When Oregon’s recreational marijuana program launched in 2016, the state chose not to limit the number of cultivation licenses that would be awarded. It also opted not to limit the amount of cannabis that each licensed cultivator could grow. Over the first 12 months of adult-use sales, the state issued licenses and expanded the industry.
Things were going fairly smoothly until the 2017 cannabis harvest brought in more than 1 million pounds of cannabis. For a state with just 4.1 million residents who purchased one-third of that amount in 2016, it became clear quite quickly that Oregon’s cultivators had grown more cannabis than the state’s retailers could sell. As a result, prices for legal marijuana dropped.
Unfortunately, the state didn’t learn from its mistake and the 2018 harvest brought 5% more cannabis than what was harvested in 2017. An even bigger surplus caused prices to plummet further, and many licensed growers were forced to go out of business or sell their licenses to larger companies with deeper pockets at extremely deep discounts. Those big companies could withstand price drops while smaller licensees cannot.
One of the biggest problems Oregon faces as a result of its cannabis oversupply problem is exactly the opposite of what its lawmakers wanted to happen when the recreational marijuana program was developed – many growers returned to the black market where they could still sell cannabis for a profit.
Possible Solutions to Cannabis Oversupply
As prices continued to fall and the cannabis oversupply problem continued to grow, suggested solutions came from multiple sources. Three options rose to the top as the most commonly cited. First, Oregon could cap the number of cultivation licenses it granted. With a large number of applications waiting to be reviewed and licenses to be granted, the problem with growing too much marijuana was poised to get even worse.
Both Washington and Colorado had some success solving their cannabis oversupply problems when they stopped awarding new licenses. In 2017, Washington had a 60% larger supply of cannabis than it did in 2017, which caused marijuana prices to fall in 2018. Business owners were very vocal about the need for changes to the state’s canopy limits and cultivation facility sizes. The state decided to stop issuing new cultivator licenses to solve the problem.
As the graph from the Cannabiz Media License Database shows, the number of active cultivation licenses in both Washington and Colorado varied by only 1% between January 1, 2018 and December 31, 2018. Contrast that to Oregon where the number of licenses grew by more than 26% during the same time period.
The Oregon Liquor Control Commission (OLCC) argues that only the state’s legislature can create a cap on the number of licenses issued in Oregon, but it did stop reviewing applications and issuing licenses in June 2018. While the OLCC claims the reason is because it had a large backlog of applications, it can also be assumed that the moratorium on issuing new licenses would help to quell the surging supply of cannabis in the state.
The second possible solution to the cannabis oversupply problem in Oregon is to reduce the canopy size for each license. In April 2018, Oregon modified cultivation licensing rules so new cultivators would have more limited canopy space for immature plants than existing cultivators.
The third suggested solution is to do nothing and let the market adjust and correct itself. For the most part, this appears to be the approach that Oregon is taking. While it did implement a rule in 2018 that required cultivators to notify the state of their harvests, which could bring an inspector to verify that the cultivator is adhering to cultivation rules, the state’s cultivators are still in a wait-and-see situation.
What’s Next in Oregon?
The OLCC has been doing research related to its oversupply problem and is expected to present its findings to the Oregon legislature this year. Many people assume placing caps on cultivation licenses will be on the table during those discussions.
In the near future, Oregon’s lawmakers will need to develop a strategy to deal with the oversupply problem, and it will likely include a combination of the suggested solutions. For example, a license or canopy cap and improving accessibility to marijuana products combined with allowing some consolidation to happen in the market should help to curb the oversupply problem.
Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.
Member Spotlight: National Grow Technologies
In this month’s NCIA Member Spotlight, we speak with the team at National Grow Technologies, who offer a variety of services and products to support the cannabis industry. Recently, NGT sold a cannabis flower batching and sorting machine right on the expo floor of NCIA’s Seed To Sale Show to fellow NCIA member The Clinic.
National Grow Technologies
Cannabis Industry sector: Equipment and Consulting
NCIA member since: The NGT founders have been members of NCIA since 2010 through different endeavors. National Grow Technologies has been a member since its formation in 2015.
Tell us a bit about your background in cannabis and how the team at National Grow Technologies came to fruition?
National Grow Technologies‘ background stems out of the formation of the Colorado medical and adult-use cannabis markets. Our team brings 25 years of combined experience in the regulated cannabis industry as well as 50 years of combined horticulture experience. This includes build-out, ownership, and management of multiple dispensaries and full-scale cultivation operations, originating in 2009. We have since been involved in multiple projects, in numerous regulatory states, both nonprofit and for profit.
