Oklahoma medical marijuana demand exceed expectations by a significant margin

Despite only having been legal for a little over a year, (October 2018), the medical marijuana business in Oklahoma is booming. The demand for and sale of, medical marijuana has far outstripped any projections from the city, Oklahoma Medical Marijuana Authority and even suppliers had made.

Data released by the Oklahoma Tax Commission has shown that sales of medical marijuana in the state exceeded $258 million in the first ten months of this year. New projections have sales exceeding $350 million by year end, increasing further during 2020.

Growing market

Despite being late to the party, demand in Oklahoma has surpassed states that had already legalized medical cannabis. States like Illinois, Maryland and Ohio all had a strong start and are showing rapid growth but have been eclipsed by Oklahoma.

As of November 1, licensed users of medical cannabis have surpassed 210,000 with more applications awaiting processing. The initial estimate of applications stood at around 25,000 for 2019. We are likely to see ten times that estimate by year end.

That number, 210,000 is almost 5% of the state’s population. That’s more licensed users per head than any other state in the country.

Some of this growth has been attributed to Oklahoma’s ‘friendly’ free market system that allows for unlimited business licenses, accessible industrial premises, straightforward compliance and regulations and the prevention of zoning restrictions from local authorities which may impact the industry.

Doctors can also recommend medical marijuana for any condition they like.

The combination of this, plus an open willingness to use medical marijuana has resulted in huge growth in the state. As of November 2019, there were license applications from:

  • 4,931 medical cannabis growers.
  • 1,415 medical cannabis processors.
  • 2,168 dispensaries.

It isn’t clear whether all of these licenses have resulted in operating businesses but the number of applications is impressive!

The combination of being business friendly, allowing doctors to prescribe medical marijuana however they like and the number of businesses popping up to supply this demand means the industry in Oklahoma is going to keep growing from strength to strength. While it will of course reach saturation at some point, it is likely to be a long time yet before we see it!

Oklahoma leading the nation in cultivation licensing

Oklahoma may have been a little late to the MMJ party but it soon caught up. According to the latest 2020 data, the state issued more cultivation licenses for medical marijuana than anywhere else in the country.

Even more than California!

Oklahoma cultivation licenses

According to data from Cannabiz Media, Oklahoma gave out more cannabis cultivation licenses than California and Michigan who came second and third.

The data has Oklahoma approving 2,392 new cultivation licenses for medical marijuana in 2020.

From left, Jake Chilcoat, executive vice president, and Matt Baker, president, pose for a photo with one-pound bags of cannabis flowers before they are broken down into grams at CBD Plus USA, 420 N Pennsylvania, in Oklahoma City, Monday, Dec. 3, 2018. Photo by Nate Billings, The Oklahoman

California was second with 2,304 and Michigan a distant third with 333.

That means there are a total of 18,172 legal cultivation businesses out there, with a significant portion of them right here in Oklahoma.

The latest figures have us with a total of 5,265 licenses in all.

Oklahoma, California, Michigan, Oregon, Colorado and Washington have 89% of the cannabis cultivation market between them. With more on the way.

Cash crop

It isn’t all about the licenses either. Oklahoma made $6 million out of licensing in 2020. It also registered $25 million from commercial medical marijuana licenses in 2020. That’s double the previous year!

With no limit on the number of plants or the size of facility in Oklahoma, it seems our fair state is the place to be if you need medical marijuana!

Sales of MMJ in Oklahoma reflects this explosive growth.

In 2019, the state measured $385 million in MMJ sales. That was set to double in 2020. That’s almost $800 million, from a new crop!

Part of that increase in sales must be down to the pandemic. Some of it also the increased awareness of the new industry and availability of Cannabis cards.

Either way, that’s important income for the state that could be put to good use given the state of the economy right now.

Crops help coping with COVID

For those who need pain relief or use marijuana for medical reasons, the pandemic has been a tough time. While we have been more relaxed than many countries, we have still suffered at the hands of the pandemic.

