{"id":2750,"date":"2021-12-02T11:33:46","date_gmt":"2021-12-02T11:33:46","guid":{"rendered":"http:\/\/CAIiENku1f8_IyuA6UsM0S_vnqwqGQgEKhAIACoHCAow3cCjCzCgy7sDMKy5hAc"},"modified":"2021-12-02T11:33:46","modified_gmt":"2021-12-02T11:33:46","slug":"oklahoma-medical-marijuana-businesses-demand-steps-to-combat-illicit-grows-marijuana-business-daily","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=2750","title":{"rendered":"Oklahoma medical marijuana businesses demand steps to combat illicit grows &#8211; Marijuana Business Daily"},"content":{"rendered":"<div class=\"image-full\">\n<div class=\"bialty-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1250\" height=\"720\" src=\"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/12\/oklahoma-medical-marijuana-businesses-demand-steps-to-combat-illicit-grows-marijuana-business-daily.webp\" class=\"attachment-full size-full wp-post-image\" alt=\"Image of a marijuana cultivation site\"><\/div>\n<\/div>\n<div class=\"article-content\">\n<div class=\"bialty-container\">\n<p>Concerns over expanding illicit cannabis operations in Oklahoma are putting pressure on regulators and law enforcement to take action to stamp out the alleged criminal activity some argue is hiding behind the state\u2019s booming legal medical marijuana industry.<\/p>\n<p>To aid in this, medical cannabis companies in Oklahoma are calling on state regulators to move ahead with:<\/p>\n<ul>\n<li>Implementing a seed-to-sale tracking system.<\/li>\n<li>Increasing inspections of licensed marijuana businesses.<\/li>\n<li>Refining testing rules to ensure product safety.<\/li>\n<li>Raising the price of a business license.<\/li>\n<\/ul>\n<p class=\"ad-header hide-for-small-only\">Advertisement<\/p>\n<div id=\"in-article-ad-383099658\" class=\"in-article-ad\"> <\/div>\n<p>The demands come as the state\u2019s Bureau of Narcotics in November declared Oklahoma the <a href=\"https:\/\/www.news9.com\/story\/6183517f3a55300c019d5ea2\/obn-agents-say-oklahoma-has-become-countrys-1-supplier-of-illegal-marijuana\">No. 1 supplier of illicit cannabis<\/a> in the country.<\/p>\n<p>The OBN agents said criminal groups from outside the U.S. are responsible for operating 25% of the state\u2019s 8,500 medical marijuana grow licenses.<\/p>\n<p>While that \u201cNo. 1\u201d claim might be difficult to verify \u2013 cannabis growing regions in Northern California and southern Oregon also produce large amounts of underground product, for example \u2013 the statement illuminates how Oklahoma\u2019s <a href=\"https:\/\/mjbizdaily.com\/why-red-oklahoma-is-home-to-a-booming-medical-marijuana-market\/\" target=\"_blank\" rel=\"noopener\">loose MMJ regulatory framework<\/a> and low barriers to entry can produce&nbsp;unintended consequences.<\/p>\n<p>\u201cThe state could have and should have made it more difficult to get a business license,\u201d said Denise Mink, who owns the <a href=\"https:\/\/mjbizdaily.com\/digital-issues\/november-december-2020\/?paged=62\" target=\"_blank\" rel=\"noopener\">Med Pharm dispensary<\/a> outside Tulsa with her husband.<\/p>\n<p>As of Nov. 10, the Oklahoma Medical Marijuana Authority (OMMA) had issued <a href=\"https:\/\/www.news9.com\/story\/6195d79f7e66340c24d1a415\/wild-west-of-weed:-oklahoma-struggles-to-regulate-booming-medical-marijuana-industry%C2%A0\" target=\"_blank\" rel=\"noopener\">13,281 marijuana business licenses<\/a> since legalizing MMJ in 2018. That includes cultivation, manufacturing and retail permits.<\/p>\n<p>Oklahoma boasts the highest number of cannabis retail outlets in the nation.<\/p>\n<p>According to the <a href=\"https:\/\/insights.mjbizdaily.com\/factbook\/\" target=\"_blank\" rel=\"noopener\">2021 MJBizFactbook<\/a>, sales via licensed dispensaries are projected to total $900 million to $1.1 billion this year, up roughly 25% from 2020.<\/p>\n<p>\u201cThe unchecked expansion of the cannabis industry is increasing all kinds of illegal activity throughout the state,\u201d said Seth Wiggins, president of Colorado-based Clear Cannabis, a maker of marijuana concentrates that does business in Oklahoma.<\/p>\n<p>\u201cVague regulation and scarce law enforcement breed opportunities for legally flexible opportunists and flat-out illegal activity.\u201d<\/p>\n<p>Anthony Coniglio, president of Connecticut-based NewLake Capital, a cannabis REIT with properties across the country, agreed.