Oklahoma to Open Application Process for Medical Marijuana Program After Convoluted Regulatory Process

After spending the better part of the summer drafting regulations for its forthcoming medical cannabis industry, Oklahoma will open its application process for businesses and patients this weekend.

Oklahoma voters approved a medical marijuana law June 26, and the state’s Department of Health, industry organizations and legislators spent the past two months going back and forth on emergency and permanent rules to implement the law and regulate the industry. 

Licensing and patient applications will be available online beginning at 10 a.m. on Aug. 25, and licenses will be issued two weeks later. Once licenses are issued, cultivators can start growing plants immediately.

Patients must have a recommendation for medical marijuana from a certified physician, and they then present that recommendation to the state to apply for a card, which is valid for two years. There are no qualifying conditions, however—patients can qualify for the program with any medical reason that a doctor agrees medical marijuana can treat.

The long and somewhat complicated story of how Oklahoma got here started four years ago.

Oklahomans for Health launched in 2014 and was the first organization to petition the state for medical marijuana that same year, co-founder and chairman Chip Paul told Cannabis Business Times. Although the organization was not successful, Paul said the petition changed the conversation in Oklahoma and led to “Katie’s Law”—the state’s first CBD law—in 2015.

Additional petitioning efforts ensued until a medical marijuana legalization effort made the ballot and was passed by voters this summer on June 26, in the form of State Question 788, of which Paul was the principal author. The state government then had 30 days to design medical marijuana regulations and set up a marketplace for legal sales.

“Chip definitely deserves a lot of credit for that because the language that he put in 788 really established the timeframe that no state has ever had to stick to [in order] to implement this industry,” said Chance Gilbert, co-founder and president of the Oklahoma Cannabis Trade Association (OCTA). “It’s definitely a unique aspect of it.”

Paul co-founded the OCTA and remains involved as a regulatory entity, Gilbert said. The organization works with businesses planning to enter the market and connects prospective businesses with national experts and vendors like lighting and greenhouse companies to help get operators up and running.

Gov. Mary Fallin originally planned to call a special session to tighten the regulatory structure of the medical marijuana law passed by voters. “That special session would have changed aspects to the law, and we felt like that was what the get was, was to change the law,” Paul said. “So, we introduced our own regulations.”

Oklahomans for Health submitted its proposed regulations five days after the law initially passed, Paul said. “We felt like this stopped a special session and cut the governor off,” he said. “Since then, we’ve been working both with lawmakers and with the Oklahoma State Department of Health.”

Gov. Fallin walked back her threats of a special session in early July and announced that she would respect the voter-approved law.

Meanwhile, New Health Solutions Oklahoma, another trade group in the state, unveiled a sample bill it called the Oklahoma Medical Marijuana and Protection Act to implement the law and regulate the state’s nascent industry.

The Oklahoma Department of Health then released its first set of emergency regulations, which were different from what Oklahomans for Health and New Health had proposed, Paul said. A THC limit was proposed, and at a board meeting in mid-July, the Department of Health added two more controversial rules to the regulations—a ban on smokable cannabis and a requirement that a pharmacist be on staff at the state’s dispensaries.

“Then, they got a letter from the attorney general of Oklahoma, saying that they had grossly and egregiously overstepped their boundaries under the law and that they needed to go back and get it right,” Paul said. “So, we started working with them again. We produced a 58-page regulatory document.”

The Department of Health then released its revised proposed emergency rules, which did not include testing requirements, Paul said. “That’s not really responsible, and we don’t want the state to be burdened with lawsuits,” he said. “What responsible health department would come out with regulations without testing in them for a product that you consume?”

The Department of Health ultimately approved this new set of rules, but then the state legislature was charged with implementing the permanent regulations in the program.

“The Board of Health, the rules that they adopted initially back in July were very bad for the program,” said Frank Grove, chairman of Oklahomans for Cannabis. The organization grew from Oklahomans for Health after Grove, a co-founder of Oklahomans for Health, broke off to organize on his own.

