Oklahoma should temporarily halt the issuance of new medical marijuana licenses until the state has a better handle on regulating the sector, a legislative report issued Thursday recommends.
Such a moratorium, said the Legislative Office of Financial Transparency, would give the state time to “fully develop and implement its regulatory framework and bring the industry into compliance.”
The report does not specify which licenses should be included in the moratorium, but LOFT Director Mike Jackson said “the data indicates” those for businesses, including grow facilities, processors and dispensaries, would be higher priority than those issued to patients.
The co-chairman of the joint committee to which LOFT reports, Sen. Roger Thompson, R-Okemah, agreed and said the suggestion should be considered.
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The report makes several other recommendations, mostly concerning organization and funding of enforcement.
Since voters approved medical marijuana in 2018, Oklahoma has struggled to keep up with the flood of licensed businesses and patients. It has more growers and dispensaries than any state in the union, and 9% of the population are licensed patients — a rate nearly twice that of any other state.
This is largely attributed to the loose regulatory structure enacted by State Question 788, the initiative petition adopted by voters.
The intent was to allow small entrepreneurs access to the industry, but law enforcement agencies say that over the past two years, it’s contributed to an influx of criminal organizations with national and even international ties and has overwhelmed state and local authorities.
“Since last April, our agency has shut down more than 90 farms,” said the Oklahoma Bureau of Narcotics’ Mark Woodward. “Most of these are bigger parts of much bigger investigations.”
Oklahoma Medical Marijuana Authority Executive Director Adria Berry said a northeastern Oklahoma county assessor was threatened with a shotgun while trying to inspect one facility for tax purposes and had to be assisted by armed OMMA agents.
The LOFT report, citing Oklahoma Tax Commission information, said 40% of medical marijuana businesses have not been remitting taxes. But even that figure is subject to the lack of reliable data cited by LOFT because it’s not known how much of that 40% has either stopped operations or never began.
State Sen. Frank Simpson, R-Ardmore, asked Berry if she felt like “someone chasing a horse after it’s already out of the barn.”
Berry replied that she sometimes does, but she said, “I think it’s doable. The reason is (having) the ability to hire the people we need across the state. … There’s no question we can get our arms around and properly regulate this industry.”
The self-funded OMMA budget is expected to grow from about $11 million to $41 million this year as it hires additional inspectors and other enforcement staff and implements technology that allows it to better track licensees and their products.
Woodward, of the OBN, sounded a note similar to Berry’s.
“We’re getting the tools we need to get these people,” he said.
Video: Governor addresses medical marijuana in State of the State speech
Feb. 7, 2022 video. Oklahoma Gov. Kevin Stitt delivered his State of the State address at the state Capitol.
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Foreign investors, crime among concerns as cannabis booms in rural Oklahoma
Stories abound of strangers showing up with bundles of cash and paying far above market rates for farmland that’s quickly converted to marijuana production enclosed in fenced compounds.
For the most part, the grows seem to be duly licensed by the Oklahoma Medical Marijuana Authority. But law enforcement officials and some lawmakers contend that a good deal of the product is being illegally shipped out of state for old-fashioned street sales.
And the situation, say rural lawmakers, is creating a lot of tension in their districts. By one estimate, said state Rep. Josh West, R-Grove, 60% or more of the state’s marijuana production is sold illegally.
Attention on 'ghost owner' investigations as criminal cannabis case has tie to Tulsa law firm
The criminal case against an employee of a Tulsa law firm with hundreds of cannabis-related clients has drawn attention to investigations of “ghost owners."
Kathleen Windler, charged in Garvin County District Court, is accused along with her employer of knowingly fostering illegal medical marijuana operations. She identified herself as a legal secretary for Jones Brown, a law firm with an office in Tulsa.
"Fraudulent business structures” have reportedly been used to bring out-of-state interests to Oklahoma and circumvent the state’s two-year residency requirement for majority ownership in medical marijuana businesses.
Petition to allow cannabis for recreational adult use filed in Oklahoma
A cannabis advocacy group in October filed two ballot initiatives seeking to amend the Oklahoma Constitution to legalize cannabis use for anyone at least 21 years old and replace the state medical marijuana industry’s current oversight agency.
Nearly 178,000 valid signatures would be required on each of the petitions for it to be placed on a ballot in 2022.