Fortunately, Oklahoma was ahead of the curve, again. The state declared medical marijuana businesses as essential, allowing them to stay open and even offer curbside pickup services to customers.

Dispensaries were made exempt from the stay at home order and classed as essential businesses. While small print prevents full delivery to customers, dispensaries are permitted curbside deliveries.

Many have taken this up and provide the service to their local customers.

Whatever else is going on in the state, in the country and in the world, the Oklahoma medical marijuana industry is going from strength to strength. Growth is rapid and so far, none of the fears of legalizing MMJ have been realized.

As long as those trends continue, Oklahoma and MMJ have a bright future!

Dixie Brands entering the Oklahoma medical marijuana industry

Dixie Brands Logo

One of the best-known brands in the industry, Dixie Brands has announced it will be entering the burgeoning medical marijuana market in Oklahoma. Thanks to a manufacturing and licensing agreement, they should be entering the market in in early 2020.

Dixie Brands is well known for its range of marijuana-infused mints, topicals, elixirs and gummies. They initially had an agreement with another company but have changed their partner to a different operator local to Oklahoma. That company has requested anonymity for a short while before having their name published.

Dixie in Oklahoma

The agreement will mean Dixie Brands will work with this partner to use Dixie branded products, proprietary formulas and what they call  ‘GMP’ (Good Manufacturing Practices), quality control procedures and associated trademarks in the state of Oklahoma.

“We are excited to enter into this agreement with such a well-established partner to introduce Dixie products to Oklahoma ” said Chuck Smith, president and CEO, Dixie Brands. “The state has embraced legal cannabis over the past year, and we have high expectations for our comprehensive portfolio of award-winning products within such an established distribution network offering real speed to market.”

Dixie said they changed their partner because the new arrangement offered a much faster move to market and a wider distribution base. As the Oklahoma medical marijuana market is booming, getting to market fast is going to be a key component of the success or failure of the venture.

Oklahoma only legalized medical marijuana just over a year ago and already there have been thousands of licenses given to businesses and over 250,000 medical use licenses applied for. The Oklahoma Medical Marijuana Authority said they have already issued 1,700 dispensary licenses and the number is growing steadily.

With user, grower, processor and dispensary numbers growing, it’s a great time to enter the Oklahoma market. The Dixie Brands partnership will offer a range of innovative products and more consumer choice to that market. That’s a move that will benefit everyone involved.

Oklahoma getting ready for increased compliance rules

Despite being passed just over a year ago, a lot of work has gone into making Oklahoma a safe, reliable place to access medical marijuana. There is more work to be done though and medical cannabis businesses in the state are preparing for a raft of new regulations designed to make the industry safe and compliant.

Expanding regulation inevitably includes expanding the cost and overhead of those regulations. Something the new medical marijuana businesses have to shoulder themselves.

New regulations are expected around package labeling, product testing, waste management and seed-to-sale tracking. The intent is to keep the MMJ industry as clean as possible, enforce consistent packaging standards across the state, enforce safe product testing and effective, sustainable waste management.

The seed-to-sale audit system will ensure only legal sources of cannabis are used and that organized crime or other entities don’t get a foothold in the industry. All businesses dealing with medical marijuana have to have a full inventory tracking system in place that can track where the cannabis came from, the transport method, the type and a range of other identifiable metrics.

Growing business

Oklahoma is making a huge effort to control this business while keeping it viable. It has huge potential with forecasts estimating a revenue of between $140-$180 million in the first year alone. That’s without the jobs and tax revenue a new industry brings with it.

So far, Oklahoma has issued over 7,300 business licenses and well over 200,000 patient licenses for medical marijuana. That’s just in that same first year. The numbers for both are expected to grow exponentially which is why the authorities want to set up a coherent system to manage it.

