New cannabis business licenses in OK are dropping. Lawmakers still want to cap them.
Fierce competition, speculation, and saturation in Oklahoma’s cannabis market are likely behind a first-time drop in the number of cannabis retail licenses handed out across the state during 2020. That’s according to a new analysis of regulatory data from the marketing firm Cannabiz Media and reported by Marijuana Business Daily.
Bud Scott, executive director of the Oklahoma Cannabis Industry Association, had this to say to the Daily about the declining numbers:
“There are more licensed dispensaries in Oklahoma than Walmart, McDonald’s, and Starbucks combined. To say there is retail saturation is an understatement.”
Oklahoma ended 2020 with 181 fewer cannabis retail licensees than 2019, despite the fact that state regulators issued 565 new licenses last year.
Oklahoma City is the easy leader in the state with nearly 400 retail licenses to the under 200 in Tulsa. The Daily reports that Oklahoma City also has a higher number than Tulsa of inactive licenses.
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 licenses in the nation, and no other state issued more last year.
According to the Daily:
“Scott of the Oklahoma Cannabis Industry Association blames some of the decline on initial license buyers speculating the market would limit permits or make the process more difficult. That never happened, so many opted not to renew. Although Scott said he doesn’t have a complete picture of dispensary ownership, he believes franchise operators and new out-of-state brand partners will become more dominant as the market matures, making it harder for independent, single-location owners to compete.”
The approaching deadline for becoming compliant with the state’s seed-to-sale tracking program and the costs of implementing it could also become enough to scare off new licensees or drag down those not already flourishing.
The news comes as a controversial bill is pending in the Oklahoma State Legislature that would cap the total number of cannabis business licenses available in the state for cultivators, processors, and dispensaries. The limit contained in House Bill 2272 would become where the numbers of these license categories stand on Sept. 1, 2021.
The proposal calls for then slowly reducing the number of total cannabis business licenses available in the state by not reactivating those that have been terminated, cancelled, or surrendered. Using this method, the bill anticipates 2,000 licenses ultimately being available for dispensaries, 5,000 for cultivators, and 1,000 for processors.
The House sponsor of the bill, Republican Josh West of Grove, has said constituents in his district and others are complaining about black-market cannabis importing and exporting with nearby states.
Republican representatives Scott Fetgatter (Okmulgee) and Jon Echols (Oklahoma City), however, have said they worried the law might violate the Oklahoma Constitution and be too big of a constraint on the cannabis industry. Fetgatter filed an amendment on March 10 that would sunset the bill in 2023, so that the state could pause and evaluate its effect.
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