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GCM Newsletter | March 22, 2021
Late-breaking as I was assembling issue three of the newsletter: The latest episode released today of the Nondoc podcast covering Oklahoma policy and news is all about cannabis. Don’t miss it.
Not every cannabis business in America can afford a full-time compliance officer for keeping the company out of trouble with government regulators. It’s safe to say that’s the case for the majority of Oklahoma’s thousands of licensed cannabis businesses.
So complying with the head-spinning number of government rules on legal cannabis in Oklahoma falls to you. The latest such rule is integrating Metrc’s mandated cannabis-monitoring technology into your business by a deadline of April 30. As of this writing, that means you have 40 days to meet the deadline or lose the privilege of being a cannabis business in Oklahoma.
As you toil to meet that deadline, cannabis operators in California say Florida-based Metrc’s proprietary monitoring technology is suffering intermittent outages and disruptions that are costing businesses valuable time and money as they scramble to stay compliant with state regulations.
Lawmakers are entering their eighth week of the 2021 Oklahoma Legislative Session. It’s becoming clearer which cannabis proposals could become law and have direct and indirect costs on business and patient licensees.
It’s also becoming clearer which proposals seem to conflict directly or indirectly with the spirit of the state’s landmark 2018 ballot measure legalizing medical marijuana in the first place. If you don’t happen to notice what’s headed to the governor’s desk, my guess is elected officials won’t lose much sleep over it. Here’s just a sampling of what’s still at play:
House Bill 2272 Places caps on the total number of licenses Oklahoma can issue for cultivators, processors, and dispensaries.
Senate Bill 445 Appears to allow serious criminal charges for possessing, using, or sharing cannabis where all parties do not have state-issued licenses.
House Bill 2004 Far-reaching measure with numerous proposed changes including:
Makes it easier and cheaper for cannabis businesses to designate employees as official transporters.
Deletes the requirement that 75 percent of surplus from the state’s 7-percent excise tax on cannabis be used solely for common education.
Increases the penalty for selling cannabis to unauthorized people from $1,000 to $5,000 on first offense and $5,000 to $10,000 on the second.
House Bill 2646 Another far-reaching measure with numerous proposed changes including:
Allows dispensaries and growers to package and sell pre-rolled joints. Prohibits pre-rolls infused with kief or distillate and those over one gram.
Creates a temporary three-day patient permit for non-residents of Oklahoma with no limit on renewals. The permit would cost $75.
Raises from 10 pounds to 25 pounds the amount of usable cannabis a grower must set aside for quality testing.
These are just a few of the proposed cannabis rule changes pending or dead at the statehouse. Read on at the link below for a more complete list.
Fierce competition, speculation, and saturation in Oklahoma’s cannabis market are likely behind a first-time drop in the number of retail licenses handed out across the state during 2020. Over 800 licenses statewide have gone inactive in the last three years for a multitude of reasons. One in five of those licenses went inactive last year.
Oklahoma nonetheless still has the highest number of retail cannabis business licenses in the nation, and no other state issued more in 2020. The dip in new licenses issued comes as a controversial bill is pending at the capitol that would limit the total number of cannabis business licenses in the state.
A thorny federal tax provision familiar to state-legal cannabis businesses but unknown to most Americans could get a review from the highest court in the country. Justices for the Supreme Court will decide soon whether to hear a challenge from the Denver-based cannabis dispensary Standing Akimbo to the obscure federal tax rules known as Section 280E.
The IRS first launched an investigation of Standing Akimbo in 2017 to determine if the business had wrongly lowered its tax burden by claiming certain deductions that weren’t allowed under 280E. Without a warrant, tax enforcers then pursued business records from the state of Colorado that described Standing Akimbo’s sales, harvests, and plant inventories.
In a 1982 newspaper story, The Oklahoman called it “just like any other church social.” People sang hymns. There were cookies and lemonade. But the group of volunteers recruited from local churches in tiny Newcastle, Oklahoma, just west of Norman, hadn’t assembled that spring day in 1982 for fellowship.
Oklahoma drug enforcers had asked for their help eradicating illegal cannabis growing in a 10-acre field after local authorities complained they didn’t have the resources to destroy it all themselves. The grow had been discovered in the area as lots were being sold for a housing development.
Virginia is not only legalizing weed, it’s purging past drug records. Will Oklahoma ever do the same thing?
The Commonwealth of Virginia is now planning to do more than just become the first state in the South to authorize recreational cannabis beginning in 2024. Lawmakers there are being praised by criminal-justice reformers for proposing a further step.
An “ambitious” and “transformative” measure would also automatically expunge criminal records stemming from past cannabis offenses for simple possession and possession with the intent to distribute.
By contrast, Oklahoma chose not to automatically expunge past cannabis felonies for simple drug possession and possession with intent when it first reclassified certain drug felonies down to far less-serious misdemeanors in 2016 and then authorized medical marijuana in 2018.
GCM Roundup | Oklahoma and Beyond
Oklahoma has housing developments with oil derricks in the middle of them. But don’t make us live next door to legal cannabis businesses.
Meanwhile, one of those legal cannabis businesses is pridefully serving the industrial west side of Tulsa, “where it’s mostly working folks and people getting out and grinding everyday.”
The Dallas Observer finally noticed that if Oklahoma authorizes temporary patient licenses, which it could do very soon, Longhorns will be pouring over the state line to buy weed from Sooners. The market-analysis firm New Frontier Data also noticed last year that Oklahoma could become a regional cannatourism locale. (My family is a house divided, as they say. My sister went to OU. I went to KU and UT Austin.)
Even though medical marijuana is flourishing in next-door Arkansas, arrests there for possession are continuing by the thousands. And not surprisingly, people of color are disproportionately affected.
Nebraska Gov. Pete Ricketts: “If you legalize marijuana, you’re gonna kill your kids.” Back in my day, it was skateboarding and punk rock AND weed that would kill your kids.
Two business scholars in a new paper outline several examples of how cannabis businesses can turn legal uncertainty into a competitive advantage.
Earn good will in the community where your cannabis business is located by sponsoring a cool mural on the exterior that people enjoy. (I know this is asking a lot of cannabis, but try not to be too garish about it.)
Speculation in Canada is forcing Aurora Cannabis to sell “one of the largest and most expensive greenhouses ever built to grow marijuana.”
Ocean City, New Jersey, has famously (or infamously) prohibited alcohol sales since the 1800s. Now it’s trying to do the same to cannabis.
Mexico will be the biggest market for recreational cannabis anywhere.
The Food Network series “Chopped” is creating a cannabis-friendly spinoff to attract Gen Z audiences. It’s called “Chopped 420.”
Listening to: Jon Batiste “WE ARE” Reply with an email or sign up to receive alerts. Follow Green Country Monitor on Twitter, Facebook, LinkedIn, and Instagram. If you appreciate this work, consider leaving a tip.