For most of the world, 2020 is shaping up to be one of the most challenging years in recent history. But for Oregon's legal weed industry, this year has turned out to be a record high.
Since March, the Beaver State’s adult-use industry has broken its previous sales records. In March, legal cannabis retailers reported a record $84.5 million in sales. The majority of these sales occurred in a wave of panic buying as news of the coronavirus and quarantine measures began to spread throughout the country, but sales dropped off immediately afterwards.
"It seemed like there was a bunch of panic buying right up until the Stay Home, Save Lives order," said Tyson Hawarth, owner of Oregon's Finest, to Willamette Week in early April. "And then, as soon as that officially took place, we saw sales take a nosedive. Since then it's been very, very slow."
Retailers expected sales to slump after the initial wave of panic buying, but they actually increased even further. Like most other states, Oregon declared that legal weed stores could remain open during the lockdown, and residents continued to buy weed in bulk. In April, sales climbed to $89 million, breaking March's record. And last month, sales climbed 15 percent to $103 million, breaking the $100 million barrier for the first time in state history.
In the middle of May, Oregon began the process of re-opening businesses on a county-by-county basis. It remains to be seen whether sales will decline now that people are returning to work and anxieties about the virus and unemployment begin to subside.
But even if sales return to 2019 levels from here on out, this will still be a banner year for the state's cannabis industry. Last month's sales figures mark a 60 percent increase over May 2019 sales. In April, the Oregon Liquor Control Commission (OLCC) projected that the state would collect $9 million more weed tax revenue than they predicted this year. And that calculation came before May's record sales, so the total tax windfall is likely to be even higher.
“Some of the increases in sales of usable marijuana are in part due to rising prices, but underlying demand is up as well,” explained OLCC economists, the Portland Business Journal reports. “The increase in sales for other marijuana products, like concentrates, edibles, and the like, are due to significant gains in consumer demand as prices are flat or down.”
Economists believe this might be the highest peak of the state's legal weed industry, and predict that sales will decline between 2021 and 2023. “Over the extended forecast horizon, marijuana sales are reduced approximately 5 percent relative to the previous forecast due to the lower economic outlook,” the OLCC wrote. “A relatively smaller population indicates fewer potential customers and lower total personal income than previously assumed indicates less consumer demand, all things being equal.”
Although other states have not matched Oregon's record sales figures, most legal-weed states also saw a boost in adult-use or medical pot sales during the quarantine. Illinois' adult-use industry, which just started selling weed in January, sold $37 million of legal weed in April, and Oklahoma's robust medical marijuana industry moved $73 million of product that same month. The only notable outlier is Massachusetts, which temporarily banned adult-use cannabis sales during the start of quarantine.