The passage of the Oklahoma Medical Marijuana and Patient Protection Act last spring has change the landscape completely. As has the so-called “Unity Bill” and a number of “trailer bills” dealing with specific issues such as waste management. Local cities and authorities are trying to stifle the industry by setting much tougher rules but don’t seem to be having much luck.

So far, regulators seem to have the balance right. Necessary regulation to help maintain the industry with enough legislation to exert the control necessary to enforce safety and standards. Even the industry association agrees.

Bud Scott, executive director of the Oklahoma Cannabis Industry Association, said he wouldn’t call the regulations strict per se, but “straightforward and necessary.”

“The industry association supports this because there’s so much illegal activity occurring, and we want to support businesses that are doing it right,” he said.

Impending changes to tighten up the medical marijuana industry include:

  • An increase in approval times for business licenses, up from 14 days to 90 days to allow further scrutiny.
  • More stringent residency requirements where 75% of the businesses owners need to have been resident in Oklahoma for at least five years.
  • Clear packaging with ‘THC’ front and center with a statement saying the cannabis has been tested for contaminants. Packaging must also be clear, not purposely attractive and make no health benefit claims.
  • Testing enforcement for all growers and processors. All batches must be tested by an approved laboratory prior to sale. They must be tested for heavy metals, pesticides, THC and terpene potency.
  • Waste management only by licensed disposal companies with appropriate facilities.

That’s a lot of new compliance but even the most cynical should realize it will all benefit the customer. Aside from the seed-to-sale system, the customer benefits from all of the changes being put forward and that should also benefit the industry as a whole.

Oklahoma licenses 7,000 medical marijuana businesses in first year

Oklahoma is one of the later states to legalize medical marijuana but they haven’t been slow in coming forward. Just a year after legalizing the industry, sources have said the state has issued 7,300 licenses to operate medical cannabis-related businesses.

That’s a lot of activity within a single year of an industry being legal!

According to the Medical Marijuana Authority, those licenses break down as:

  • Growers: 4,287
  • Processors: 1,173
  • Dispensaries: 1,848

That’s a healthy start for such a new market and offers a decent balance between supply and demand. With twice as many growers as processors and dispensaries, the industry as it stands should be able to sustain itself over the longer term.

This is on top of the news that Oklahoma has licensed over 200,000 medical marijuana patients, has created a new business license category called transporter, specifically for the MMJ industry and has begun a tender process for laboratory testing licenses for the testing of medical marijuana for compliance.

Regulators are also considering a new industry standard for compliance that will span the entire industry. That will include labeling, product testing, waste management and seed-to-sale tracking. That last is already in force with demands businesses provide a complete audit trail of the entire business.

All new medical marijuana license applications must come from Oklahoma residents who can provide that 75% of the company’s ownership is resident in the state.

The state is doing a lot of work to create an ecosystem that delivers the regulation required to operate to modern standards while not stifling innovation and business creation. Despite only being a year old, the industry is maturing at pace and the authorities are mostly managing to keep up.

Aside from local authorities trying to shut down the industry or trying to implement more restrictive rules over medical marijuana, it seems the genie is well and truly out of the bottle and public opinion and the law is on medical marijuana’s side.

Oklahoma credit union no longer considering medical cannabis businesses

If you need a little cash to start your own business, where do you go? You could go to your bank and pay over the odds for a loan. You could borrow from family or friends and cross that line that should not be crossed. Or you go to a credit union. That’s fine unless you’re in Oklahoma and want to start a medical cannabis business.

Tulsa’s Encentus Federal Credit Union have stopped providing credit to the medical marijuana industry. They say the cost and regulatory burdens are too much for it to be worthwhile and that pulling out of the market was the right thing to do.

The company also said they would be informing current customers that their accounts would be closed within the month.

