Oregon’s cannabis extracts market is attracting the attention of the industry as the state faces oversupply.

Back in the days of cannabis prohibition, cannabis didn’t see much change. At the time, there might have been the occasional new strain or new form of edible, but the vast majority of illicitly sold cannabis was the standard clear packet of dried cannabis bud. In the early years of legalization in US states like Oregon, Washington and Colorado, the greater degree of freedom allowed by the legitimate storefront format provided the industry with opportunity for greater diversity in cannabis products, but traditional, smokable green flower has remained the primary product of the cannabis industry.

In Oregon today, we might finally be seeing the first signs of a major shift in cannabis consumer trends and buying habits. Increasingly, the classic leafy green is losing ground in the Beaver State as producers see greater opportunity for value in processed cannabis products like extracts and edibles.

This INNspired Article is brought to you by:

Nutritional High (CSE:EAT, OTCQB:SPLIF, FWB:2NU) has recently expanded into the Oregon cannabis market, continuing to focus on developing, manufacturing and distributing premium and consistently dosed products including edibles and oil extracts for nutritional, medical and adult recreational use.Send me an Investor Kit

Oregon cannabis in abundance

The big story during the early days of the Oregon cannabis market has been the massive surplus of raw cannabis product produced in the state. Excitement over the new industry, a favorable growing climate, a lower tax rate than competing legal states and low production costs have attracted a huge number of legal growing operations to the state over the past couple of years. As a result, the Oregon cannabis industry has produced more cannabis than the state’s consumers could possibly use. In February 2018, Oregon state officials announced that producers had grown 1.1 million pounds of bud in 2017, compared to just 240,000 pounds consumed by Oregonians that year. This excess product has created a buyers’ market, forcing retail outlets to drop prices to as low as US$4 per gram.

This supply glut is bad news for the state’s growers, but for companies looking to source raw product for processing, the situation is rife with opportunity to create value. Some producers have pivoted to the extraction market, selling bulk product to extractors for on average US$800 to US$1,000 per pound of bud. This strategy still fetches a significantly lower price than it would have if selling for retail two years ago, but it makes it far easier for growers to find a buyer for their product. This is a great scenario for producers of extracts, edibles and other processed cannabis products as they can eliminate cultivation costs and buy up low-cost raw product, which is then turned into value-added products and sold for a premium.

The low-cost cannabis has come at a great time for producers of processed cannabis products, particularly those that haven’t bothered with investing in grow facilities in the state. Cannabis bud market share is rapidly declining as extracts and edibles creep upwards. In January 2017, cannabis bud made up a significant majority of the product sold in Oregon retail stores at 61 percent while concentrates and edibles made up 19 percent and 8 percent respectively. By November 2017, concentrates were at 26 percent and edibles had risen to 15 percent, while cannabis bud had fallen to 45 percent. That’s a massive shift over a span of just 11 months.

The trend towards processed cannabis products is by no means limited to the Oregon market and can be seen in most legal jurisdictions. For example, dried bud sales in Colorado dropped from 67 to 44 percent of total cannabis sales between 2014 and 2018, while extract sales jumped to 31 percent from half that in 2014. Similar figures can be seen in Washington, California and elsewhere.

It’s difficult to pinpoint exactly what it is that’s driving the shift in consumer preferences in Oregon. It could be that now that cannabis has been legal in the state for a while, more consumers are beginning to realize that options exist beyond the traditional one. There are a few noteworthy advantages to processed cannabis products that consumers could be waking up to, not the least of which being that oils and edible products don’t come with that telltale smell that might bother the neighbors or the landlord. Whatever the cause, the trend is clear and significant.

With THC cannabis bud fetching rock bottom returns in the state, a number of Oregon growers are pivoting to growing hemp for CBD products. Non-psychoactive CBD products are the current big thing in the health and wellness industry, being sold in tinctures as oil or used in beverages, cosmetics and much more to treat pain, anxiety, epilepsy and even things like post-workout soreness and skin issues. Due to its utility, demand for CBD is high and growers can make more than US$100,000 for an acre of hemp.

