cloudseeder
New member
First I'd like to say thank you to everyone in advance. I appreciate all perspectives and views.
For the past several years cannabis production in Oregon has largely been in the hands of individuals (pseudo small businesses), most of which operated without regulation, or without paying taxes. With legalization and associated regulation and taxation it's probable that many of those small businesses will fail. Replaced by big companies run by people who already have an economic advantage in society. Now that cannabis is legal in Oregon how will production change, or will it?
Just a little background. With a government issued license it's now legal to grow up to 10k sq. ft. indoor or 40k sq. ft. outdoor. There is no current restriction on the number of licenses the state will issue. Oregon offers licensees full vertical integration (producer, processor and retail). Southern Oregon offers an excellent climate for outdoor grown cannabis.
Indoor vs. Outdoor
---------------------
Which form of production do you think will succeed? Indoor, outdoor or hybrid? This should be fun. The issue seems to come down to quality vs. cost of production. One side says you can't grow great cannabis outdoors. The other side says the indoor guys are energy sucking pigs that need to be replaced with more sustainable growing practices.
The perceived, or real, quality differences between indoor and outdoor grown cannabis debate dates back to some of my earliest issues of High Times (the 70's). Some say the market will demand pampered indoor and that outdoor will disappear, or be used for oil. Others are of the opinion that pure economics will win and outdoor will push indoor out of the market. Can quality craft cannabis be grown outdoors? Not in a high tech DLI augmented greenhouse. As soon as you add supplemental lighting to a greenhouse you are considered an indoor grower and limited to 10k sq. ft.
Oregon Cannabis Market
----------------------------
Oregon is a small market. Estimates are around 1.37 millions ounces annual. That number was based on an average use formula that has proven to be inaccurate (low). It turns out that heavy smokers account for significantly more (70%) of the over-all consumption. CO missed consumption estimates by 30 to 110%. Even so, if we add another 50% for high use consumers annual demand is still just around 2 million ounces.
Current Estimated OR Medical Cannabis Production
---------------------------------------------------------
Given the number of registered patients and grow sites in the current medical marijuana program I estimate those growers currently exceed the demands of the entire state by 3 to 4 times. Even as patients migrate to the legal market the grey market will persist for many years. Some estimates state that the grey market will still command 60% of their current black market in 3 years.
Even though many medical growers will go out of business, many will make the transition to the legal market or go underground. But even if all of them went out of business it wouldn't take many legal grow ops to supply the demand of all of OR, tourists and commuters. Depending on the ratio of indoor to outdoor, it's estimated to be 80/20 now, it won't take that many 1 acre farms or 10k indoor grow ops to supply the expected demand.
Consumers
-------------
What are consumers buying now? I surveyed the local retail cannabis shops in Portland last weekend and found shops selling both indoor and outdoor. Only one shop advertised "sun grown", the others were nice enough to help in my research but told me they don't market the product as indoor or outdoor. An informal survey indicates consumers are currently "buying the numbers". They buy based on cost (lowest) or THC/CBD (highest).
After studying and pondering these questions, and many more, over the last year I thought I ask what the world thinks.
Which producer do you think will be most successful, indoor, outdoor or both?
Will Oregon end up with a micro craft cannabis market, like our awesome micro craft beer market? Or, like is happening in CO will the small producers be pushed out of the market? New legislation was introduced last week that would allow medical patients to contract with recreational growers. Reading between the lines, that allows existing medical growers an easy transition to the legal market. But how many of these players will remain in a highly regulated market 3 years from now?
I look forward to hearing your views.
For the past several years cannabis production in Oregon has largely been in the hands of individuals (pseudo small businesses), most of which operated without regulation, or without paying taxes. With legalization and associated regulation and taxation it's probable that many of those small businesses will fail. Replaced by big companies run by people who already have an economic advantage in society. Now that cannabis is legal in Oregon how will production change, or will it?
Just a little background. With a government issued license it's now legal to grow up to 10k sq. ft. indoor or 40k sq. ft. outdoor. There is no current restriction on the number of licenses the state will issue. Oregon offers licensees full vertical integration (producer, processor and retail). Southern Oregon offers an excellent climate for outdoor grown cannabis.
Indoor vs. Outdoor
---------------------
Which form of production do you think will succeed? Indoor, outdoor or hybrid? This should be fun. The issue seems to come down to quality vs. cost of production. One side says you can't grow great cannabis outdoors. The other side says the indoor guys are energy sucking pigs that need to be replaced with more sustainable growing practices.
The perceived, or real, quality differences between indoor and outdoor grown cannabis debate dates back to some of my earliest issues of High Times (the 70's). Some say the market will demand pampered indoor and that outdoor will disappear, or be used for oil. Others are of the opinion that pure economics will win and outdoor will push indoor out of the market. Can quality craft cannabis be grown outdoors? Not in a high tech DLI augmented greenhouse. As soon as you add supplemental lighting to a greenhouse you are considered an indoor grower and limited to 10k sq. ft.
Oregon Cannabis Market
----------------------------
Oregon is a small market. Estimates are around 1.37 millions ounces annual. That number was based on an average use formula that has proven to be inaccurate (low). It turns out that heavy smokers account for significantly more (70%) of the over-all consumption. CO missed consumption estimates by 30 to 110%. Even so, if we add another 50% for high use consumers annual demand is still just around 2 million ounces.
Current Estimated OR Medical Cannabis Production
---------------------------------------------------------
Given the number of registered patients and grow sites in the current medical marijuana program I estimate those growers currently exceed the demands of the entire state by 3 to 4 times. Even as patients migrate to the legal market the grey market will persist for many years. Some estimates state that the grey market will still command 60% of their current black market in 3 years.
Even though many medical growers will go out of business, many will make the transition to the legal market or go underground. But even if all of them went out of business it wouldn't take many legal grow ops to supply the demand of all of OR, tourists and commuters. Depending on the ratio of indoor to outdoor, it's estimated to be 80/20 now, it won't take that many 1 acre farms or 10k indoor grow ops to supply the expected demand.
Consumers
-------------
What are consumers buying now? I surveyed the local retail cannabis shops in Portland last weekend and found shops selling both indoor and outdoor. Only one shop advertised "sun grown", the others were nice enough to help in my research but told me they don't market the product as indoor or outdoor. An informal survey indicates consumers are currently "buying the numbers". They buy based on cost (lowest) or THC/CBD (highest).
After studying and pondering these questions, and many more, over the last year I thought I ask what the world thinks.
Which producer do you think will be most successful, indoor, outdoor or both?
Will Oregon end up with a micro craft cannabis market, like our awesome micro craft beer market? Or, like is happening in CO will the small producers be pushed out of the market? New legislation was introduced last week that would allow medical patients to contract with recreational growers. Reading between the lines, that allows existing medical growers an easy transition to the legal market. But how many of these players will remain in a highly regulated market 3 years from now?
I look forward to hearing your views.
.
