In 2022 and the first half of 2023, Canada went through a whopping 611.7 million grams (yeah, that’s 1.3 million pounds) of cannabis dried bud, but not in a fun way. All of the marijuana in question was tossed out by licensed producers as the result of a disparity between how much is grown and how much people use. 

They chucked out nearly 44% more than the 425.3 million grams destroyed last year. According to Health Canada, the reported figures actually only account for the weight of destroyed unpackaged cannabis. This indicates that the total volume of cannabis waste in Canada, including products that had already been packaged, could be much higher, perhaps well exceeding 2 billion grams.

Industry expert and consultant Farrell Miller notes that the majority of this discarded product was destroyed for being too old and having too little THC. “There is no demand for old and low-THC products, so manufacturers of finished products are not buying this biomass as inputs,” she said. “It’s likely low-quality material with no value. “As consumers become more savvy with packaging dates on dried cannabis products, this trend will only continue.”

If the destructive pattern continues at the same alarming rate from July to December 2023, it could mean that Canada’s cannabis industry has already hit the apex of its supply-demand mismatch. So it’s trying to move towards a balance, as wasteful as it is (not to mention awful for the environment). Canada may be the first big nation to legalize adult-use weed back in 2018, but we know now that Canadians aren’t smoking enough to keep up with the supply. MJBizDaily estimates that more than 1.7 billion grams (3.7 million pounds) of unsold and unpackaged dried flower have been thrown out. And this number doesn’t even include the packaged products. Approximately 24 million packages of cannabis products have also met the same fate since 2018.

After Canada legalized recreational cannabis sales, there was a surge in licensed producers excessively cultivating the plant. As a result, from 2017 to around 2020, right before the pandemic hit and during the cannabis stock boom, the focus of analysts and investors was more on the potential production volume promised by cannabis companies rather than on their actual sales figures. This motivated licensees to invest heavily in giant greenhouses. However, the model was not sustainable. These vast cultivation areas generally fell short of delivering the premium, high-THC cannabis that consumers were seeking, highlighting a significant gap between production output and market demand.

Marie Sweeney, a cannabis team adviser at Cannabis License Experts, a consultancy based in Ontario, has also noted that the slew of weed business shutdowns in the industry is part of why they’re destroying so much herb. She notes that bankrupt companies are often forced to get rid of any unsold products if they are not sold off prior to the expiration date of their federal permits.

As per MJBizDaily, Sweeney also says that the new labeling standards for high-THC products are a major issue. While plenty of cannabis users understandably want strong weed, this creates a market surplus of lower THC but still quality cannabis flower. Plenty of wholesalers have policies of rejecting products with less than 20-25% THC. Furthermore, Sweeney points out that many companies don’t have effective business models. These are all problems made worse by the fact that there’s just a rampant overproduction of cannabis.

So what about a solution to this heartbreaking problem of wasted weed? Miller suggests that the Canadian federal government should seek methods to align public policy and regulatory activities more closely with provincial regulators and cannabis license holders. “There haven’t been any limits placed on issuing licenses, and that is contributing to the oversupply,” she said. “If there was more of a national coordination effort, that would give the federal government more insight into what is actually making it onto the shelves in stores. Only the federal government licenses production – and the provincial and territorial governments manage retail – so a more coordinated approach within the industry, among the provincial and federal governments, would help manage the oversupply of licensed products.”

She adds that those who have cultivation licenses must find a way to grow cannabis that meets minimum THC requirements if they want anyone to buy their product. “Retailers and wholesale suppliers across the country have adapted to consumer demands by purchasing primarily high-THC products,” she said. “Licensed growers and manufacturers have accumulated trim and biomass that cannot be sold or created into high-impact products, (meaning it) is often destroyed. Improved oversight, data sharing, and communication between the federal government and retailers across the country would help control the production of excess cannabis by balancing production with consumer demand.”

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An illegal pot farm is up for grabs on an auctioning website, and law enforcement officers from a sheriff’s office in Oklahoma are the ones selling it. After a surge in both legal and illegal cannabis operations, seized assets are left behind in the aftermath.

The Johnston County Sheriff’s Office in Tishomingo, Oklahoma posted the seized farm on Bidz4Assets.com, a Maryland-based auction website, featuring a 19.24-acre lot near Coleman. Bids will be available from Sept. 11 to Sept. 13 at an online auction. 

Other seized items are up from grabs as well. The list of seized assets include grow lights, light controllers, HVAC systems, wall fans, water pumps, refrigerators, etc.

The opening bid is $755,006, and a single $25,035.00 deposit, including a $35 nonrefundable processing fee, is required to participate. Deposits must be received here by Bid4Assets no later than the end of day on Wednesday, September 6. 

“We’re looking to find buyers who will take ownership of this property and use it responsibly, which was certainly not happening under the previous owners,” Johnston County Sheriff Gary Dodd said in a statement. “Let it be known throughout the county that if you use your farm to grow illegally, we will seize it and we will sell it.”

