Legal cannabis growers along the U.S. West Coast are living through the classic farm story: they’re too good at growing the crop. Ideal climate, deep cultivation expertise, and rapidly expanded canopy have produced far more marijuana than their home markets can absorb. With federal law still blocking interstate trade, producers in Oregon, Washington, and California are stuck in a kind of green jail—overflowing warehouses, collapsing wholesale prices, and a growing push to ship product across state lines.

How the Oversupply Happened

Oregon: Years of Inventory and Record Harvests

Oregon was the first big warning sign. A 2019 Oregon Liquor Control Commission (OLCC) supply-and-demand report found the state had grown enough legal cannabis to satisfy several years of in-state demand, even if every licensed producer disappeared overnight.

That trend only intensified. In 2024, Oregon growers produced a record 12.3 million pounds of cannabis—about a 28% increase over 2023—while legal demand stayed roughly flat at around $960 million in retail sales. Wholesale prices hit their lowest levels ever. READ MORE HERE: MJBizDaily

Investigative reporting in 2025 noted that stagnant prices and massive oversupply have even pushed some licensed growers back toward the illicit market as they struggle to stay solvent. READ MORE: InvestigateWest

Washington: Falling Sales and Fewer Producers

In Washington, the story is similar. A 2025 Joint Legislative Audit and Review Committee (JLARC) market study concluded that an “existing oversupply of cannabis” and a 31.6% decline in producers since 2017 signal very challenging conditions for anyone trying to stay licensed—especially new social-equity entrants. READ MORE: Washington State Legislature

Washington’s Department of Revenue data show cannabis sales have declined for five straight years, with oversupply and price compression cited as key causes. READ MORE: KOMO

Growers interviewed in an Associated Press feature described desperate conditions: “liquidation sale” emails circulating among farms, equipment being sold off, and producers complaining that a 37% state excise tax leaves almost no margin when wholesale prices are already on the floor. READ MORE: Colorado Public Radio

California: Price Crash and License Attrition

California—by far the biggest market—has been through its own whiplash. After a pandemic boom, legal sales have dropped about 30% since mid-2021, as high taxes, regulatory costs, intense competition and a thriving illicit market crush margins. READ MORE: San Francisco Chronicle

Cultivation taxes were eliminated in 2022 via AB 195 to keep the legal market alive, but wholesale prices still plummeted. (Capitol Weekly) By 2025, some analysts report California flower that once sold for over $1,000 per pound now moving closer to $250 per pound, often below production cost.

A California Department of Cannabis Control–commissioned “Cannabis Market Outlook 2024” confirms that wholesale value for licensed cannabis dropped sharply between 2021 and 2022 before stabilizing at lower levels. READ MORE: Department of Cannabis Control

Regulatory strain plus oversupply have decimated the license rolls. By 2024, the number of inactive or surrendered licenses in California exceeded active ones, with much of the attrition coming from small cultivators in Northern California who couldn’t survive low prices and heavy compliance costs.

Trapped Inside State Lines

This is where the West Coast’s “ganja glut” becomes a structural problem. Under federal law, cannabis remains illegal and cannot cross state lines, even between fully legal markets.

An April 2023 Associated Press report captured the mood: legal growers in Washington, Oregon, and California are “struggling with oversupply, low prices and limited outlets for selling their product” because all that extra flower is locked inside state borders. READ MORE NEWS: AP News

Northern California and Southern Oregon alone could likely supply much of the entire U.S. market if interstate commerce were allowed, thanks to ideal climate and long cultivation history. Instead, those regions are watching farms close while newer, higher-cost grows in smaller Eastern markets are protected by federal prohibition and state-by-state walls. READ MORE: Reddit

The Interstate Commerce Push: Oregon, California, Washington

Faced with this mismatch—oversupply in the West, unmet demand and high prices elsewhere—West Coast producers and lawmakers have spent the last several years quietly building a legal bridge for future interstate cannabis trade.

Oregon: First Mover (2019)

In 2019, Oregon passed Senate Bill 582, authorizing the governor to enter into interstate cannabis agreements with other legal states once federal law changes or the U.S. Department of Justice issues guidance allowing such trade.

SB 582 doesn’t open the borders on its own, but it’s essentially Oregon’s way of saying: We’re ready the moment D.C. gives the green light.

California: SB 1326 (2022)

California followed with SB 1326, signed in September 2022. The law similarly empowers the governor to sign cannabis interstate commerce agreements with other states, contingent on either federal reform, DOJ non-enforcement guidance, or a state attorney general opinion that interstate trade wouldn’t create significant legal risk.

Analyses from the California Legislature note that the bill was explicitly modeled on Oregon’s SB 582 and aimed at leveraging California’s large production base when national rules eventually shift.

Washington: Joining the Compact Wave (2023)

In 2023, Washington lawmakers advanced SB 5069, allowing the state to enter into interstate cannabis agreements with other legal states once federal conditions permit, again mirroring Oregon and California’s approach. Legislative summaries note that Oregon and California had already enacted similar contingent interstate-commerce laws.

Together, the three Pacific states have effectively drafted the skeleton of a West Coast cannabis free-trade zone, poised to flip on when federal prohibition eases or enforcement posture changes.

Timeline: From Glut to “Let Us Export”

• 2014–2016: Adult-use markets launch in Washington, Oregon and California, with rapid licensing of cultivators.
• 2019: OLCC publishes a supply-demand report warning of multi-year oversupply; Oregon passes SB 582, the first interstate-commerce enabling law.
• 2021–2022: Wholesale prices crash in California; lawmakers remove the cultivation tax and later pass SB 1326 to prepare for interstate trade.
• 2023: Washington growers publicly complain of “failed economics” and liquidation sales; AP publishes “Ganja glut? With excess weed, growers seek interstate sales.” Washington passes legislation enabling future interstate cannabis agreements. READ MORE: AP News

What Happens Next?

For now, interstate cannabis commerce is still theoretical. None of the West Coast interstate-commerce laws can take effect until federal policy changes or the DOJ/AG provides protective guidance.

But the political groundwork is laid:

• West Coast states have statutory authority ready to go.
• Their growers are openly lobbying for interstate exports as a lifeline from oversupply. (AP News)
• Eastern and Midwestern states facing higher prices and limited supply could benefit from cheaper, sun-grown West Coast flower—although that would also put pressure on local cultivators.

Until Washington, D.C. moves, though, the ganja glut remains a local problem with a national solution stuck in limbo. West Coast growers can see the demand out there. They just aren’t allowed to reach it.