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Pros and Cons of Oklahoma’s Lenient Cannabis Regulations

Oklahoma is already famous for the iconic Broadway Show, world-class tornadoes, and the basketball team that once had James Harden coming off the bench behind KD and Russell Westbrook. Now it has a new distinction: the most medical cannabis patients per capita of any state in the country.

Oklahoma’s medical market has absolutely boomed in the three years since voters enthusiastically approved one of the least restrictive medical programs in the country. The state now has more than 2,000 dispensaries (more than any other in the U.S.) supporting product from 8,000 licensed growers, and sales are through the roof. According to the cannabis website Leafly’s annual jobs report, Oklahoma’s medical cannabis product sales were over $800 million 2020, more than doubling the state’s sales total from the previous year despite challenges posed by the COVID-19 pandemic.

So how did Oklahoma’s licensed cannabis industry blossom so quickly? It’s a Wild West of laissez faire regulations and a low barrier for entry. There are plenty of benefits to these loose industry regulations, but there are also downsides and components of the industry that could be helped with additional guidance and standards.

Pros of Oklahoma’s Lenient Cannabis Regulations:

The biggest upside to Oklahoma’s loose licensed cannabis industry regulations can be summed up in one word: opportunity. The industry is very accessible for start-ups and aspiring entrepreneurs. It is relatively inexpensive to obtain a cannabis business license in the state of Oklahoma, with the application fee being only $2,500. It’s not cheap, but the price is much lower than that of most legal states, such as California, where it can cost tens of thousands of dollars.

Of course, even with a business license, start-ups still need a fair amount of capital to launch, but the cost of doing business in Oklahoma is lower than that of states such as California, New York, New Jersey and Illinois. Real estate, from warehouses for production facilities to retail storefronts for dispensaries, is more affordable. This paves the way for independent companies and first-time entrepreneurs, rather than big corporations, to become major players in Oklahoma cannabis. The inexpensive licensing may also benefit marginalized community with access to less resources to make it in cannabis, potentially creating more equity in the space.

The statistics back up the notion that independent start-ups are leading the charge of Oklahoma’s licensed cannabis industry. According to Cannabiz Media, most of the state’s business licenses are single businesses, rather than companies and corporations with multiple licenses.

And then there is the growing customer base of medical patients. It’s a fairly simple process for residents and out of state MMJ cardholders to be approved for a medical cannabis card. The cost of the patient permit is $100, with reduced rates available for Medicare and Medicaid members. There are also no specific qualifying conditions, giving doctors free range to recommend medical cannabis to any and all adult patients.

The state boasts more dispensaries per capita than any other medical state, and one out of every 13 Oklahomans has a medical card, with nearly 6 percent of the population registered for medical patient marijuana cards. This number is expected to rise to 10 percent by 2025. As a reference point to show how outstanding Oklahoma is in this respect, Oregon registered 2.5 percent of the population for medical patient marijuana cards at best, and Nevada registered 1.2 percent.

Another positive and fairly unique aspect of Oklahoma’s lenient medical cannabis regulations is that the state allows medical patients to smoke and vape anywhere that tobacco can legally be consumed. This includes public streets, bars that permit cigarette smoking and more. This permission de-stigmatizes medical cannabis and may indirectly lead to increased sales.

Cons of Lenient Regulations

A low barrier for entry is terrific for aspiring entrepreneurs looking to break into the burgeoning cannabis industry, but it could lead to market saturation. This drives prices down, which is good for consumers, but makes it difficult for businesses to turn a profit and stay afloat. Plus, with little oversight on the launch of cannabis companies, quality control and safety may be an issue. Some struggling companies may risk cutting corners to keep pace and not operate the safe, effective and right way, putting the best interest of consumers and their employees aside to stay in business. This jeopardizes the reputation and legitimacy of the entire industry, reflecting poorly even on the businesses doing things the right way.