NGT team: Scott Field, Chandra Carleton, Bruce Granger, and Bill Campbell
From the beginning, the need for regulation was obvious, prompting our involvement at a legislative level. This includes involvement in SB 10-109 and HB 10-1284 as well as the Rule-Making Workshop in 2010. What an exciting, educational experience, helping create the first regulated cannabis market. If we only knew then what we know now.
As you can see, our passion for the cannabis industry runs deep. Through that passion, NGT developed organically, just as we developed our own dispensaries and cultivations. We immediately became involved in the national cannabis market, traveling to cannabis-related events, meeting many people in the industry and trading knowledge. We have always held the belief that “helping someone else learn strengthens our own education.” Through that enlightening experience, our processes to bring a quality commercial product to market were developed. Since that time National Grow Technologies and its partners have been working to help new and exciting businesses develop and refine the quality of their process.
What unique value does NGT offer to the cannabis industry?
National Grow Technologies does not just sell best-in-class equipment such as the GVS Precision Batcher or the GreenBroz trimmer; we also use our extensive experience to ensure that this equipment works for our clients. As the cannabis industry has evolved, many new products have been developed. Not all have effectively executed the operation for which they were designed, or are capable of integrating with commercial processes. Through extensive testing and use of various industry specific machinery, we are able to choose the highest performing equipment on the market. We take great pride in not just supplying this equipment, but also providing the training, services, and process development needed for repeatability of success.
Our training and support is what distinguishes our company. For every piece of equipment we sell, we strive to create an environment capable of its full potential. We realize even the best equipment can have its effectiveness diminished if used incorrectly. That is why NGT offers training programs with every piece of equipment we sell. Once you have successfully completed training and operations begin, the equipment must remain functioning optimally. NGT also has service programs for every piece equipment we sell. We recognize that our success is only possible with yours.
The GVS Precision Batcher, sold to The Clinic on the expo floor at NCIA’s recent Seed To Sale Show
While supporting our clients through the integration and implementation of new equipment, we are aware that changes in process produce ripple effects through other processes or even the Standard Operating Procedures of a facility. Since our inception, we have been fueled by a desire to increase efficiency of cultivation operations, while recognizing the limitations of each facility. We have the skills necessary to refine your process, review plans to assess proposed process, or put processes into SOP documents. We are here to help.
By viewing a facility systemically through its entire manufacturing process and integration of new equipment, NGT assists our clients to optimize production. We do not run cultivations. We help clients run cultivations more efficiently, allowing them to fast-track business execution, while minimizing their financial exposure, creating a quicker ROI.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does NGT help work toward that goal for the greater good of the cannabis industry?
We at National Grow Technologies look to use our experience from helping create a regulated market to educate emerging markets on techniques proven to provide the safe access of cannabis for adults. It is the responsibility of everyone in this industry to engage in business practices that ensure a proper and clean seed-to-sale process designed with the health and safety of consumers as a core principal. Cannabis needs to be handled and processed in a way that is safe for human consumption. This is a process that can be clearly defined, which will align procedures that navigate an increasingly complex set of ever-changing rules and regulations, while remaining true to the value of safe access. Each and every one of us has the responsibility to move this industry to a safe and sustainable position in manufacturing and distribution of cannabis.
Why did you join NCIA? What is the best part about being a member?
Bruce Granger and Chandra Carleton
In 2010, one of the founding NGT members, Bruce Granger, was at the meeting with Aaron Smith when he said that he was going to build a National Cannabis Industry Association. Bruce has been a member ever since, through multiple business endeavors and now with NGT. We have stayed a member of NCIA due to the symmetry of our business models. We are both committed to the education, support, and unification of the industry.
NCIA has always been a resource of knowledge for ourselves and many in the industry, keeping us informed through their newsletters, Quarterly Cannabis Caucasus, and informative speakers at every conference. They have supported the cannabis industry by taking a message of positive reform to Washington, D.C. We will only be able to continue and expand our industry with the education and enlightenment of our political system.
Reconnecting with our friends or meeting new members, the business opportunities abound. In fact, thank you to NCIA for bringing NGT and The Clinic back together at the NCIA Seed to Sale Show this past January 31 – February 1. The Clinic is now the proud owner of the first GVS Precision Batcher in Colorado, a state-of-the-art piece of equipment capable of precise weighting and batching cannabis flower. It is all of these memories of where we came from, and all of the possibilities the future holds that keeps NGT coming back to NCIA.
Note: NCIA member profiles highlight members and stories within our cannabis industry community. They do not constitute an endorsement or recommendation of specific products or services by NCIA.
