+ 0.00
+ 0%
+ 0.02
+ 0.01%
+ 0.02
+ 0%
+ 0.00
+ 0%
+ 0.00
+ 0%

Oregon's Cannabis Market: What Investors And Entrepreneurs Need To Know

June 10, 2021 10:23 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Oregon's Cannabis Market: What Investors And Entrepreneurs Need To Know

Oregon's cannabis market offers examples of industry pain points, as well as the ability to innovate and mature.

Investors and entrepreneurs may want to be wary of the hyper-competitive market. However, if recent trends hold, Oregon may be turning towards prosperous times.

April 2021 data from the Oregon Liquor Control Commission (OLCC) revealed that the state sold over $105 million in cannabis products in May 2021. In March and April, the state sold approximately $109 million and $110 million, respectively.

The figures mark significant gains for Oregon, which saw sales surpass $70 million per month at the start of the pandemic.

The state is known for its mostly smaller vendors and uncapped market. 2021 data from the Portland Business Journal lists cannabis brands Nectar Markets LLCGolden Leaf Hldgs Ltd (OTC: GLDFF) and Halo Collective Inc (OTC: HCANF) as leaders in statewide employment operating locations.

Golden Leaf CEO Jeff Yapp called Oregon the bellwether state for cannabis.

"It has been and continues to be a leader in product innovation, and the quality of our growing regions making it the primary cultivation market in the country," said Yapp.

Yapp credited the state's pro-cannabis congressional team for fighting to advance cannabis reform on the federal level.

Mature Market Supported By Innovation And Healthy Consumption

Kevin Hogan, president and co-founder of craft brand Oregrown, recognizes the state's long-running operators as industry examples.

"Mature markets like Oregon have battle-tested operators equipped with the experience and innovative edge necessary to compete in any market," Hogan said.

In 2019, Oregon State University launched its Global Hemp Innovation Center to advance hemp research.

Hogan said the state's innovative nature stems from its hyper-competitive market.

"We are at the forefront of product innovation and quality, giving us a competitive advantage over limited-license operators as more states open up and federal legalization occurs."

Judson Hill, VP of business at cannabis industry licensed lender Bespoke Financial, said the state's maturity allowed for the formation of solid operators and market leaders.

"These businesses have already had time to prove themselves and thus have proven themselves reliable as an investment," Hill elaborated.

Hill added that investors should "pick an already established business since they have the luxury of time and knowledge…a profitable operator looking to expand versus a startup opportunity."

A Competitive, Surplus-Saddled Market Some Experts Say To Steer Clear Of

Despite the innovation and a healthy consumption rate among the public, some operators say competition and surpluses continue to cause concern. 

The state has long suffered from a surplus of cannabis. Others pushed back on the severity of the situation. 

Jesce Horton, CEO of Portland-based cultivation brand LOWD, said that much of the news was sensationalized. He noted that the numbers were based on wet weight, making the surplus appear more substantial.

"When you think about dry cannabis versus wet cannabis, weight can vary, maybe, 5- to 10%," he said. Horton, a co-founder of the Minority Cannabis Business Association, said the reports limited his company's ability to secure business and funding at times.

Hill added that the combination of numerous licensed operators and a small population limit the market as well. Oregon ranked 27th in population with 4.2 million citizens, according to 2017 census data.

Damon Bates, a senior strategic business advisor for cannabis consulting firm GPS, compared the state's market to flash paper, saying it burnt hot and was quickly gone. However, the pandemic led to a market spike and stabilization.

Despite the spike, he believes this year's investment opportunities lie in discount equipment acquisition and curing, extraction, harvesting and trimming operations.

"Or, in other words, look elsewhere," Bates said.



Photo provided by Steve Morgan, Wiki Creative Commons

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.

Related Articles

Why Cannabis Operators Expect Record 420 Despite Coronavirus Concerns

The high holy day of pot is almost here and ready to shake off the rust from last year. April 20, the most celebrated day in cannabis, is usually marked with copious amounts of pot.  Last year, the online marketplace I Heart Jane saw a 35% sales increase the week of 420 versus a typical sales week. read more

The Week In Cannabis: Stocks Trade Up On Federal Bill (MORE Act), Earnings, Big M&A

Cannabis stocks traded up this week, aided by strong earnings reports, big M&A announcements and the reintroduction of the Marijuana Opportunity Reinvestment and Expungement Act (MORE) into Congress, after the previous year's version failed to pass the Senate. read more

Chalice Brands Shares Crash On Record Q1 Revenues Of $5.5M, Positive Adjusted EBITDA, Higher Net Loss

Chalice Brands, previously operating under the name Golden Leaf Holdings Ltd. (CSE: CHAL) (OTCQB: GLDFF) on Monday released its first-quarter earnings with record revenue of $5.5 million, up by 18% year-over-year. read more

The Week In Cannabis: Earnings, Financings, M&A, Cookies U, DEA, DJ Khaled, And More

In an earnings-heavy week, cannabis stocks experienced considerable volatility. read more