Since its inception, Oklahoma’s medical marijuana program has been the only true free-market medical program in the country. Indeed, I have often referred to Oklahoma as the “Wild, Wild West” when it comes to many things, not the least of which is our cannabis industry.
But almost three years in, is the title still appropriate? Or has Oklahoma succumbed to burdensome regulation and taxation — two significant pitfalls of the legal cannabis industry that are prevalent in states that legalized early in the game?
On the regulatory front, the Oklahoma Medical Marijuana Authority has implemented new testing, labeling and seed-to-sale tracking requirements, as well as detailed waste management procedures. These regulations were necessary to protect patients and business owners alike and were met with little opposition.
On the other side of the industry, law enforcement officials are investigating numerous licensees’ suspected involvement in black market sales — not an unexpected development, given the ease with which one can enter Oklahoma’s industry and the absence of any cap on plant numbers.
At the state capitol, a plethora of bills regulating Oklahoma’s medical system were introduced in the Legislature this 2021 session, but few survived. Of those still alive, none of regulatory substance have cleared both legislative bodies to land on the governor’s desk for consideration. Additionally, while the OMMA announced months ago that it had awarded Metrc its seed-to-sale contract and rollout would commence by April 30, 2021, a barrage of complaints, lawsuits and general rebellion among OMMA licensees resulted in a 60-day stay of Metrc’s implementation, spearheaded by none other than Oklahoma’s attorney general, Mike Hunter.
Of course, in a Red State Second Amendment Sanctuary, it should be anticipated that there would be resistance to a Metrc mandate and rebellion against seemingly ill-conceived legislation, including proposals for license caps, limitations on smoking medical marijuana, restrictions for medical marijuana patients with handguns and moving OMMA from the Department of Health to Oklahoma’s Bureau of Alcohol, Tobacco, Firearms and Explosives.
At the time of this writing, the window of opportunity for such bills to become law is fast approaching, and it does not appear that the Legislature plans to take affirmative action on any of them.
Will any bills that impact Oklahoma’s medical marijuana system land on Governor Kevin Stitt’s desk before adjournment of the 2021 legislative session? If they do, will he sign them into law? Or will he veto them as he did last year’s House Bill 3228, the only significant piece of legislation impacting Oklahoma’s medical marijuana system to pass both legislative bodies?
And what of the fierce competition and continued rise in the number of active business licenses?
On April 8, 2020, there were 10,140 active licensees; one year later, that number had risen to 10,587, with growers leading at 7,397 licenses, followed by dispensaries (2,214), processors (1,387), transportation (79), waste disposal (capped at 10) and laboratories (25). The OMMA has also granted one waste permit, two research licenses and one education license. While there was a slight dip in the number of dispensary licenses earlier this year, the numbers have risen again. Absent inhibiting legislation — or federal legalization, which could prompt numerous mergers and acquisitions — Oklahoma’s cannabis industry shows no signs of slowing down.
Significant, rising tax revenues from two sources — the 7% excise tax on gross sales, and sales tax (state and local) for dispensaries’ and processors’ direct patient sales — show that demand is high among the 366,815 active patient licenses and the additional 2,383 active caregiver licenses. Revenues from the excise tax have climbed from $24.2 million in 2019 to $56.2 million in 2020 and are already at $16.6 million for the first quarter of 2021. On the sales tax front, numbers have exploded, with $30.6 million in 2019 to $71.6 million in 2020 and $20.3 million for the first quarter of 2021.
Rodgers & Hammerstein’s line from the musical hit “Oklahoma!” rings true for Oklahoma’s medical marijuana system. You’re doin’ fine, Oklahoma!
In fact, Oklahoma’s cannabis industry is doing much better than fine these days. The barriers that have hampered the cannabis industry in other states have been avoided, at least for now. Turns out, the Wild, Wild West is a great place to start a medical marijuana business. Who knew? Oklahoma did!