Despite facing criticism for its marijuana enforcement regulations in 2023, Oklahoma remains steadfast in its commitment to cracking down on noncompliant businesses. The state’s regulators have come under fire for what some perceive as overstepping their bounds, but proponents argue that increased oversight is necessary to restore wholesale prices and eliminate illicit operators. Oklahoma’s Medical Marijuana Authority (OMMA) has conducted thousands of facility inspections and operational status visits, resulting in numerous administrative cases and seizures of illicit marijuana. Despite these efforts, wholesale prices continue to remain low due to an oversupply of cannabis in the state. However, Oklahoma shows no signs of backing down, as the OMMA plans to intensify its inspection efforts and implement new regulations to ensure compliance.
Oklahoma Regulators Crack Down on Noncompliant Businesses
In recent years, Oklahoma has experienced a significant increase in both regulated and illicit marijuana production. To address this issue, regulators have taken a proactive approach by cracking down on businesses that they believe to be noncompliant. While some critics argue that the regulators have overstepped their bounds, others believe that increased oversight is necessary for wholesale prices to recover.
According to the Oklahoma Medical Marijuana Authority (OMMA), there were 7,066 active licenses for cannabis grows in the state in January 2023. However, by the end of the year, that number had decreased to only 4,880. This decrease is a result of the regulator’s efforts to tackle noncompliant businesses and illicit operators efficiently and effectively, while still prioritizing patient and public health.
Regulators have conducted over 7,000 facility inspections and made more than 4,600 operational status visits in 2023. They have also utilized data from various sources such as the online Business Complaint Form, the inventory-tracking system Metrc, and NCS Analytics to identify illicit and noncompliant activity. These efforts have resulted in 1,314 administrative cases and the seizure of large quantities of illicit marijuana.
To further prevent noncompliant businesses from entering the market, a moratorium on cultivation licenses was extended until 2026. Additionally, the regulator has implemented a rigorous license application-review process. These measures aim to protect the integrity of the state’s medical marijuana program and ensure that only law-abiding operators are allowed to participate.
Moratorium on Cultivation Licenses
The moratorium on cultivation licenses was initially put in place in response to the surge in Oklahoma’s medical marijuana market after legalization in 2018. With low licensing costs and few barriers to entry, the market became popular among entrepreneurs. However, authorities later discovered that some operators were skirting the rules by using legal offices to bypass the requirement for Oklahoma residents to have 75% ownership in licensed cannabis operations.
To address this issue, the moratorium on cultivation licenses was extended until 2026. This extension allows regulators to thoroughly review new license applications and prevent bad actors from entering the market. By implementing stricter regulations and ensuring compliance, the state aims to maintain the integrity of its medical marijuana program and protect the interests of patients and the public.
Oversupply and Illicit Market Concerns
One of the significant challenges faced by Oklahoma’s medical marijuana market is oversupply. In a study conducted by the OMMA, it was found that the state was producing 32 times more marijuana than needed for its registered MMJ patients. This oversupply has created concerns about the involvement of licensed operators in the illicit market.
The study suggested that licensed operators contributing to oversupply are likely adding to the illicit market both at the cultivation and retail levels. This indicates a potential connection between the regulated and illicit markets, raising questions about the integrity of the industry. To address this issue, regulators have intensified their efforts to crack down on noncompliant businesses and illicit operators.
Rejection of Adult-Use Marijuana Legalization
In March, Oklahoma voters rejected a ballot initiative to legalize adult-use marijuana in the state. Despite the market’s oversupply and concerns about the illicit market, the majority of voters decided against expanding the legalization of marijuana beyond medical use. This decision highlights the diverse opinions and priorities of Oklahoma residents when it comes to cannabis laws.
While adult-use marijuana legalization could have potentially addressed some of the issues related to oversupply and the illicit market, the rejection of the ballot initiative indicates that the state’s residents are still not ready for such a change. As a result, regulators must find alternative ways to regulate the industry and ensure compliance with existing laws.
Wholesale Prices and Oversupply
The oversupply in Oklahoma’s medical marijuana market has led to an abundance of product, resulting in low wholesale prices. According to wholesale platform LeafLink, wholesale marijuana prices have remained under $1,000 per pound throughout the year. Despite the efforts of regulators, wholesale prices are unlikely to change significantly in the near future.
A comparison with the Massachusetts market further illustrates the impact of oversupply on pricing. While Oklahoma’s monthly marijuana sales are around $60 million, Massachusetts’ sales reached more than $120 million per month in 2023. Additionally, Oklahoma’s outdoor growing conditions have allowed for the cultivation of more than 600,000 cannabis plants in a single month. These numbers, along with the presence of untracked plants and those bound for the illicit market, contribute to the oversupply and the challenges faced by the state’s regulators.
Criticism of OMMA’s Actions
As regulators crack down on noncompliant businesses, some operators have expressed concerns that law-abiding businesses are also being affected. They argue that the Oklahoma Medical Marijuana Authority (OMMA) is taking action beyond what is necessary, leading to unintended consequences for compliant operators.
In response to these allegations, the OMMA issued a memo stating that the narrative of shutting down businesses for minor violations is untrue and aimed at spreading unnecessary fear. The regulator emphasizes that its goal is to maintain the integrity of the industry and protect the interests of patients and the public.
However, critics argue that the cost of hiring legal representation and increased licensing costs prevent some operators from having a fair hearing when facing license revocation. They believe that the OMMA should provide more support and understanding for compliant operators, ensuring that their businesses are not unjustly affected by regulatory actions.
OMMA’s Inspection Efforts and New Laws
The Oklahoma Medical Marijuana Authority (OMMA) remains committed to enforcing regulations and ensuring compliance within the industry. The regulator does not plan to slow down its inspection efforts and has implemented new laws to enhance oversight and control.
In addition to facility inspections and operational status visits, the OMMA will focus on dispensaries in its inspection efforts. To gather more information about dispensary practices, the regulator has introduced secret shoppers who will undergo lab testing on products purchased from dispensaries. This measure aims to improve the quality and safety of products available to patients.
To strengthen the qualifications and knowledge of employees in the industry, the OMMA now requires employees at cannabis companies to obtain OMMA certification. This certification ensures that employees have a comprehensive understanding of the regulations and guidelines governing the medical marijuana program.
Furthermore, MMJ cultivators are now required to have a surety bond or provide proof of land ownership. These requirements aim to increase accountability and prevent noncompliant cultivation practices.
OMMA’s Determination to Continue Enforcing Regulations
Despite the challenges and criticisms faced, the Oklahoma Medical Marijuana Authority (OMMA) remains determined to continue enforcing regulations and addressing noncompliance within the industry. The regulator understands the importance of maintaining the integrity of the state’s medical marijuana program and protecting the interests of patients and the public.
Reflecting this determination, the OMMA has no plans to slow down its inspection efforts. By utilizing data-driven decisions and establishing new laws, the regulator aims to effectively identify illicit activity, prevent noncompliant businesses from entering the market, and ensure the sustainable and responsible growth of the industry.
Oklahoma’s regulators have taken a firm stance against noncompliant businesses and illicit operators within the state’s medical marijuana industry. Through facility inspections, operational status visits, and the use of data, regulators have made significant efforts to identify and address noncompliance.
While criticisms have been raised about the impact on compliant operators and the oversupply in the market, the Oklahoma Medical Marijuana Authority (OMMA) remains dedicated to enforcing regulations and maintaining the integrity of the industry.
With ongoing inspection efforts, new laws, and a determination to address noncompliance, the OMMA aims to create a sustainable and responsible medical marijuana program that benefits patients, the industry, and the public.