Oregon Coast High On Marijuana Sales

Photo Credit: Colin Murphey

With their lower populations and higher rates of tourism, North Coast counties sold some of the most marijuana per capita in Oregon last year.

The 14 licensed marijuana retailers in Clatsop County sold more than $8 million in products last year, part of the nearly $520 million sold statewide. The industry has grown to employ more than 12,000 people, while the state has raked in more than $100 million in tax revenue.

There were six marijuana retailers in Astoria, four in Seaside, one in Cannon Beach, two along U.S. Highway 26 and one in Westport — more than 1 for every 2,800 people. Combined sales equaled $208 per person, the sixth-highest rate in the state during the first full year of recreational sales regulated by the Oregon Liquor Control Commission.

Tillamook County ranked fifth, selling $5.6 million in marijuana products, equal to $214 per person. Lincoln County came in third, at $13.6 million, $284 per person.

Stephanie Schlip, who manages Oasis Cannabis locations in Newberg, Monmouth and Seaside, said her sales on the Oregon Coast will often outstrip those in the Willamette Valley by 25 percent in the summer and lag behind in winter.

“I would say about 1 out of every 20 customers say they’re from another state, and they’ve never been in a dispensary,” she said.

Many were Californians before that state recently legalized recreational sales, she said, Many were from Idaho, the only state bordering Oregon where recreational marijuana is illegal.

Curry County, on the border with California, ranked second in sales per capita, selling $310 worth of marijuana per person. Rural Baker County, with 16,750 residents and across the border from more than 600,000 people in Idaho’s Treasure Valley, sold $16 million worth of marijuana last year, or $960 per person. Multnomah County sold $176 million in marijuana products last year, or $220 per person, the fourth-highest rate statewide.

“I think it’s just the beginning,” said Don Morse, director of the Oregon Cannabis Business Council, a trade association. “I think sales are going to increase, and they’ll certainly get a lot higher as we take away from the black market.”

But Morse and others see consolidation coming among the more than 500 retailers and 900 growers statewide.

A presentation by New Frontier Data economist Beau Whitney noted the industry was reaching saturation. Retailers need about $125,000 in monthly sales to be viable, but are averaging $92,000 a month in Oregon, leaving them in distress.

Part of the issue is too much marijuana being produced. The estimated maximum canopy being used by growers has gone from less than 10 million square feet in 2015 to more than 20 million square feet, Whitney said. Between October 2016, when recreational sales started, and November, the retail price of a pound of marijuana dropped from $4,440 to less than $3,000.

“It’s no surprise to me that there’s excess supply, or that prices are plummeting,” Whitney said, adding many growers are trying to get bought out.

Whitney has suggested retailers lower their prices to take price-conscious consumers away from the black market.

“In general, for every 1 percent or so reduction in price … you’ll increase your demand by 2 to 3 percent,” he said. “That’s conversion over from the illicit market.”

The marijuana industry is also trying to tackle other regulatory hurdles, such as finding bankers to handle money and places to legally smoke outside of the home.

The Oregon Cannabis Business Council is planning legislation for the next session on social-use areas for cannabis, Morse said. A couple of cannabis clubs in Portland allow consumption, but are technically still illegal.

One issue, Morse said, is the state’s Indoor Clean Air Act. “We don’t even allow cigar bars, unless they were grandfathered in,” he said.

North Fork 53, a farm and lodging on the Nehalem River in southern Clatsop County, had provided space and paraphernalia. But the business ended the practice amid difficulties turning a profit and creating spaces that complied with air quality standards.

On banking, the marijuana industry needs to show the state how much it is potentially losing in taxable income by businesses having to depend on cash.

“There’s a lot of money floating around,” Morse said.