In addition, the lack of regulations has also translated into a lack of communication. As reported in a June 2021 Oklahoma Watch article, “delays in implementing Oklahoma’s ‘seed-to-sale’ tracking system for medical marijuana have sowed confusion for businesses in the fast-growing cannabis industry as law enforcement authorities step up their enforcement efforts for illicit marijuana products… there is broad agreement among cannabis businesses that seed-to-sale is needed to ensure legal products and enable quicker consumer recalls if there are health or safety problems with a particular product. But how the state chose its vendor and how much businesses should bear the costs of regulation has split many in the industry.”

The Sooner State also has a low sales tax rate for medical cannabis – just 4 percent. For comparison’s sake, the medical sales tax in New Jersey and New York is 7 percent. This keeps medical cannabis products more affordable for patients, which is important, but it also limits the tax revenue the state of Oklahoma can earn from the medical cannabis industry. A recent report from Verilife found that even though Oklahoma has the most marijuana dispensaries per capita, it has generated the least amount of tax revenue from cannabis compared to other states with licensed markets. This is unfortunate, as revenue generated from licensed cannabis can be utilized to fund important institutions and initiatives, from education to infrastructure to healthcare.

Market Success May Lead to Adult-Use

Despite some pitfalls, Oklahoma’s medical cannabis market has been extremely successful, with sales expected to increase to $950 million by 2025.

These promising projections set the stage for adult-use to be legalized. Possession is already decriminalized, so this would be the next step. Adult-use legalization is crucial both for economic opportunity, broadening access for consumers who feel that cannabis will improve their wellbeing and for overall de-stigmatization.

We as a responsible Oklahoma industry should band together to ensure that the same freedoms that propelled our successful medical cannabis market are given to the inevitable adult-use market, while also advocating for quality control and testing requirements that maximize consumer safety and confidence.

Arshad "Adam" LasiArshad "Adam" Lasi

Arshad "Adam" Lasi

Arshad “Adam” Lasi is CEO of Nirvana Group, a vertically integrated family-owned cannabis company in Oklahoma. Their operations include a cultivation and extraction facility, a processing facility, house brands and the only cannabis cash & carry concept in Oklahoma. Nirvana Group also owns an expanding list of medical dispensaries throughout the state.

This Post Has 3 Comments
  1. This op-ed accurately sums up several of the pros and cons of Oklahoma’s booming cannabis market. Where it falls short is highlighting the multi-billion dollar economic impact resulting from the legal medical marijuana industry in Oklahoma. Previously dormant and dying communities across this state have received a substantial injection of life as dispensaries fill boarded up downtown storefronts, unparalleled property acquisitions drive up values in urban, suburban and rural communities, and non-cannabis businesses stay busier than they have in decades (good luck finding quality electricians, HVAC specialists, plumbers, and contractors who aren’t backlogged with cannabis projects). We are very proud of the growth and impact of Oklahoma’s cannabis industry, but there’s still a long way to go towards building the most ideal cannabis program in the nation.

    One correction to this piece: on-site cannabis consumption is NOT allowed at bars. An Oklahoma liquor license may be revoked for allowing a state or federal crime to be committed upon the licensed premises. Cannabis remains illegal at the federal level and on-site consumption at a licensed liquor premises remains very much impermissible according to the Oklahoma Alcoholic Beverage Law Enforcement (ABLE) Commission.

    We encourage all businesses engaged in cannabis in Oklahoma to participate in the effort to educate our community on the diverse cannabis industry and the never-ending fight to continue building the most attractive cannabis program/market in the nation by becoming involved in the oldest, largest, and most engaged cannabis chamber of commerce in Oklahoma, the Oklahoma Cannabis Industry Association, who provided the funding for and ran the campaign to legalize medical marijuana in Oklahoma. Our industry and program will only achieve its real potential through active engagement of the thousands of enterprises comprising Oklahoma’s cannabis industry.

    1. Thank you for the insight and clarification. Agreed there are many promising aspects of Oklahoma’s market and I look forward to what the future holds.

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