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Oregon’s Medical Marijuana Industry Slumps As Recreational Market Booms

Since the start of 2017, over 200 medical dispensaries in Oregon have either closed or transitioned to recreational sales.

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Recreational cannabis in Oregon was first legalized back in 2014, and while the overall market has grown immensely over since then, the medical side of the marijuana industry seems to have gotten the short end of the stick. Since the two sectors were officially split up last January, over 200 medical dispensaries have either shut down or shifted their focus towards recreational sales. 

Overall, the recreational takeover has led to an 84 percent decline in the number of medical dispensaries. The patient count has also seen an increasingly sharp decline since adult-use became fully legalized. This can likely be attributed to the fact that viable patients must renew their medical marijuana cards every year. 

While dispensaries have been allowed to sell recreational cannabis since October 2015, the transitional period ended at the start of this year, requiring medical entities to obtain recreational licenses to continue serving the budding adult-use market. While it might seem like a no brainer for dispensaries to get involved in legal market, some patients are potentially deterred from purchasing medical marijuana at a recreational storefront. 

However, out of the 436 licensed retail stores in Oregon, 60 percent of them are also authorized to sell medical-grade cannabis product. These hybrid shops are clearly attempting to capitalize on both markets, and the discrepancies in the customer base show exactly why dispensaries are interested in serving the recreational market. 

At the moment, statistics show that dispensaries are selling to around 65,000 patients, while the adult-use market has an estimated 440,000 in-state customers. But in 2016, Oregon received nearly 2,000 applications to open recreational cannabis companies. With the apparent overflow of businesses, medical dispensaries could find more success catering solely to patients. 

Not only do medical users generally require products with higher potency, they also purchased more product per transaction. Through the second-half of 2016, the average Oregon patient purchased 7.5 grams per visit, nearly four times that of the recreational customer.  

When it comes down to it, businesses on both the medical and recreational side integral parts of the growing cannabis bubble, and those who prevail will likely do so through offering higher-grade product, impeccable customer service and convenient locations. As the marijuana industry becomes more viable and more socially acceptable, competition will continue to blossom in the Beaver State.             

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