Oklahoma’s Cannabis Market: A 2025 Update for Cannabis Entrepreneurs

Oklahoma’s medical marijuana market has rapidly evolved since its inception, presenting both opportunities and complexities for entrepreneurs seeking to establish a foothold. This analysis aims to provide insights into the current landscape for those considering acquiring a cannabis license in the state, drawing upon the latest information from the Oklahoma Medical Marijuana Authority (OMMA).

Stakeholder Eligibility: Who Can Participate?

To be eligible for a commercial cannabis license in Oklahoma, several key criteria must be met:

  • Residency: Applicants applying as individuals must be Oklahoma residents. For entity applicants, all members, managers, and board members must be Oklahoma residents, and at least 75% of the ownership interest must be held by Oklahoma residents. Specific documentation is required to establish proof of residency. This residency requirement may not apply to public institutions or Oklahoma non-profit entities seeking research or education facility licenses.
  • Age: All applicants must be at least 25 years old.
  • Background Checks: All owners and principal officers of an entity must undergo a state criminal history background check within thirty (30) days prior to the license application. Disqualifying felony convictions can render an applicant ineligible. A new attestation form along with the state background check temporarily meets the national background check requirement. For public institutions applying for a research facility license, all principal investigators and co-principal investigators must also undergo a background check.
  • Other Restrictions: Individuals holding certain public positions, such as sheriff, deputy sheriff, police officer, prosecuting officer, or employees of OMMA or a municipality where the commercial entity is located, may be ineligible for certain licenses.
  • Certificate of Compliance: Applicants generally need to supply a Certificate of Compliance for their business location, certifying compliance with building and fire codes.
  • Distance from Schools: Dispensary and grower locations must not be within 1,000 feet of the property line of any public or private school. The measurement method varies slightly between dispensaries (nearest perimeter wall) and growers (nearest property line).

Types of Commercial Cannabis Licenses and Their Privileges:

Oklahoma offers a variety of commercial licenses, each granting specific privileges:

  • Grower License: Allows the legal cultivation of marijuana for medical purposes. Licensed growers can only sell to licensed processors, dispensaries, and other growers. Separate licenses may be required for indoor and outdoor growing at the same location. Outdoor growers must register with the Oklahoma Department of Agriculture, Food and Forestry (ODAFF) as a sensitive crop. There are tiered licensing fees for growers based on acreage (outdoor) or canopy size (indoor, greenhouse, light deprivation) for applications submitted on or after June 1, 2023.
  • Processor License (Hazardous/Non-Hazardous): Permits the legal processing of marijuana for medical purposes. Processors can purchase from growers and other processors, and sell to licensed dispensaries and other licensed processors. They can also process marijuana into concentrate for patients for a fee. The type of license (hazardous or non-hazardous) depends on the extraction methods used. Tiered licensing fees apply to processors based on their gross annual revenue from the previous calendar year for applications submitted on or after June 1, 2023.
  • Dispensary License: Authorizes a business to legally sell medical marijuana and medical marijuana products (including mature plants and seedlings) to licensed patients, caregivers, research license holders, education license holders, and the parent or legal guardian of a minor patient. Dispensaries can purchase from licensed growers, processors, and other dispensaries. They also need a food license from the Oklahoma State Department of Health (OSDH) if producing or selling edible medical marijuana products and a tax permit from the Oklahoma Tax Commission. The initial dispensary license fee is $2,500, and the annual renewal fee is calculated at 10% of the dispensary’s combined annual state sales tax and state excise tax, with a minimum of $2,500 and a maximum of $10,000.
  • Transporter License: A standalone license allowing the licensee to transport, store, and distribute (but not take ownership of) medical marijuana and medical marijuana products between other licensed businesses using licensed transporter agents. Transporters can contract with multiple licensees and maintain multiple Authority-approved warehouses.
  • Transporter Agent License: Required for individuals to transport medical marijuana and medical marijuana products on behalf of licensed commercial transporters, growers, processors, dispensaries, laboratories, research facilities, or education facilities.
  • Testing Laboratory License: Permits public or private laboratories to conduct testing and research on samples of medical marijuana and medical marijuana products. Laboratories must be accredited to ISO 17025 standards. There are restrictions regarding ownership interests to prevent conflicts of interest.
  • Research Facility License: Authorizes the licensee to grow, cultivate, possess, and transfer (by sale or donation) marijuana to other licensed research facilities and licensed testing laboratories for approved research purposes. Research must align with defined protocols and goals. Applicants using public funds or working with public institutions have additional requirements. The application fee is $500.
  • Education Facility License: Allows the licensee to grow, cultivate, possess, and transfer medical marijuana for educational purposes and to provide training on various aspects of medical marijuana. Education facilities may need to provide curriculum descriptions and, if non-profit, non-profit registration with the Oklahoma Secretary of State. The application fee is $500.
  • Waste Disposal Facility License: Permits the disposal of medical marijuana waste in accordance with the Oklahoma Medical Marijuana Waste Management Act and regulations from the Oklahoma Department of Environmental Quality (DEQ). Licensees automatically receive a waste disposal transportation license. Applicants need a permit from the DEQ and must show proof of sufficient liability insurance. There was an initial limit on the number of these licenses issued.