Oregon cannabis companies

Cannabis product producer Nutritional High (CSE:EAT,OTCQB:SPLIF,FWB:2NU) is one of the companies that has found itself in a positive position due to the Oregon cannabis landscape. In September 2018, the company was granted its Oregon marijuana processor license and announced that it would immediately begin processing cannabis at its La Pine facility to create vape cartridges, syringes, dab jars, a range of edible products and more. Nutritional High does not own a growing facility in the state of Oregon — though they do have one in Colorado — so they are expected to rely on third party producers to source their raw bud.

There is a range of other cannabis companies in the state specializing in processed cannabis products including Select Strains, Dirty Arm Farm Beehive Extracts and Lunchbox Alchemy. As the industry moves further in favor of extracts and edible products over cannabis bud, we can expect even more companies to focus on this side of the market.

East Fork Cultivars is one of many growers in the state that has pivoted to focus on growing hemp for CBD products. Founded in 2015 as a medical cannabis grower, the company is now dedicating 3.4 acres to hemp in 2018.


It’s no surprise that the cannabis industry is changing. Prohibition severely stifled development in the space, but now we’re in an era in which companies can finally innovate and consumers have more choice than ever. Right now in the state of Oregon, we’re seeing a climate that is highly advantageous for companies positioned to process rather than cultivate.

This article was originally published on the Investing News Network in February 2019. 

This INNSpired article is sponsored by Nutritional High (CSE:EAT,OTCQB:SPLIF,FWB:2NU). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Nutritional High in order to help investors learn more about the company. Nutritional High is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Nutritional High and seek advice from a qualified investment advisor.

Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis market update.

During the first few months of investment time in 2021, cannabis faced some volatility alongside optimism about federal changes in the most important market for the drug.

The cannabis business found its stride during Q1 thanks to policy change signals and consolidation.

To find out more, the Investing News Network (INN) asked experts about progress in the market during the first major period of the new year, and which developments investors should watch out for.


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Cannabis market update: New York and US potential boost operations

New York state’s legalization of recreational cannabis was a huge Q1 announcement that added pressure to the US federal government when it comes to cannabis policy, said George Mancheril, co-founder and CEO of Bespoke Financial, a debt financing business with a particular focus on servicing cannabis businesses.

“It’s going to add to the chorus of voices in the federal scene to basically move sooner rather than later,” he explained to INN.

Following the US election in 2020, the momentum for cannabis businesses went on the upswing, as did company valuations, with the idea of expansion at the heart of it all, according to Mancheril.

Before starting Bespoke Financial, Mancheril learned from traditional investment banks, working in the lending, fixed income and debt markets with Goldman Sachs (NYSE:GS) and Guggenheim Partners.

Nawan Butt, portfolio manager with Purpose Investments, agrees with Mancheril. The financial expert told INN the ongoing legalization process seen in the US market is leading to expansion.

“It’s becoming more of a national move, then small pockets of proliferation. That’s very exciting about cannabis right now,” said Butt, who co-manages the Purpose Marijuana Opportunities Fund (NEO:MJJ).

This proliferation effect is causing a change in valuations and enthusiasm for US-based operations. Mancheril told INN that by the end of Q1, multi-state operators (MSOs) had raised approximately US$3.3 billion.

The cannabis lender said he sees the industry as having grown from the woes of 2019; it is now undergoing a return to form as excitement about the US opening up increases.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes in US cannabis policy, although the timeline for these changes is becoming increasingly hard to predict.

Leading up to that capital influx, Mancheril said he wants to see operators really drill down on the value of desired assets and whether they make sense.

“What I’d hope is that we continue to see bullish sentiment, but with some measure of responsibility, and let’s not just get over ahead of ourselves,” Mancheril told INN. “The idea is let’s minimize the volatility and continue growing responsibly.”


