While the Oklahoma medical marijuana industry has soared to new highs in recent months, a new state bill could limit its continued growth for the foreseeable future.
The Oklahoma Cap on Medical Marijuana Businesses of 2021, or HB 2272, would place a cap on the number of active medical marijuana commercial licenses. The cap would be based on the number of active dispensaries, growers and processors in the state as of Sept. 1, and would remain in effect through September 2023.
The bill recently passed through the Oklahoma State House of Representatives by a 69-21 vote and was sent to the State Senate last Thursday. All three Norman representatives — Jacob Rosecrants, Merleyn Bell and Emily Virgin — voted against the bill.
Representative Josh West, R-Grove, authored the bill to increase oversight of the state’s marijuana industry, he said on the House floor last Wednesday.
“We do have a thriving medical marijuana industry in the state of Oklahoma. At the same time we’ve got a thriving black market industry in the state of Oklahoma, too,” West argued. “So this may not stop it completely, but I think this slows it down.”
The bill would also implement new “active use” requirements on current commercial licenses, and commercial license holders would have 18 months to meet these requirements. For dispensaries and processors, this would mean a minimum requirement of $5,000 in gross revenue each month, while growers would need to maintain at least 50 plants each month.
Commercial licenses that fail to meet these requirements would be terminated.
As of now, the state has 10,000 active commercial licenses, according to the Oklahoma Medical Marijuana Authority. However, the bill would eventually cut that down to 8,000 — 5,000 growers, 2,000 dispensaries and 1,000 processors.
While West and other state representatives argue that the bill will add necessary oversight, opponents argue it violates the original intention behind State Question 788, which legalized marijuana in 2018.
Chip Paul, who authored SQ 788, said he wrote the bill for the industry to resemble a free market economy, and bills like HB 2272 put unnecessary restrictions on the industry.
“We’re never going to view the wrecking of our free market economy as a good thing,” Paul said. “That was one of the core principles that we set forth in SQ 788. SQ 788 is potentially the most popular law that Oklahoma has ever passed, and it’s popular because of its core principles. This is an opportunity that should be open to every Oklahoman and it shouldn’t be restricted. What other industry do we limit licensing?”
Paul said he agrees with West that the black market is becoming a problem, but not because of the growing number of commercial licenses. Paul argues that there’s a lack of enforcement of basic regulations like verifying ownership documents and place of business and quality standards, and that HB 2272 doesn’t do anything to solve these issues.
“The problem isn’t too many licenses, the problem is no enforcement,” Paul said. “The free market only works with enforcement. If you let any donut shop cook in a parking lot with no licensing, dirty oil and grease, and not safe standards, it’s going to get out of control in a hurry. So you have to have some checks and balances. Our checks and balances on licensing was enforcement. That should absolutely be a basic thing, and that’s not happening.”
Rosecrants said one of the reasons he voted no is because the licensing limit and active-use requirements could hurt small businesses.
“I think it’s a job-killing bill. I think it hurts the economy when you put a cap on these types of things,” Rosecrants said. “I’m a big believer in small businesses having a chance to go and compete with some of the big [businesses]. A lot of people will tell you it’s too early to put a cap on these things, especially since we just legalized marijuana a couple years ago.”
A spokesperson for the OMMA said the agency is currently monitoring the bill and has no comment at this time. However, they said the OMMA is confident that Metrc’s new seed-to-sale program that launched last month will enhance the tracking of licensed, safe product in Oklahoma and separate it from the black market.
State Sen. Mary Boren, D-Norman, said she needs to do more research on the bill, but is leaning toward voting against it if it’s put to a vote.
“I can see a benefit to saying, ‘we’re not going to issue any more licenses to figure out the sustainability of what we’re doing right now,’ but to say you’re going to lose your [license] unless you produce a certain amount, it’s hard for me to see any benefit in doing that unless you’re trying [the industry] into corporate-owned business models,” Boren said.