Application and Licensing Fees:

Application fees are generally non-refundable.

  • Grower: Fees are tiered based on cultivation area and type (indoor/outdoor) for applications on or after June 1, 2023.
  • Processor: Fees are tiered based on gross annual revenue for applications on or after June 1, 2023.
  • Dispensary: Initial fee is $2,500. Annual renewal fee is 10% of combined state sales and excise tax (minimum $2,500, maximum $10,000).
  • Research & Education Facility: $500 application fee.
  • Fees for other license types are established in statute. Note that application fees may change after November 1, 2024, to the annual license fee established in statute.

Applicants are also responsible for all costs associated with background checks. Credit card processing fees may also apply.

Current Status of Commercial Cannabis License Applications: Moratorium in Effect

Currently, there is a moratorium on processing and issuing new medical marijuana business licenses for dispensaries, processors, and growers. This moratorium began on August 26, 2022, and is scheduled to end on August 1, 2026, unless OMMA’s Executive Director determines all pending licensing reviews, inspections, or investigations are complete before that date.

This moratorium does not affect current licensees who can apply for renewal.

Entering the Market: Purchasing an Existing License

Given the current moratorium on new dispensary, grower, and processor licenses, one potential avenue for entrepreneurs to enter Oklahoma’s cannabis market is by purchasing an existing, valid license through a license transfer.

  • License Transfers: Beginning November 1, 2024, licensees wishing to transfer a license, submit an ownership change request, or submit a name change request are required to submit a license transfer application by the new owner.
  • Transfer Application Fee: The fee for license transfer applications will be the annual license or application fee established by law for the specific medical marijuana business license type.
  • Requirements for Transfer: License transfer applications are subject to all the requirements under OAC 442:10-5-3, which include information about the new owners, residency documentation, background checks, and potentially a Certificate of Compliance.
  • OBNDD Registration: Upon approval of the transfer application, the new owner must register with the Oklahoma State Bureau of Narcotics and Dangerous Drugs Control (OBNDD) before the transfer is finalized.
  • Inventory Transfer: Once OBNDD registration is issued, the prior and new owners have 15 business days to transfer all inventory. After this period, the prior owner is no longer a licensee.
  • Unlawful Transfers: Any attempt to transfer a medical marijuana business or its assets without OMMA approval can lead to license revocation or nonrenewal.

Conclusion

For entrepreneurs looking to enter Oklahoma’s cannabis market, understanding the eligibility requirements, license types, associated privileges, and the current moratorium is crucial. While new applications for certain commercial licenses are currently paused, the possibility of acquiring an existing license through a compliant transfer process remains a viable option. Thorough due diligence, adherence to all OMMA regulations, and careful planning are essential for navigating this dynamic industry. Remember to always refer to the official OMMA website (Oklahoma.gov/OMMA) for the most current and up-to-date information as regulations are subject to change.

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