State officials in Oklahoma have put a moratorium on issuing new licenses for medical marijuana businesses in a bid to allow the state’s cannabis regulators to catch up with oversight of a burgeoning medicinal cannabis industry. Under the moratorium, which was passed by state lawmakers earlier this year, no new licenses for medical growers, processors or dispensaries will be issued by the Oklahoma Medical Marijuana Authority (OMMA) for a period of at least two years.
Oklahoma voters legalized the use and sale of medical pot with the approval of State Question 788 in 2018, a ballot measure that created the least tightly regulated legal cannabis market in the nation. Corbin Wyatt, owner of Likewise Dispensary, said that the state’s medical marijuana law included few barriers to entry for entrepreneurs seeking opportunities in cannabis.
“It was easy,” Wyatt told local media. “You pay $2,500 and you can open your business pretty much anywhere.”
In May, Oklahoma lawmakers passed House Bill 3208, which puts a two-year pause on issuing new licenses for medical cannabis businesses. The new restrictions under the measure were originally scheduled to become effective on August 1, but bills must go into effect at least 90 days after passage unless they gain a two-thirds majority vote in the legislature. The bill was signed by Governor Kevin Stitt on May 26, making it effective on August 26 under state law.
Applications for new medical cannabis businesses submitted before the moratorium goes into effect will be processed by the OMMA. But applications that are denied or received after the deadline will not be considered until 2024 at the earliest.
Mark Woodward, public information officer for the Oklahoma Bureau of Narcotics (OBN), said the state already has over 2,200 medical dispensaries, making oversight of the businesses by state regulators a logistical challenge.
“That’s a tremendous amount of dispensaries,” Woodward told a Tulsa television news crew. “It’s more than California, Oregon, Alaska, Washington, Nevada and New Mexico combined.”
Unlicensed Businesses Are Operating Outside the Law
Woodward said that many of the businesses that have been operating in the state, even some that have been licensed by the OMMA, have been producing cannabis for shipment out of Oklahoma illegally. He added that some of the state’s 8,500 medical weed cultivators have ties to organized crime organizations from the United States, Mexico, and China that have moved into the state, many during the COVID-19 pandemic, to take advantage of Oklahoma’s inexpensive licensing fees and relatively lax cannabis regulations.
“We’ve talked to our law enforcement partners from New York to Florida, and they say we are the number one supplier of black market marijuana on the East Coast,” he said.
Woodward said that some of the state’s licensed medical dispensaries are selling cannabis that has been produced by illicit growers and processors. He added that the pause in new businesses will give regulators and the OBN an opportunity to regulate the state’s medical marijuana supply chain more closely.
“This moratorium will allow us to focus on those we already have in place and make sure they’re either following the law or going after those bad actors,” he explained.
Matt Boyd, the owner of the Green Cross Meds cannabis dispensary in Tulsa, said that the state’s saturated market has caused profits from his business to drop by two-thirds.
“In the last year, I’m not the only dispensary owner that has felt a decline in business, and it’s not because of anything we’ve done different,” he explained. “It’s just because there’s been so many dispensaries that have opened up. Just the limit of ‘no more new dispensaries’ coming into business is gonna help all of us existing dispensary owners now.”
Boyd said that the two-year moratorium on new retailer licenses will slow the impact on existing retailers.
“It’s time to allow a market that’s brand new, a brand-new grassroots industry in our state, to kinda have some balance, y’know?” Boyd said. “And that’s just what it’s gonna take.”
Oklahoma lawmakers recently passed a total of 12 bills 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. The moratorium on the issuance of new licenses is scheduled to be in effect until August 1, 2024, or until the medical marijuana authority catches up on the backlog of pending applications. But some business owners believe that may never happen.
“Until the OMMA either feels that they are able to control everything and it’s an opportune time to issue new licenses, but most people are saying that won’t ever come,” Wyatt said.