<\/p>\n<p>He noted that \u201ctoo many licensees create an oversupply in the market, which typically leads to a lack of profitability \u2013 driving licensees to cut corners or sell product into the black market to break even or accomplish a profit.\u201d<em>&nbsp;<\/em><\/p>\n<p><strong>Oregon comparison<\/strong><\/p>\n<p>Another cannabis market with a low barrier to entry for new businesses, Oregon is experiencing a similar problem with illegal cannabis operations.<\/p>\n<p>And it serves as a fitting comparison to Oklahoma\u2019s freewheeling medical cannabis market, where there\u2019s no cap on the number of business licenses.<\/p>\n<div class=\"columns large-12 medium-12 small-12 con_cta_wrapper\">\n<p><b>Solvent or Solventless? We can help.<br \/><em>MJBizDaily<\/em> Cannabis Extraction Buyers Guide&nbsp;<\/b><\/p>\n<div id=\"lp-pom-text-456\" class=\"lp-element lp-pom-text nlh\">\n<p>Get strategies and tips from expert processors on choosing cannabis extraction systems, costs, safety precautions and more. Curated by <em>MJBizDaily.<\/em><\/p>\n<p>Inside:<\/p>\n<ul>\n<li>How to choose between solvent-based and solventless extraction methods<\/li>\n<li>Learn which strains are most efficient for each extraction process<\/li>\n<li>Tips on safety precautions from design to training to protective equipment<\/li>\n<\/ul>\n<\/div><\/div>\n<p>For instance, officials in Jackson County, in southern Oregon, recently planned to ask the state <a href=\"https:\/\/mjbizdaily.com\/southern-oregon-county-seeks-7-3-million-to-help-fight-illegal-marijuana-grows\/\" target=\"_blank\" rel=\"noopener\">for nearly $7.3 million<\/a> to help fight illicit grows that have been proliferating across the region.<\/p>\n<p>Officials from neighboring counties in the state have expressed similar concerns.<\/p>\n<p>A few years ago, Oregon found itself facing conditions that are similar to those in Oklahoma today \u2013 lots of licenses and no limit on the number issued.<\/p>\n<p>In response, Oregon regulators <a href=\"https:\/\/mjbizdaily.com\/oregon-marijuana-industry-wins-regulatory-relief-receives-surprise-licensing-news\/\" target=\"_blank\" rel=\"noopener\">imposed a moratorium<\/a> on new licenses in 2018 because the state had become backlogged in processing applications.<\/p>\n<p>Overproduction of cannabis also had caused a market glut, regulators contended.<\/p>\n<p>\u201cThere was always the fear that what happened in Oregon will happen here, and it looks like those fears were well-placed,\u201d Mink said.<\/p>\n<p>States with stricter regulations and more rigorous license applications than Oklahoma are able to ensure medical marijuana products are staying within state borders, as are associated tax dollars, said Sara Gullickson, CEO of Arizona-based consulting firm The Cannabis Business Advisors.<\/p>\n<p>\u201cIn free markets where there is free rein, you are going to have trouble,\u201d she added.<\/p>\n<p>Wiggins said successful cannabis legalization rests on a delicate balance of regulation and free-market economics.<\/p>\n<p>\u201cOklahoma\u2019s current law incentivizes operators to grab market share and first-mover advantage by any means possible,\u201d he added.<\/p>\n<p><strong>Tracking<\/strong><\/p>\n<p>As of the end of June, a judge\u2019s order <a href=\"https:\/\/kfor.com\/news\/local\/judge-to-hear-from-oklahoma-dispensaries-against-seed-to-sale-program\/\" target=\"_blank\" rel=\"noopener\">remained in place<\/a> that prevented the rollout of Florida-based Metrc\u2019s seed-to-sale tracking system in Oklahoma after a group of dispensaries <a href=\"https:\/\/mjbizdaily.com\/oklahoma-judge-suspends-states-cannabis-seed-to-sale-requirement\/\">sued the OMMA<\/a> over the program\u2019s implementation.<\/p>\n<p>Some industry officials see traceability as a key component to helping stop the growth of the illicit cannabis market.<\/p>\n<p>\u201cOnce Oklahoma implements its statewide seed-to-sale tracking system, along with stricter enforcement, many of the bad actors will be naturally pushed out of the space,\u201d said Eric Leslie, chief marketing officer and co-owner of Denver-based edibles brand Cheeba Chews, which does business in Oklahoma.