THE HIGH CULTURE COMMENTARY
Growing up OKLAHOMA’S MEDICAL CANNABIS INDUSTRY IS SLOWLY TRANSITIONING FROM ITS WILD WEST LAISSEZ-FAIRE ROOTS TO A MORE REGULATED MODEL WITH EXPANDED OVERSIGHT AND A TEMPORARY MORATORIUM ON BUSINESS LICENSURE. By Donald Gies and Cassity Gies
Oklahoma’s legislative session saw nearly a hundred proposed cannabis bills, but after winding their way through the process, only a dozen were ultimately signed by Gov. Kevin Stitt. A two-year moratorium and tiered licensing stirred some angst within the industry with others making fewer waves, but Oklahoma will be seeing some major shifts in current law. One of the largest adjustments centers around the agency regulating the industry — The Oklahoma Medical Marijuana Authority will now be a standalone state agency receiving increased regulatory authority. House Bill 1543 separated the OMMA from the Oklahoma State Department of Health. As a freestanding agency, OMMA will absorb duties currently being overseen by OSDH. The executive director of OMMA will be appointed by the governor with advice and consent of the Senate and will have authority to conduct hearings, issue agency orders and impose disciplinary actions. As this is happening, House Bill 3208 places a two-year moratorium on processing new cultivation, processing and retail licenses. Slated to end on Aug. 1, 2024, the moratorium could be terminated at any time prior to that date, if OMMA’s executive director determines that all pending licensing reviews, inspections or investigations have been completed by the agency. Because cannabis entrepreneurs can still transfer licensure, the cannabis industry may be seeing a competitive seller’s market. All applications submitted prior to Aug. 1 of this year will be reviewed and processed and, while OMMA’s licensure numbers slipped more than 3 percent from April to May, the Authority should expect to see a big run on application submissions until the deadline. The most controversial bill passed this season, House Bill 2179, introduces a tiered licensing system for Oklahoma cannabis businesses based upon square footage, production amounts and annual tax revenues. This bill raises serious implications on the constitutionality of the process that led to its approval. The bill’s label includes the word “fees” as its own distinct subpart and
the OMMA promises that this act “will certainly raise revenues.” Why does this matter? Because the Oklahoma Constitution heightens requirements for approving revenue bills, and when HB 2179 passed the House with sixty votes last month, it failed to receive three-fourths vote from both chambers. Unlike other bills, which only require a majority vote from the House, a revenue bill must have either been passed by Oklahoma voters in the general election or passed with three-fourths vote from both chambers. Data shows roughly $60 million dollars of excess revenue from licensing fees alone has been used to support the state government since 2019. In this way, HB 2179 could be a revenue bill in the strictest sense, and if so, its passage violated the mandated procedure. Another bill generating conversation, House Bill 3 5 3 0 , creates the “ C o u n t y Cassity Gies, Photo provided. Sheriff Public Safety Grant Revolving Fund,” which allocates the first $5 million dollars of cannabis excise tax to county sheriff departments. The bill also requires OMMA to establish programs and provide funding to support county sheriffs in enforcing the requirements of state cannabis law. Each county would receive roughly $65,000 annually without adjustment for their population or the number of active cannabis businesses in the county. In addition to laws affecting the Authority and commercial cannabis businesses, some will affect individual patients. Senate Bill 1367 doubles the
initial penalty for cannabis patients or caregivers who share three grams or less with an unauthorized person. Violating this law will now be a $400 fine for the first offense Donald Gies, Photo provided. and a $1,000 fine for second violations and may also be may have slipped through the cracks of accompanied by the revocation of lithe laboratory process, adding proteccenses. Cannabis businesses transfertion for patient safety. Laboratory ring or selling cannabis to unauthorized testing will also be seeing increased individuals will receive a $5,000 initial scrutiny by this time next year under a fine and subseparate bill passed during the session. sequent vioThe recurring theme of cannabis lations will compliance also touches on smaller be $15,000 details in the industry. For example, in addition House Bill 3019 allows edible packagto other ing to be clear so patients can see the penalties. product. The bill mandates opaque exit House Bill packaging at the point of sale and also 3971 will requires new warning language on the bring a more label: “For use by licensed medical watchful eye marijuana patients only” and “Keep to day-to-day out of reach of children.” These are dispensary things secret shoppers will be looking operations for, and, if not clearly understood and and puts implemented, could result in complipressure on ance infractions for cannabis busim a n ager s nesses owners. and owners Oklahoma’s latest legislation introto do their duces additional rules for the cannabis due diligence industry, with increased focus on with training strengthening OMMA’s ability to toward comenforce regulation. These new regulapliance. Also tions, coupled with the mandatory known as the implementation of METRC (the state’s “OMMA contracted seed-to-sale software trackS e c r e t ing system) advance the legitimacy of Shopper the state’s medical marijuana program. Act,” this law will provide for OMMA Now four years old, our medical canto inspect at least 50 dispensaries annabis program could be a model for nually by deploying undercover shopother states creating their own and pers to purchase products and submit having structured rules and processes them for quality control testing. lessens stigmas and quiets naysayers. Multiple parts of this bill inspire optiWith legislation cutting OMMA’s apron mism about the feedback and insight strings and increasing enforcement, that OMMA will receive by participatour beloved baby industry, created overing in the purchasing process with innight by the vote of the people, is no dividual transactions. Double-checking longer eating at the kid’s table. the testing process and deterring dispensary owners from selling to unauDonald Gies is the founder of thorized individuals should encourage Gies Law Firm, which specializes businesses to increase their employee in Oklahoma medical cannabis law. training. This bill creates an opportuCassity Gies is an attorney at nity to catch deficient products that Phillips Murrah. HIGH CULTURE OKGA Z ET TE .COM | J U N E 1 5 , 2 0 2 2 29