The bid comes with the following disclaimers: “Johnston County Sheriff’s Office retains the right to reject any and all bids for any reason. Johnston County Sheriff’s Office may withdraw this property from the auction at any time before or during the sale. Johnston County Sheriff’s Office reserves the right to cancel the sale of a property at any time prior to the issuance of the deed.”

Local and state law enforcement agents periodically raid illegal grow operations, seizing millions of dollars’ worth of illegal cannabis. At one farm near Coleman, authorities reportedly seized about 20,000 illegally grown cannabis plants valued at over $30 million. 

The Oklahoman reports that in a news release, Bid4Assets said it “collaborated” with sheriffs and attorneys to pass legislation allowing foreclosure auctions to be conducted online.

On May 25, 2022, Gov. Kevin Stitt signed Senate Bill 976, spearheaded by Sen. Casey Murdock, R-Felt.

Oklahoma’s black market for cannabis has been a major issue.

In 2021, a senior senator from Oklahoma sought millions of dollars in federal funds to battle illegal cannabis growing operations in the state.

Sen. James Inhofe, a Republican, asked for $4 million in federal funds to help Oklahoma drug law enforcement agents fight illegal operations, according to local television station KFOR.

The illicit operations have frustrated the Oklahoma Bureau of Narcotics. KFOR reports that the bureau’s director, Donnie Anderson, has expressed worry if international drug organizations and cartels could move into Oklahoma to take advantage of medical cannabis.

As Anderson and other state officials see it, those organizations and cartels are procuring a legitimate medical cannabis license that they use to cultivate, and then are selling the product to surrounding states where pot prohibition is still in place.

Oklahoma’s Oversupply of Cannabis

Oklahoma voters legalized the use and sale of medical cannabis when they approved State Question 788 in 2018, a ballot measure that created the most loosely regulated legal cannabis market in the nation. 

Fox 23 reported that Oklahoma produces 32 times the amount of cannabis it actually needs. The Oklahoma Medical Marijuana Authority (OMMA) published a study demonstrating that Oklahoma produces a lot more cannabis than consumers can handle. 

“The study found the supply-and-demand ratio in Oklahoma is 64 grams of regulated medical cannabis supplied for every 1 gram of demand for a licensed patient,” the study reads. “The study states a ratio of 2 grams of supply for every 1 gram of demand is a healthy market, putting Oklahoma’s functional supply-and-demand ratio at 32:1.”

In May 2022, Oklahoma lawmakers passed House Bill 3208, which put a two-year pause on issuing new licenses for medical cannabis businesses. At the time, Mark Woodward, public information officer for the Oklahoma Bureau of Narcotics (OBN), said the state approved over 2,200 medical cannabis dispensaries, making oversight of the businesses by state regulators a big logistical challenge.

“That’s a tremendous amount of dispensaries,” Woodward told KTUL in Tulsa. “It’s more than California, Oregon, Alaska, Washington, Nevada and New Mexico combined.”

A few things are being done to help control the market.

Oklahoma lawmakers passed a dozen bills last year that are designed to tighten regulations on the state’s medical cannabis industry, including a requirement that new dispensaries and cultivation operations be located at least 1,000 ft. from schools.

Last March, Oklahoma voters rejected a state question that would have allowed for adult-use cannabis, following a rash of opposition from faith leaders, law enforcement, and prosecutors.

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While states throughout the U.S. continue to embrace the new legal wave of cannabis, it doesn’t eclipse the strife within the industry. Over the past few years, the industry has faced issues around oversupply, falling prices, stringent regulations and distribution problems, among others, which often fall especially heavy on cultivators.

Now, new research findings show exactly how these employees are faring in the current climate. According to the third edition of the U.S. Cannabis Cultivator survey from Wells Fargo, a majority of growers have a grim outlook on the current state of the cannabis market, as reported by Green Market Report. 

Majority of Cultivators Feel Negatively About State of Industry

The survey, including responses from more than 400 growers across eight U.S. states, found that 58% of growers said they feel “bad” or “terrible,” in reference to the current cannabis market. Specifically, 34% answered that “I feel terrible. Things look awful,” while 24% said “I feel bad. Things don’t look good.” 

Additionally, 31% of respondents said they feel “okay,” while only 9% of cultivators said they feel “good” and 2% said they feel “great” about the current state of the market.

The survey also looked at responses by state, finding that California (which also has the highest number of growers) felt most negative about the current market, with 66% of cultivators expressing a “bad” or “terrible” outlook on the market. Most of the negativity was because of falling wholesale prices, with 34% of respondents citing this as their main source of stress, followed by restrictive regulations at 29% and lack of distribution avenues at 10%.

