Oklahoma Medical Marijuana Industry Calls Out Regulators Over Licensing Backlog

“Multiple other states have looser residency restrictions, they’re a little cheaper and they’re a lot more supportive than Oklahoma has been.”

By Emma Murphy, Oklahoma Voice

Kyle King said he’s invested $100,000 into Oklahoma’s medical marijuana industry, hoping to become a licensed grower. After over a year of waiting on the state’s regulatory agency to approve his ownership, he’s now considering taking his business to another state.

With a legislatively imposed moratorium on issuing new licenses, King has to buy an existing license from a business owner looking to sell. He invested in a growing business called GreenSight 2020 in May 2023, but said his ownership and the transfer of the license still has not been made official by the Oklahoma Medical Marijuana Authority, or OMMA. In the meantime, King cannot earn any money from the business he’s invested in.

King said he’s been checking in with OMMA on a weekly basis, but has been told he’ll need to continue to wait. While King said he’s been able to work other jobs to support himself, others have poured their entire retirement savings into this industry.

“I’m tired of waiting for Oklahoma,” he said. “Multiple other states have looser residency restrictions, they’re a little cheaper and they’re a lot more supportive than Oklahoma has been.”

King, along with others within the medical marijuana industry, blame a massive license renewal backlog at OMMA.

While state law requires OMMA to approve renewals within 90 business days, cannabis advocates say hundreds of licenses are in limbo, creating a harmful situation for proprietors and prompting concerns that allowing unlicensed operations could put consumers’ public safety at risk.

Tasked with licensing and regulating growers, processors and dispensaries, OMMA pushed back against assertions that it is failing to renew licenses on time and is out of compliance with state law. But the agency was unable to provide Oklahoma Voice with any documentation showing how many licenses are out of date and waiting for renewal.

Licensing process at a ‘standstill’

State law allows businesses to continue to operate while waiting for their licenses to be renewed, but Jed Green, director of Oklahomans for Responsible Cannabis Action, said allowing the dispensaries, growers and processors to essentially operate without up-to-date licenses while under review has become a “crutch” for OMMA.

Growers have faced the most licensing delays because the state is hoping to reduce the number of marijuana grows, he said. Green said that licensing process has come to a “complete standstill.”

He said that if OMMA cannot keep up with licensing, it won’t be able to handle its other responsibilities.

“The first thing for any state agency is to handle licensure. If you can’t handle licensing businesses, you don’t have any business moving on to step two, enforcement, or anything else,” Green said.

In a statement, Porsha Riley, a spokesperson for the OMMA, said the agency has successfully processed 90 percent of commercial licenses within the required timeframe.

“Although the review period for each submission is typically 90 business days or less, the law permits us additional time when further review is necessary upon sending a status letter to the applicant,” Riley said in a statement.

Oklahoma Voice submitted an open records request to OMMA requesting the number of businesses with pending license renewals as well as the date the renewal application was submitted. In response, the agency said it “doesn’t maintain a record responsive” and “by law cannot create them to respond to open records requests.”

Riley said in the statement that OMMA is implementing “robotic assistance” into its application processing and working to be more efficient while also implementing new statutory requirements following the legislative session. She said the agency does not control changes to the law but must implement those crafted by the legislative branch.

“Factors outside the need for additional review that have caused delays include implementing new state laws, reviewing multiple applications from a single applicant following applicant errors and the implementation of new statutory requirements leading to a need for mass rejections,” Riley said.

Backlog has a ‘chilling’ effect on industry

Mike Ervin helped to run the campaign for the state question that legalized medical marijuana. He said OMMA initially had 30 days to renew licenses, which he said was probably too ambitious. Now, OMMA’s approval window equates to roughly four to five months.

“We’re seeing license renewals taking a year, so that by the time your license renewal gets approved you’re applying for the next license renewal,” Ervin said.

He said these delays create a “chilling” effect on the growth of the state’s medical marijuana industry.

“When you have uncertainty, businesses don’t know how bad it could be. They don’t know how to react. They don’t know how to move forward,” Ervin said. “If I have to wait a year, I’m going to invest this money, I’m going to have to pay a year of lease payments, a year of electric and water. At some point it’s ‘why would I do that?’”

Felina Rivera, who manages and owns Renaissance Legal Solutions based in Oklahoma City, said lawmakers sent eight bills to the governor that made substantive changes to the medical marijuana industry. That’s in addition to legislation passed in 2023 that the agency is still trying to implement.

Rivera, who has worked within the cannabis industry for four years, said she’s represented many clients experiencing licensing issues with OMMA.

She said that about 30 percent to 40 percent of her clients are lucky enough to have license renewals approved within the mandated approval period. Rivera said a major issue is a lack of consistency in responses from OMMA.

Rivera said that sometimes a license renewal will be sitting with OMMA under review for the full 90 business days only to be sent back right before the deadline, flagged for small errors. Rivera said she sends OMMA a letter explaining whatever was labeled as errors and resubmits the application. But then the clock for OMMA resets and the agency has the full window of time to review the license renewal application again.

“I think there has a been a disregard for the fact that, as a state that values small businesses and independent business owners, the constant changes in the legislation and the corresponding rules…are having the effect of severely overburdening the people who are small mom and pop shops that are trying to follow the law and do things correctly,” she said.

Consumer and safety concerns

Robert Mikos, professor of law at Vanderbilt University, said that if OMMA were to reject a license renewal and the business has been serving consumers during the review period, there could be a concern for consumers.

“Licensing really serves as the framework for all state regulation of the cannabis industry…it kind of facilitates the enforcement of all these other regulations,” Mikos said.

He said the causes of a backlog can vary. Sometimes there isn’t true support for the industry from executive officials and sometimes the state agency is just understaffed and overwhelmed. In July, OMMA cut 10 percent of its staff, citing a need for restructuring.

“If this drags on, that suggests that the state is behind the curve on lots of enforcement issues, then you should be concerned about consumers,” Mikos said.

As part of a license application, a medical marijuana business undergoes public safety and health checks.

Amie Goodin, assistant professor at the University of Florida’s Department of Pharmaceutical Outcomes and Policy, said the danger to consumers would grow if these safety checks and inspections are not continuing during the waiting period for a license renewal.

“While an organization is undergoing the renewal process, the intention is that they will continue to perform those required activities…I do not have an understanding of how Oklahoma would be able to verify that during the process so I can’t speak to whether or not it’s being evaluated during the renewal process,” Goodin said.

Legislative approach

Rep. Scott Fetgatter (R-Okmulgee) carried one of the pieces of legislation affecting OMMA this past session. He said the law creates an advisory council which will include people from the medical marijuana industry to help OMMA work through issues with an industry perspective.

Fetgatter said he works with OMMA and industry members as much as he can when working on legislation related to medical marijuana.

“I pulled away from working on too much marijuana legislation… It was such a toxic issue and nobody really was listening to what the industry needed to be successful,” Fetgatter said. “We all work really hard with OMMA as well as the industry, to try to bridge the gap between the two.”

Fetgatter said he’s been approached by many people complaining about a licensing backlog at OMMA.

“I really hope OMMA gets it figured out,” Fetgatter said. “Because you’re causing businesses to be in a very difficult spot because their licenses are not getting renewed timely, and they’re questioning, ‘Am I allowed to do business?’ It creates a lot of confusion. And the one thing that we know about industries and businesses, people need continuity. They need stability.”

This story was first published by Oklahoma Voice.

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Photo courtesy of Philip Steffan.