Thor Benson / Cannabis News Box Contributor

With some states, including California, dealing with the issue of perhaps not having enough cannabis to meet market demands, it would seem Oregon has the opposite problem. According to multiple reports, the state is producing about three times as much cannabis as it needs. Unfortunately, that means much of this cannabis is ending up on the black market.

“My opinion is that the overproduction, in the legal system, is hurt by the fact that the black market is thriving,” Don Morse, chairman of the Oregon Cannabis Business Council, told Cannabis News Box. “Customers are not [always] going into the dispensaries, they’re buying from their neighbor or whoever else at lower prices and [getting] untested products.”

Morse said this is taking away sales from dispensaries, which he thinks is bad for Oregon’s legal market in many ways. He doesn’t think there would be so much overproduction if there wasn’t a lot of black market activity happening in the state. It appears some of the overproduction is being sent out of state, according to Morse, through the black market. That in itself creates some problematic legal issues and other dangers.

“We’ve asked for law enforcement to start cracking down on people who are unlicensed, with the [Oregon Liquor Control Commission] or the Oregon Health Authority,” Morse said. “They’re working on it, but the sad part is there are no financial resources for the sheriffs or state police or  whoever we want to task with the job. There’s no money for them.”

Though Oregon is collecting millions of dollars in taxes from its cannabis industry, that money isn’t going to tackling the black market issue. As long as the black market has cheaper products, people are going to keep buying from those who are not licensed.

“The cost of compliance for a legal operation is very, very high, and there’s a lot involved, so by the time the product hits the market in a dispensary, it can’t compete price-wise with the black market,” Morse said. However, he doesn’t believe the solution to the black market issue is to simply lower compliance costs, because he thinks many of the things that are required of a legal business are necessary for a strong legal cannabis system.

Oregon lawmakers are taking this problem seriously, and it appears they’ll be putting out various proposals for how to fix it soon. Whether that means using some of the tax money cannabis generates to tackle the black market or not remains to be seen.