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As far as struggles go, Butt explained that the cannabis industry has cemented itself as a growth-type sector, and as such there are macro pressures affecting the way these assets operate.

“We’ve seen this preference for cash flows at growth in the current or in the near future, rather than in the far future, and that’s what we’re seeing as far as valuations go in the broad market,” Butt said.

Cannabis market update: Volatility continues to rule as industry foundations build

Despite the industry’s potential and the growing pains it has gone through as a whole in both the US and Canada, volatility remains a key factor in the cannabis investment scene.

Butt explained that the current shareholder base, which is dominated by hedge funds and retail investors, still lacks enough institutional support to avoid the day-to-day volatility cannabis has come to be known for.

These two investor groups, Butt said, can be easily spooked and excited by the news of the day when it comes to their investments.

“A lot of these institutions’ strategies are not about short-term profits, but they’re about long-term sustainability of the businesses themselves,” Butt said.

“That’s why you see a lot of volatility in the space, and that’s essentially what we’ve seen over the past, I’d say, three to two months as well,” he added.

That means investors shouldn’t expect an end to volatility anytime soon.

“It’s not about whether we continue to expect volatility, because we do,” Butt said. “We really think that the volatility will be taken out when the shareholder base becomes more institutional, but it’s really about understanding why there is volatility in the first place.”

Cannabis market update: Canadians talk up US business, but questions remain

A surge of mergers and acquisitions has taken over the Canadian cannabis sector recently as more producers see potential in America.

One of the biggest announcements in this regard came when Organigram Holdings (NASDAQ:OGI,TSX:OGI) secured a C$221 million investment deal from British American Tobacco (NYSE:BTI,LSE:BATS).

Using the funds, the two will work in tandem to develop new branded products designed for the international stage, including in the US. Organigram CEO Greg Engel previously told INN that the US represents a critical opportunity for Canadian companies, but the entry point isn’t as clean as it could be.


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While the long-term potential may be exciting for investors, Butt told INN he’s still unsure how the approach will work for Canadian companies.

The Purpose Investments expert said there will be plenty of space for the biggest Canadian names to pursue US market entries, beyond the initial hemp-derived CBD moves some operators have mde, since the US represents the biggest market in the world.

“But there’s just way too many unknowns right now to say exactly what that participation is going to look like, or when that participation will happen,” he said.

“What we do know is that currently the US MSOs are in a wonderful sort of position to expand on their market leadership that they have. And it will be tough for Canadians to come in and compete with them,” Butt said.

Canadian players still retain the upper hand at times in terms of valuation, which is confusing for both Butt and Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares.

“The performance in quarterly earnings of US companies has been rather spectacular. They’ve knocked it out of the park in most instances,” Ahrens told INN.

Butt praised the recent performance reports from MSOs across the board, pointing to year-over-year growth lines and projections for continued positive performance. In his view, share prices still don’t reflect company value. “Those are really being discounted at this point,” Butt told INN.

“We’ve seen the Canadian licensed producers be really hot stock performance-wise, outpacing the US (MSOs), and I’ll say it’s rather nonsensical to me,” said Ahrens, who oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).

Cannabis market update: Investor takeaway

The cannabis investment proposition finds itself at an interesting moment in time, as the entire sector eagerly awaits confirmation in the US at the federal level.

While for the Canadian companies waiting on the sidelines, this development may feel like a major necessity to address current financial struggles, for US-based operators, the heat around the corner could represent future positivity for already thriving operations.

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All interested parties can join the conference call by dialing 1-888-231-8191 or 1-647-427-7450, conference ID: 4880609. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until May 20, 2021 . To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 4880609.

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Ayurcann has commenced trading on the Canadian Securities Exchange (” CSE “) on April 8, 2021 and subsequently announced a private placement of up to $500,000 (” Financing “), as per the Company’s press release dated April 12, 2021. The proceeds of the Financing are intended to be used to further pursue Phase 2 of the expansion of the production capacity of the Company’s Pickering facility.

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