Regulatory burden

Board chair Jana Hallman said the burden of the FinCEN, Financial Crimes Enforcement Network, are proving too much and essentially requires staff to become auditors. It’s a lot of work and a lot of liability and the credit union doesn’t want any of that. Instead, it is pulling out of the medical marijuana market altogether.

“Upon significant review and research, we have come to realize that we do not have the staff nor the software sufficient to maintain the business activity,” Hallman wrote in an August 26 letter. “It takes a lot of time and software to really be able to keep up with it like we need to and at least right now we’re not in the position that we can pour those kinds of dollars into software (and staff).”

“It’s just we cannot financially continue to do it. We’re sorry, but we are held responsible for keeping our financial institution in good standing.”

The recent passing of the SAFE Banking Act, in the House should soon put an end to this hassle but it has to pass the Senate first. It passed in the house by 321 to 103 but the Senate is going to be a much tougher ask. Some senators have said they are in favor of passing the bill while others are less enthusiastic.

The bill aims to make access to credit easier for legal marijuana-based businesses. It seeks to address some of the challenges being faced by credit unions and help the burgeoning marijuana industry access the funds it needs to sustain itself, create jobs and deliver tax revenue.

According to Tulsa World, there are still options for accessing credit so not all avenues are being closed off. Just some of the more accessible ones.

Oklahoma has licensed 200,000 medical marijuana patients

Ever since Oklahoma legalized medical marijuana back in 2018, the market has exploded. People for whom cannabis can alleviate medial symptoms and growers and processes of the medical marijuana have exploded onto the scene. Growth has been huge and shows no signs of slowing down. In a little over a year, the state has licensed 200,000 medical marijuana patients to use the new treatment.

According to sources, the 200,000th patient was licensed on October 1 2019 by regulators in Oklahoma. To satisfy the demand, the state has also issued over 7,000 business licenses to stores, growers and processors. If you want to be one of that 7,000, you need to familiarize yourself with this page on the Oklahoma Medical Marijuana Authority website.

Supply and demand

When State Question 788 was originally passed back in June 2018, authorities estimated around 20,000 people would apply for a license to use it. That’s around 2% of the population of Oklahoma. It seems they drastically underestimated demand and just how many people regard medical cannabis as a viable treatment for conditions. And how many doctors also consider it a viable treatment!

Oklahoma is now one of the leading states for users of medical cannabis and has more users than most other states combined. With ten times as many people applying for medical cannabis licenses, we expect that figure to increase many more times before it levels out.

Regulators still have a huge number of license applications to process before that leveling out. They won’t say how many but conservative estimates put it at least twice as many as they have processed already.

The legality or medical marijuana in Oklahoma

Even though the medical marijuana market has exploded, many people still profess ignorance about what is legal and what is not. With state regulations saying one thing while local rules are trying to say another, it has been more difficult than usual to sort out what’s legal and what isn’t.

This page over at Tulsa World has a good breakdown of city ordinances regarding medical cannabis. It lists some of the main cities in the area and outlines what local laws have to say on the subject. It covers Cushing, Shawnee, Grove, McAlester, Tulsa, Broken Arrow,, Yukon, Sulphur, Weatherford, Collinsville, Moore, Sand Springs, Muskogee, Stillwater, Elk City, Okemah and most towns and cities within Oklahoma. If you need information on what’s going on with medical marijuana in your city, this is the page to check.

If you need information on the larger picture of medical marijuana in Oklahoma, this page has a useful overview. This page includes an overview of HB2612 and everything you need to know about what has been going on.

Medical cannabis businesses will still need the same licenses and permits any other business requires. They will need to prove compliance with fire, waste and building code and all the other hurdles any new business needs to jump in order to open their doors.

The legalizing of medical marijuana in Oklahoma is undoubtedly good news but there is still work to be done to clarify the picture and assess exactly what is legal and where. The resources on this page should help with some of that but so will time. Time for legislators and cities to get their act together and work in unity for the benefit of all those patients for whom medical cannabis has a genuinely positive effect.

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