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!

The success of medical marijuana causing real estate shortages in Oklahoma

It has been just two years since Oklahoma legalized the growth and use of medical marijuana. In that time, the state and our society has changed a lot. One unforeseen consequence of this boom is the commercial real estate market.

More specifically, shortages of plots or buildings to set up an MMJ business.

Oklahoma has approved hundreds of thousands of patient licenses, thousands of growing and cultivation licenses and almost 2,000 processing licenses. That all mounts up to a lot of people looking to set up businesses across the state.

As the needs of the medical marijuana industry is quite specific, there is something of a shortage of real estate.

The real estate requirements of MMJ in Oklahoma

The typical marijuana grower and cultivator needs a lot of floor space. They ideally need high ceilings, a direct connection to the electrical grid, the ability to heavily insulate and have effective air handling.

We are typically seeing requests for spaces anywhere from 1,000 square feet to over 40,000 square feet. Not all of them will meet the requirements above.

Fewer still have landlords willing to lease to the medical marijuana industry. It’s still too new and too controversial for many established commercial landlords to want anything to do with.

Attitudes are changing, but slowly.

In the meantime, there is something of a shortage of potential sites. On average in Oklahoma, around 4.5% of commercial property lies vacant. Of that, only a fraction of landlords are willing to lease to our industry.

Finding your own space

Newcomers to the industry in Oklahoma are having to take a different path. Rather than finding the perfect property, they are looking at applicable properties with potential and adding their own HVAC, strengthening grid connections and building out the spaces themselves.

This opens up more of the real estate market but comes at a cost. Most commercial landlords will make the tenant pay for customization and will only help with mandated repairs or essential building works.

The rest is up to you.

With a super-competitive real estate market, you may have no other choice.

Triple Net Leases

If that wasn’t enough, some landlords are also insisting on Triple Net Leases. This is where you pay your monthly rent, utilities, taxes and insurance on the property. Many of these leases also demand a significant deposit and a month or two in rent up front.

That’s another significant cost of setting up an MMJ business in Oklahoma.

But, with demand still growing for medical marijuana, people are still flocking to the state. If that remains the case, competition for viable real estate is only going to get hotter!

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!

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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