(The Oklahoma Department of Health was also plagued by scandal when Julie Ezell, the department’s top attorney, confessed to sending threatening emails to herself regarding the implementation of the program while posing as a medical marijuana advocate. Ezell resigned last month and faces criminal charges, NewsOK reported.)

Legislators asked four of the state’s industry organizations— Oklahomans for Health, Oklahomans for Cannabis, New Health Solutions Oklahoma and Green the Vote—to help draft a single proposal that could be used as a baseline for the permanent rules.

“In the law, basically it sets up the ecosystem,” Paul said. “Here’s how you become a grower. Here’s what you need to provide. Here’s who you can sell to. Here’s who you can buy from. Same thing with process, same thing with dispense.”

The regulations created by the legislature would then outline more detailed aspects of the program, such as ensuring consumer safety. 

“We came together, and we proposed a set of joint regulations, and we did that late last week,” Paul said. “We expect that to be picked up by lawmakers, and we expect to go into a special session. We expect to have those regulations approved, and that will be what we operate under.”

However, Oklahomans for Cannabis broke with the other groups and released its own draft bill of regulations, citing concerns that Grove said were not being addressed by the other set of proposed regulations.

“A lot of our concerns were ignored, and concerns that we have from the community in general,” Grove said.

“One of the biggest issues is it effectively forces municipalities to create a local licensing board, and we’ve already talked unofficially to multiple people and city planning departments, and they do not want that,” Grove said. “There are some municipalities in smaller towns that are trying to use that to lock down the system, but the bigger cities, they don’t want the additional bureaucratic overhead and cost burden on themselves. They just want the state to take care of it. They’ve also told us that would basically create a 10-to-12-month delay in the program getting rolled out.”

Oklahomans for Cannabis also wants the state to have the authority to conduct product recalls, Grove added, and the organization is also concerned about language in the proposed regulations that seems to classify CBD as marijuana. “A lot of people and patients are worried about losing access to the CBD oil that they already have,” he said.

License limits are also a concern for Oklahomans for Cannabis, which does not want limits implemented until the program matures, if at all, Grove said. “It may be needed years down the road when the market is more mature if federal barriers have not fallen, but trying to put license limits in the system at the beginning, we believe is just a way to create shortages [and] price hikes [and] push people out of the market who should’ve been competitive leaders,” he said. “We prefer a more market-driven solution, at least considering that we’re just starting here. You need to give everybody a fair shot.”

Now that SQ 788 has passed, Oklahomans for Cannabis is transitioning into a nonprofit organization to lobby for patients in the state and support those on a fixed income, Grove said. The organization wants to establish a program to cover the cost of veterans’ medical marijuana cards and doctors’ visits.

“This is a medical marijuana program,” Grove said. “I think the key needs to be that we’re driving down costs, making this affordable for people.”

Looking ahead, Gilbert foresees possible zoning issues on the horizon for the future licensees, he said. Although state law mandates that local municipalities cannot unduly change or restrict zoning laws to deny a cannabis business license, there are still cities trying to enact their own legislation for zoning.

“For instance, putting in [a requirement to be] 1,000 foot from churches, daycares, playgrounds, another dispensary—those things they can’t legally do, but it’s still happening,” Gilbert said. “It’s more the ‘no’ side that still thinks that there’s a stronghold in these communities and they’re trying to force their own will. So, that’s still an issue that we’re facing.”

Gilbert wants a lobbying entity—like Paul—to ensure that what the state’s advocacy groups have worked so hard for remains intact and does not get overhauled by lawmakers or other interests, he added. He also envisions the OCTA bringing in experts who can help the state’s licensed businesses through wholesale discounts and networking opportunities, he said. 

As for Paul and his group, the tone in Oklahoma is one of cautious optimism.

“I’ll tell you two things that are really helping us,” Paul said. “We put deadlines into our law, so we had a 30- and a 60-day ticker in our law. And then the fact that we’ve done this in a ‘We the People’ way, so there’s no special interest really driving anything. No one has a big agenda here. Everybody’s trying to get it done right, which is good.”

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