for grow space. But just look north and you could have seen how the Washington pot market went boom then bust, and then a little checking would have shown that Oregon was making the same mistakes, which was essentially that too many grower licenses were being issued. Now pot retail shops are really struggling, even with the latest trend of edibles giving them something to sell other than commodity bud. Independents are being forced to sell to chains and small chains are under strain.

The current bubble is in the pot stocks, where investors have somehow convinced themselves that an unprofitable business is better if you do a lot more of it.

I think there is a sustainable business in pot, but it'll be like any other consumer good - you have to have a branded product that you can market as having some distinctive appeal, thus transforming $0.10 of commodity weed into $1.00 of retail product. There is no reason that pot farming should ultimately be a more lucrative, stable or cash-flow positive business than, say, tomato or soybean farming, or if you're optimistic, growing commodity wine grapes. Or for pot retailing to be more lucrative than retail stores selling beer and cigarettes. The money will be in value-added processing of the commodity pot into the end product and especially branded product.

I expect the industry is, or should be, working hard on developing marketing and branding strategies. Youtube influencers to the rescue?

[varmint]

according to the last hippy i talked to the surplus can be turned into bio diesel, paper and tampons.

[Sooner or later]

1.1 million pounds? I think I smoked that much in the 70's

[GH85Carrera]

Oklahoma just legalized "medicinal" pot and about all you have to do is say you have some ache or pain and they will give out a prescription. There was a "gold" rush to open the first stores and begin grow operations.

And of course the taxes were going to solve all the problems, just like the lottery, casino gambling, and horse racing.

There are CBD stores everywhere.

I have little doubt in a few years we will have the same glut. As long as we don't do a government bailout I don't care.

[varmint]

my town, 7000 people, has four weed stores just outside city limits.

[LWJ]

Funny. I have been calling gold rush since the beginning. Bunch of stoners wanted to turn a hobby into a career.

I think the prices are super cheap here. I'm not a user so I wouldn't know.

Found this for the curious:

Oregon Weed Prices for 1 Gram to 1 Pound

[Sooner or later]

Originally Posted by GH85Carrera

Oklahoma just legalized "medicinal" pot and about all you have to do is say you have some ache or pain and they will give out a prescription. There was a "gold" rush to open the first stores and begin grow operations.

And of course the taxes were going to solve all the problems, just like the lottery, casino gambling, and horse racing.

There are CBD stores everywhere.

I have little doubt in a few years we will have the same glut. As long as we don't do a government bailout I don't care.

There is one on every street corner here. One of the local growers is filming a documentary.



LAWTON, OK (TNN) - A Lawton medical marijuana business is under construction, and under the lens, as the process is being documented for a television series.

The pilot season for Wolfe’s House of Weed is currently being filmed. The first episode is gaining some attention, as it won an award at an international film festival!

“Wolfe’s House of Weed was just a joke a few years ago and it just kept on going," said Rick Wolfe, owner of Nature’s Meds and Wolfe’s House of Weed. "But after the first episode, Dr. Jenkins edited it and sent it to me. Instead of putting it on YouTube, I sent it to some film festivals, and the Calcutta Film Festival has picked it up as a International Award Winning TV Series or a Pilot Program. So, we won for the month of April. Now it qualifies us to go in January for their red carpet gala to possibly be selected as number one for the year.”

Wolfe hired a production team made up of Cameron University students and a professor to film the pilot season of Wolfe’s House of Weed, a television program based on the development of his medical marijuana business, Nature’s Meds. The show follows Wolfe, his family, and staff, as they deal with construction, funding issues, and growing the medical marijuana.

[Sooner or later]

The building they are using is pretty damn big. Right on I 44 and across the street from an Indian casino. For a laugh look up Wolf's House of Weed on YouTube.

[GH85Carrera]

Originally Posted by varmint

my town, 7000 people, has four weed stores just outside city limits.

Back when I was just a kid we lived in San Marcos, TX for a year. It was a dry county, so my dad had to drive just across the county line to the liquor store. It was owned my the sheriff and the priest of the county we lived in. The standard joke was when you were there you never acknowledge other locals that were there. Many of San Marcos hypocrites went there to get the "medicinal purpose only" wines and spirits.

[jyl]

Listed US pot companies' shares are trading on the Canadian exchange (where they have to list, since pot remains a federal controlled substance) for 20X to 72X times revenue. Listed Canadian pots companies' shares are trading on the US exchanges (where they preferred to list, due to far greater investor volume) for even higher valuations.

I'm sorry, but to trade at those valuations, a company needs to have 1) huge future growth in both the near-term and long-term, 2) very high future profitability, 3) impressive barriers to entry and overwhelming competitive advantages.

The highest price to sales for Facebook (FB) was about 25X, for Google (GOOG) 8X, Alibaba (BABA) 29X.

[KFC911]

Pot gluts will yield pot guts...

Tubby Slim

[Sooner or later]

I've been slowly buying Aphria since the first of the year. Hope my investment doesn't go up in smoke...