Oklahoma could put a cap on medical marijuana business licenses if a recently introduced bill is passed into law, said Tulsa medical marijuana attorney Stephen Cale.
“This is a really bad bill. If enough people voice opposition to this bill, it could be dead in the water,” Cale said. “But, if you’ve thought about getting into the medical marijuana business, now is the time to do it just in case this bill gets passed into law.”
State Rep. Josh West (R-Grove) originally introduced his HB 2272 as a shell bill, Cale said. A shell bill typically has no substantive provisions. The sponsor of the bill introduces it to be later amended with actual legislative provisions. On February 2nd, West introduced a committee substitute adding substantive provisions to the shell bill.
If passed into law, the measure would be known as the Oklahoma Cap on Medical Marijuana Business Act of 2021. Here’s a summary of what it would do:
Public Announcement By OMMA
The Oklahoma Medical Marijuana Authority (OMMA) must make a public announcement that the number of dispensary, processor, and grower licenses will be capped beginning Sept. 1, 2021. OMMA would have to make the public announcement on July 21, 2021, or 15 days after the effective date of the Act.
Determine And Set Cap On Medical Marijuana Business Licenses
To determine the final number of licenses, the OMMA would first process all pending applications for each license category received before Sept 1st. Then, it would add that number to the total number of active licenses in each category as of Sept. 1st.
No More New Dispensary, Processor, Or Grower Licenses | Voucher Exception
The OMMA could not accept dispensary, processor, or grower license applications beginning September 1, 2021. There would be a business voucher exception if the number of active licenses falls below the cap.
Provide Limited Certificate of Compliance Exception For License Renewals
“The Certificate of Compliance requirement has been a major speed bump for some businesses who are getting or renewing their medical marijuana business licenses,” Tulsa medical marijuana attorney Stephen Cale said. “There are some in larger cities who have been waiting for several months to get one.”
In 2019, the State Legislature enacted the Oklahoma Medical Marijuana and Patient Protection Act. A provision of this act gave birth to the Certificate of Compliance. Specifically, the provision (Title 63, Section 427.14) provides that a medical marijuana business license “shall not be issued until all relevant local licenses and permits have been issued by the municipality, including but not limited to an occupancy permit or certificate of compliance.”
Another provision in the act (Title 63, Section 427) also created a Certificate of Compliance requirement. Under this law, the certificate must certify “compliance with zoning classifications, applicable municipal ordinances and all applicable safety, electrical, fire, plumbing, waste, construction and building specification codes.”
Under the cap law, those who have active licenses before September 1, 2021, would not be required to submit a Certificate of Compliance before submitting a renewal application. Instead, applicants will have 180 days from the time that the application is temporarily approved to submit the certificate.
However, if the applicant has not submitted the Certificate of Compliance within the 180-day timeframe, the license will be terminated and cannot be extended.
Deny Renewal Of “Inactive” Dispensary Licenses
Beginning Sept. 1, 2022, any medical marijuana dispensary licensee that is not actively using the license for 18 months will not be allowed to renew it. “Active use” requires that a dispensary have at least $5,000 per month in gross sales calculated on a 12-month rolling average. Gross monthly sales will be calculated by taking the total amount of income and subtracting all discounts and sales and excise tax collected on medical marijuana and products.
Deny Renewal Of “Inactive” Grower Licenses
Beginning Sept. 1, 2022, any medical marijuana grower licensee that is not actively using the license for 18 months will not be allowed to renew it. “Active use” requires that a grower “have under cultivation” at least 50 marijuana plants per month, calculated on a 12-month rolling average.
Deny Renewal Of “Inactive” Processor Licenses
Beginning Sept. 1, 2022, any medical marijuana processor licensee that is not actively using the license for 18 months will not be allowed to renew it. “Active use” requires that the processor have at least $5,000 per month in gross sales calculated on a 12-month rolling average. Gross monthly sales will be calculated by taking the total amount of income and subtracting all discounts.
Provide For A Transferable Or Sellable Medical Marijuana Business Voucher When License Numbers Fall Below A Certain Level
The Oklahoma Medical Marijuana Authority would publicly announce an application process for a medical marijuana business license voucher. The announcement would include beginning and ending dates for the OMMA to accept applications for the vouchers. This window of opportunity would be for 60 days.
The medical marijuana business license voucher will authorize the owner to convert the voucher to an active medical marijuana business license in the same category for which the voucher was applied for and issued. For example, a dispensary voucher would be for only a dispensary license.
The voucher would be good for 60 months from the date of issuance. However, if the voucher is not converted to an active medical marijuana business license, or an application to convert it is not submitted within 60 months, the voucher will be invalid.
The application fee for the voucher will be $2,500 payable at the time that the application is submitted to the OMMA. However, upon being awarded the voucher, the applicant must pay a $10,000 fee. Payment must be submitted within 15 days of notice of being awarded the voucher.
Also, the owner of the voucher could transfer or sell it one time in any calendar year upon application to the OMMA. However, the owner would have to pay a $2,500 transfer fee. The money collected from this fee would go into the State’s general revenue fund.
Whoever buys or receives the transferred voucher would have to pay a $25,000 fee to the Oklahoma tax commission per sale or transfer. This fee must be paid at the time of sale or transfer. This fee would go into the State’s general revenue fund.
Working With the Cale Law Office For Your Medical Marijuana Business
The Cale Law Office is dedicated to the practice of medical marijuana law and criminal defense. Our mission is to achieve the best possible results for our clients through hard work, attention to detail, and aggressive representation. This is done while maintaining the highest level of professionalism, integrity, and ethical standards.
We have helped numerous people set up marijuana businesses and acquire their commercial medical marijuana licenses. If you want a medical marijuana business license, marijuana compliance auditing, or need legal representation in the Oklahoma medical marijuana industry, call the Cale Law Office at 918-277-4800. Your initial consultation is free. Or, you can contact us through the web.
Tulsa medical marijuana attorney Stephen Cale is the founder of Cale Law Office, located in Tulsa, Oklahoma. He has been serving people with legal needs for more than 21 years.
Cale works with a number of marijuana-related organizations. He is a Legal Committee member of the National Organization for the Reform of Marijuana Laws (NORML). Additionally, he serves on the board of Green Country NORML, a Tulsa chapter of NORML. He also serves as a board member for, and is on the Standard Operating Procedures steering committee for, OK4U Approved, a medical marijuana patient union and trade organization.