As the largest cannabis market in the world, California saw a dip in cannabis sales in 2022, the first since adult-use sales launched in 2018. The loss is likely due to a decreased price per pound of cannabis across the state.

Falling Prices a Main Obstacle for All Cultivators

California growers weren’t the only group to express concerns about falling prices.

Approximately 87% of cultivators said they are selling wholesale flower for $1,250 per pound or less, up from 83% and 74% at the same level in fall and spring 2022, respectively. Perhaps even more shocking, a majority of cultivators also reported selling flower at $750 per pound or less, below the average breakeven price of $800 per pound. This ultimately makes profitability a challenge for many growers. 

This assertion reflects a recent survey from Whitney Economics, which found that only 24.4% of cannabis operators in the U.S. are profitable. The consulting and research firm also signified that there is little relief in sight for operators, forecasting seven quarters of slower-than-normal growth in the future. Also nodding to some of the concerns of cultivators, the survey noted that the success of cannabis businesses is largely dependent upon the regulatory structure of the states in which they are operating, among other factors that may be beyond their control.

In It For the Long Haul

While the current outlook may seem bleak, cultivators widely indicated that they wouldn’t be leaving the industry anytime soon. The survey found that only 19% of growers planned to partially or completely exit from the industry, a decrease from 22% and 27% in fall and spring 2022, respectively.

This persistence could prove problematic, potentially exasperating oversupply issues and causing continued price drops. The survey found that 42% of cultivators plan to increase cultivation over the next 12 months. 

However, the report also shows that growers are investing in nutrients (65%) and soil (45%), essentially looking to optimize production while keeping costs low. To hammer in that point, few cultivators planned to drop cash on high-cost items like lights (32%), irrigation systems (30%) and extraction equipment (16%).

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According to officials in Maine, the number of caregivers applying to supply medical cannabis in the state is plummeting.

The Sun Journal reports that over a quarter of Maine businesses in the state’s medical cannabis industry have closed down in the last two years. Maine regulators pointed out another glaring problem, the loss of caretakers, and blamed it on oversupply in the state’s medical industry, among other problems.

The spring report from the Maine Office of Cannabis Policy (OCP) describes a “mass exodus” of 1,350 caregivers who are registered with the state to supply medical-use cannabis for patients.

Despite the number of people joining the industry, from the end of 2021 to the beginning of 2023 there’s been a net loss of about 950 caregivers. Officials counted 2,070 caregivers as of March 31, according to state data. In 2021, there were 3,032 caregivers recorded, and at the program’s peak in 2016, there were 3,257 caregivers. 

The report outlines several reasons why they think caregivers are leaving the program.

“The Maine Medical Use of Cannabis Program (MMCP) saw over 1350 caregivers exit the program from the end of 2021 to the end of January 2023,” the report reads. “The impacts of this exodus—a net loss of over 800 caregivers—have been felt by the remaining caregivers and resulted in a number of unsubstantiated claims about why this trend has emerged and why caregivers are continuing to leave the program. Rather than relying on anecdotal evidence, in early 2023, the Office of Cannabis Policy (OCP) surveyed former caregivers to gain a better understanding of why so many registrants exited the program.”

The OCP blames Maine lawmakers for refusing to update statutes for five years. Even though over 1,000 caregivers have left the program, supply has been uninterrupted, which the OCP proves the market is oversaturated. The report also highlights steep utility and business costs, competition with the adult-use market, and banking restrictions. 

“This survey makes clear that the biggest issue facing the medical program is oversupply,” John Hudak, director of the Office of Cannabis Policy, said in a statement. “That oversupply has led to massive drops in wholesale price, making it difficult for registrants to endure mounting energy costs and other market conditions.”

The report also identifies another problem, that caregivers feel as though they are under constant threat, walking on eggshells, in order to not break any rules. Caregivers say that a mandatory track-and-trace system, installed under a recent law, would be too expensive for them to handle, for instance. Clearly a lot of patients found that they can get cannabis just as easily with a state ID at adult-use businesses.

Caregivers Revolt

Caregivers were asked by the OCP in a survey to explain why they aren’t signing up for the state’s medical cannabis program.

“More regulation of the size of recreational cannabis businesses,” one caregiver wrote when they were asked for public comment. “We have allowed big businesses to come in and open recreational cannabis grows and stores. Nobody in the public domain wants to pay $50 for a medical card.” 

The former caregiver continued, “Nobody with a small business can afford to compete with the over-saturated market, at a time when prices are going up on electricity and rent (more than double) the recreational market has destroyed medical simply by growing more and dropping prices to rock bottom. Incidentally, our medical market is flooded with caregivers that are forced to sell illegally on the side just to survive in today’s market.” 

It’s important to note, however, that the response rate of the caregiver survey was just 8% or 117 completed surveys out of more than 1,300 people who were contacted. The report identifies several things that need to change in order for Maine’s medical cannabis industry to survive. 

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