Member Spotlight: THC Design
To kick off 2017, we’re highlighting NCIA Member THC Design, whom you may have met as a sponsor of some of our Quarterly Cannabis Caucus events in 2016. Seth Hilsabeck, the company’s Chief Operating Officer and Head of Research & Development, tells us a bit more about THC Design, a family-oriented cannabis cultivation company based in California, and what they’ve been up to as a company since launching publicly in 2014.
NCIA Member Member Since: June 2016
Tell us about your background in cannabis and why you joined the team at THC Design?
Seth Hilsabeck, COO & Head of R&D
President/Owner Ryan Jennemann and I both grew up in Oklahoma and have been close friends since grade school. Both of us have had a fondness and passion for cannabis and its many efficacies since being teenagers. Ryan was lucky enough to be taught to grow by his father in their backyard between their tomato plants. Ryan witnessed his father suffer from chronic migraines for as long as he can remember. With little to no access to safe cannabis, Ryan’s father was forced to continue managing his pain with opioid prescription drugs which ultimately lead to his death at the age of 47. Determined to prevent other families from suffering through similar tragedies, Ryan moved to California to spread his wings as an advocate and cultivator in the medicinal cannabis movement.
I was back home quietly using cannabis to alleviate the symptoms of my cerebral palsy. I soon began to take notice of the new legal movements in Colorado, quickly making new friends in the industry. Ryan and I were suddenly reunited back in Oklahoma in late 2013 at a funeral for a close friend of ours who had passed away. We quickly began comparing notes and talking of our passions for the future of cannabis. Soon after, I moved out to California to help with publicly launching THC Design with Ryan in Los Angeles.
What unique value does THC Design offer to the cannabis industry?
We aim to set the standard for advanced cultivation practices and techniques while taking steps to create a self-sustainable operation via renewable energy resources. By partnering with leading scientists in various fields, THC Design hopes to break new ground in the cannabis industry. We are committed to making scientific advances in identifying the roles of not only THC and CBD, but also the dozens of other compounds in cannabis that can potentially benefit patients. This will help us breed better plants that can acutely treat diseases and ailments, all while producing safer quality medicine year in and year out.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does THC Design help work toward that goal for the greater good of the cannabis industry?
THC Design team, Beach Clean-Up with Surf Rider
Building a community and contributing our voice to the cannabis industry is extremely important to our THC Design Family. We support national and local advocacy groups such as NCIA, CCIA, and Americans for Safe Access to address legalization, access, and research of cannabis. We work closely with lawmakers and policy writers to ensure fairness in the ongoing organization and regulation of cannabis in California. Reaching out to the community is a huge part of who we are. Last year we worked with Surf Rider Foundation for a beach clean-up, Midnight Mission to help with their lunch service, and afterwards we hit the streets and passed out over 1,500 fleece blankets to the homeless just in time for the winter chill. Many similar projects are in the pipeline for 2017.
Why did you join NCIA? What’s the best part about being a member?
Joining NCIA is very important to us so that we can remain at the forefront of one of the few national organizations for cannabis advocacy. The network of top companies and individuals involved is a vital part of our efforts to help the cannabis industry in the U.S. grow and to be respected across the globe.
As the seasons change, so does the amount of light that enters into your greenhouse. Summer months may offer an abundance of natural light; however, the longer nights of winter require supplemental lighting for growers to achieve the best yield possible from their crop. Some greenhouse facilities shut down during the winter months due to natural lighting restraints, but there are easy solutions that can mean more harvests and bigger profits for growers. The first step is to target a daily light interval (DLI) number for each facility and design the supplemental light accordingly. This ensures optimal light intensity and uniformity in the facility year-round.
On Site
Recently, Colorado marijuana cultivators have begun to move into more efficient greenhouse structures. With proper planning and execution, these growers are experiencing as much or more success as indoor gardeners. It does take proper planning to get through the short days of the winter, and owners are turning towards horticulture companies to help them succeed. Based on the sun’s position in the geographical region, high tech control systems with DLI sensors can be installed to measure when the natural light falls below a certain level and the supplemental light is needed to optimize growth.
For example, at urban-gro, once we know the facility’s DLI and obstructions within the greenhouse structure, we begin the planning process and consider technical factors for the layout of the lighting system. Ensuring optimal lighting layout for the grow facility is the top priority. Incorporating lights into the structure so they create minimal shadowing is critical; this ensures that the crops are getting the optimal amount of natural light when the sun is shining.
Today, most grow facilities use 1,000-watt DE HPS light fixture, which is the most efficient light source on the market for the plant canopy. Once the lighting system is installed, it is essential that the correct intensity is aligned with the crops’ growth stage, which ranges from veg to bloom. We schedule a gradual increase of light intensity so yield is maximized and never harmed.