<\/p>\n<p><strong>Inspections<\/strong><\/p>\n<p>OMMA Director Adria Berry started in August and quickly <a href=\"https:\/\/mjbizdaily.com\/oklahoma-medical-marijuana-chief-calls-for-more-inspectors-regulations\/\" target=\"_blank\" rel=\"noopener\">asked for more inspectors<\/a> to help keep up with the rapidly increasing number of new businesses.<\/p>\n<p>To that end, the agency aims to hire 40 more compliance inspectors.<\/p>\n<p>\u201cIt will get way better when inspections finally start happening,\u201d said Chip Paul, chair of Oklahomans for Health, based in Owasso.<\/p>\n<p>\u201cWe have folks who have been operating for years and have never been inspected.\u201d<\/p>\n<p><strong>Testing<\/strong><\/p>\n<p>Regulators and lawmakers are working to refine rules around product testing.<\/p>\n<p>New rules went into effect in November, including <a href=\"https:\/\/mjbizdaily.com\/new-oklahoma-medical-cannabis-rules-include-changes-to-pre-rolls-testing\/\" target=\"_blank\" rel=\"noopener\">forbidding the operation<\/a> of a marijuana testing lab by an entity that has an ownership stake or a financial interest in a cultivation operation or a dispensary.<\/p>\n<p>\u201cThe OMMA\u2019s priority must be to eradicate activity within the illicit market situation and ensure proper testing and regulations that give consumers access to top-quality and safe products,\u201d said Arshad Lasi, CEO of the Nirvana Group, a vertically integrated medical marijuana company in Tulsa.<\/p>\n<p>He added the licensed industry needs to call for regulations that \u201ccreate better opportunities for new and existing businesses to operate legally and offer safe, properly tested products for consumers.<\/p>\n<p>\u201cWith opportunity, fair prices and safety standards in place, ideally that would help to curb unlicensed market competition.\u201d<\/p>\n<p><strong>Raise the bar?<\/strong><\/p>\n<p>Several industry officials interviewed for this story suggested one solution to the problem of too many companies would be for regulators to increase the price for new business licenses.<\/p>\n<p>Right now, it costs Oklahomans only $2,500 for an MMJ business license. That covers the application fee and the license fee for the first year.<\/p>\n<p>Neighboring Arkansas, by comparison, charges $7,500 for a dispensary application. Once a license is awarded, licensees must pay a $15,000 fee and post a $100,000 performance bond.<\/p>\n<p>For cultivation permits, Arkansans must pony up $15,000 to apply and then pay a $100,000 fee for the awarded license.<\/p>\n<p>\u201cConsidering Oklahoma has more business licenses than the entire West Coast combined, with just a handful of the population, it looks like the free market backfired to me,\u201d Med Pharm\u2019s Mink said.<\/p>\n<p>\u201cThis has led to a flooded market that is not sustainable.\u201d<\/p>\n<p><em>Bart Schaneman can be reached at <\/em><a href=\"mailto:bart.schaneman@mjbizdaily.com\" target=\"_blank\" rel=\"noopener\"><em>bart.schaneman@mjbizdaily.com<\/em><\/a>.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Concerns over expanding illicit cannabis operations in Oklahoma are putting pressure on regulators and law enforcement to take action to stamp out the alleged criminal activity some argue is hiding behind the state\u2019s booming legal medical marijuana industry. To aid in this, medical cannabis companies in Oklahoma are calling on state regulators to move ahead with: Implementing a seed-to-sale tracking system. Increasing inspections of licensed marijuana businesses. Refining testing rules to ensure product safety. Raising the price of a business license. Advertisement The demands come as the state\u2019s Bureau of Narcotics in November declared Oklahoma the No. 1 supplier of&#8230; <\/p>\n","protected":false},"author":1,"featured_media":2751,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[2],"tags":[],"class_list":["post-2750","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured"],"jetpack_featured_media_url":"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/12\/oklahoma-medical-marijuana-businesses-demand-steps-to-combat-illicit-grows-marijuana-business-daily.webp","_links":{"self":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts\/2750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2750"}],"version-history":[{"count":0,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts\/2750\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/media\/2751"}],"wp:attachment":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}