End Result
With supplemental lighting, cultivators can guarantee the correct amount of lighting and environmental controls for the winter months to ensure yields and profits.
Shelly Peterson serves as Vice President of Sales for urban-gro for the last three years. Shelly manages the company’s sales force located across the country. Her passion for eco-friendly solutions and creating a sustainable environment ensures that the commercial cultivator is provided with a lighting plan that utilizes the least amount of equipment. Further, her skills learned in the commercial lighting industry have enabled her to work with regional electrical providers to maximize available utility rebates for urban-gro’s customers. Urban-gro is a Sustaining level member of NCIA since November 2014.
Guest Post: Mindful’s Master Cultivator, Philip Hague [Video]
I am very excited and honored to the be a keynote speaker at NCIA’s Cultivation Management Symposium in Seattle, March 16-18. I will be presenting on March 17th, focusing on Operations Management: Production, Processing, and Distribution.
In this video, you will see a brief introduction to our Denver facility, where Rolling Stone said “…if your nose is Snoop Dog-calibrated to sniff out only majority primo herb, you might just end up…“
We are proud of the work we have done in growing the finest quality small-batch medical and recreational cannabis on a large scale with consistency through beyond organic practices. There is a lot to cover and I look forward to presenting what we do and how we have done it. I will start out with the key to any strong operation, genetics, and take you right through our cultivation, harvesting, processing of the highest quality waxes, shatters, hash, live wax, live resin, and on through distribution.
If you have any specific areas on which you would like for me to speak or questions you would like to see answered, please comment here and I will do my best to make sure they are answered at the event. If you would like a private meeting or consultation at the event, please contact erik.williams@bemindful.today.
Phillip Hague, Mindful’s Master Cultivator, is widely recognized as the industry’s highly responsible leader of specialized growing practices. Having grown up working in his family’s twelve-acre greenhouse complex, he possesses a lifetime of horticultural knowledge encompassing large-scale commercial greenhouse production, large commercial landscape projects, and extensive knowledge of commercial farming practices. He understands the intricacies of industrial gardening and mindfully uses that experience to grow the highest quality cannabis with an eye toward honoring, protecting and improving genetics. Winner of numerous awards, including the prestigious Cannabis Cup, Phillip has been featured in a number of articles on the cannabis industry including High Times centerfold feature “The Indoor Acre”, in Rolling Stone Magazine, 60 Minutes, The New York Times, Yahoo News, The Wall Street Journal, in foreign press representing some 45 countries and will soon be featured in National Geographic. Prior to Mindful, Mr. Hague was the Master Grower for Golden Goat/VIP Cannabis and Natural Remedies, where he was responsible for warehouse grows and light grow facilities.
NCIA’s Cultivation Management Symposium is just around the corner!
Join us in Seattle from March 16-18 to learn from experts and pioneers in the field what you need to know to operate a successful cultivation operation while staying on top of emerging trends in the evolving cannabis industry. Register today!NCIA members save $150 on admission.
This three-day conference held at the Bell Harbor International Conference Center will showcase presentations from leaders in the cannabis cultivation arena with industry leaders specializing in sustainable cultivation methods and green business practices to learn how to keep your cannabusiness ahead of the curve while providing a positive example for others to follow.
This site uses cookies. By using this site or closing this notice, you agree to the use of cookies and our privacy policy.
Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.
We aim to set the standard for advanced cultivation practices and techniques while taking steps to create a self-sustainable operation via renewable energy resources. By partnering with leading scientists in various fields, THC Design hopes to break new ground in the cannabis industry. We are committed to making scientific advances in identifying the roles of not only THC and CBD, but also the dozens of other compounds in cannabis that can potentially benefit patients. This will help us breed better plants that can acutely treat diseases and ailments, all while producing safer quality medicine year in and year out.
As the seasons change, so does the amount of light that enters into your greenhouse. Summer months may offer an abundance of natural light; however, the longer nights of winter require supplemental lighting for growers to achieve the best yield possible from their crop. Some greenhouse facilities shut down during the winter months due to natural lighting restraints, but there are easy solutions that can mean more harvests and bigger profits for growers. The first step is to target a daily light interval (DLI) number for each facility and design the supplemental light accordingly. This ensures optimal light intensity and uniformity in the facility year-round. 
For example, at urban-gro, once we know the facility’s DLI and obstructions within the greenhouse structure, we begin the planning process and consider technical factors for the layout of the lighting system. Ensuring optimal lighting layout for the grow facility is the top priority. Incorporating lights into the structure so they create minimal shadowing is critical; this ensures that the crops are getting the optimal amount of natural light when the sun is shining.