OK cannabis bills call for surprise inspections but allow retailers to sell own pre-rolls

Feb 28, 2021

The lawmakers in the Oklahoma State Legislature who watch the cannabis industry closest returned to the regulatory drawing table this week with four cannabis bills that could impact the state’s still-fledgling markets.

The proposals come as cannabis businesses across the state are learning new details this week about the tight, two-month deadline for having all plants and products affixed with Metrc’s radio-frequency tags.

Four bills proposed by Republican representatives Jon Echols and Scott Fetgatter were considered Feb. 25 by the Oklahoma House Committee on Alcohol, Tobacco, and Controlled Substances. Echols and Fetgatter have become known around statehouse as studied on the subject of cannabis regulation and wield influence among other lawmakers as a result.

So they need a nickname, and the industry should run a poll or something. Maybe the “Regulators of Releaf” or the “Duo of Dank.” Of course, not everyone will think their proposals are dank for the cannabis industry and consumers. That means someone has to sit around all day staring at the government on your behalf. Most of the time, it’s either overpaid lobbyists or underpaid reporters and policy wonks.

I wrote here and here previously about the numerous cannabis bills Oklahoma lawmakers are considering during the current legislative session, which ends the last Friday in May unless there’s a special session.

I’m trying to develop a habit of getting cannabis-related hearings at the capitol uploaded to YouTube for easier viewing and sharing. I can’t get the trim function to execute in YouTube Studio at the moment for removing bills that are unrelated to cannabis. I’ll figure it out eventually.

Just because a bill makes it out of committee and moves on for a full House vote doesn’t mean it will become law. But committee activity shows what lawmakers consider a priority about a given issue area. And lawmakers who are influential in key policy areas telegraph important messages in their bills, amendments, and words during hearings what could become law and significantly affect the bottom line of the cannabis industry in Oklahoma.

Here’s a PDF of the committee meeting's agenda, because the government loves making things unnecessarily complicated with PDFs. The Oklahoma Medical Marijuana Authority also has a fondness for clunky PDFs, which is also slightly annoying. Details of the action taken Feb. 25 on the bills are below.

House Bill 2646 (at the 10:00 mark)

Sponsor: Rep. Jon Echols (R-Oklahoma City)

This is a sprawling bill with numerous regulatory changes that lawmakers wanted to make in the past but were but were held up by other matters.

There were several amendments passed at the hearing, and those are reflected here:

Removes the requirement that business licensees be notified in advance of inspections by OMMA. Ends the requirement that the state give licensees sufficient time to contact a lawyer if questioned during an inspection. Ends the ability of licensees to post cash or bond as an alternative to liability insurance.
Authorizes licensed dispensaries and cultivators to package and sell their own pre-rolled joints rather than obtain a special processing license to do so or rely on a supplier with a processor license. The bill explicitly does not permit the pre-rolls to be infused with kief or distillate, and the pre-rolls cannot contain more than one gram.
Establishes measurement standards for dispensary locations. They are prohibited already within 1,000 feet of any public or private school. The bill would set this measurement as between the two points of the property lines that are closest.
Removes a “good cause” provision that requires state regulators to have specific reasons for disciplining business licensees, denying license applicants, or refusing to renew licenses. Requires licensees subject to disciplinary action to wait five years before applying again.
Restores penalties for “grossly inaccurate or fraudulent” reporting made by cannabis businesses in required monthly disclosures filed with the state. The law would permit $5,000 in fines for a first-time error and $10,000 for any subsequent offense. (Note: These required reports will be replaced by the industry’s transition to Metrc.)
Asserts that individuals possessing up to 1.5 ounces without a license can only be punished with a $400 misdemeanor fine and cannot be imprisoned. Enables physicians to strip patients of their license eligibility and block any patient challenges.
Removes the requirement that all cannabis licensees maintain waste-disposal records of precise weights and counts for up to five years.
Removes the requirement that license applicants verify their sources of financing. You would still need to disclose your ownership interests and prove that 75 percent of the leaders of the business are Oklahoma residents.
Adds eight new members to the Medical Marijuana Advisory Council and requires that it include industry representatives impacted by regulatory changes.

The bill was passed out of committee and sent to the full House floor.

HB 2659 (at the 39:00 mark)

Sponsor: Rep. Jon Echols (R-Oklahoma City)

This bill also re-states that individuals possessing up to 1.5 ounces without a license can only be punished with a $400 misdemeanor fine and cannot be imprisoned. The bill would additionally:

Permit patients to legally possess marijuana of any amount harvested from six mature plants from a noncommercial home grower. It also allows for the possession of up to 72 ounces of a topical cannabis product.
Allows caregivers who obtain and deliver medical marijuana on behalf of patients unable to get it on their own to be not just individuals providing this service but also a company.
Authorizes the sale of tinctures and oils that can be used in vape pens and capsules for vaporization. Instructs OMMA to pen regulations for how cannabis businesses shall mix, label, and store such products. Would require dispensaries that compound such preparations to have food-handling licenses.
Gives dispensaries the right to prepare and package non-infused pre-rolls, as well as sell or transfer such products to other dispensaries. These sales can include the tinctures and oils permitted by the bill.

The bill was passed out of committee and sent to the full House floor.

HB 2660 (at the 22:00 mark)

Sponsor: Rep. Jon Echols (R-Oklahoma City)

This bill is trying to get right the amount of product cannabis businesses need to set aside for quality-and-safety testing purposes. Too small of an amount, and it’s not enough to test. Too large of an amount, and it becomes overly burdensome to cannabis businesses.

With an amendment passed at the Feb. 25 hearing, HB 2660 would take from 10 pounds to 25 pounds (instead of 50 as previously proposed) the amount of usable cannabis a cultivator is required to set aside for quality-testing.

The measure also decreases from 10 pounds to four liters (about 8.8 pounds) the amount of distillate a processor shall separate into production batches for testing. For final products -- which are defined in the measure to include but not be limited to cookies, brownies, candies, gummies and chocolates -- the testing batch size would be 50,000 milligrams of THC.

Previously this was determined by weight, which disadvantaged makers of cannabis edibles like brownies that happened to be heavier than other cannabis-based food products. OMMA also would not be allowed to require testing of final products more often than every 200 grams of THC produced, unless the maker’s batch size is less than 200 grams.

Said Rep. T.J. Marti (R-Broken Arrow) at the hearing:

“This bill was amended this morning. I don’t know if you guys got as many calls as I did. I was tasked with working with the medical community, and the industry, and patients on figuring out the best and safest way to control the testing environment in the state of Oklahoma. … On the final batch size, currently it’s 10 lbs, so 10 lbs of gummy bears versus chocolate brownies with caramel in them -- it’s an extreme difference in the amount of THC in those products. But we’re doing it by total weight[ under current law], which I think is not good for the industry and not good for the patient.”

This bill would also take the existing cannabis processor license issued by the state and split it into two categories:

Nonvolatile, meaning the solvents you’re using in the extraction process are not explosive
Volatile, meaning the solvents you’re using produce a flammable gas or vapor that will create explosive or ignitable mixtures (for example, propane or ethanol).

The bill was passed out of committee and sent to the full House floor.

House Bill 2004 (at the 32:00 mark)

Sponsor: Rep. Scott Fetgatter (R-Okmulgee)

This proposal has several provisions that align with Echols’s House Bill 2646 but with some notable differences. Fetgatter said it was an effort to make several intended policy changes that were denied last year by a veto from the governor over whether to allow cannabis delivery. “I have taken delivery out of this bill … I need to keep this bill moving.”

Allows medical cannabis patients 30 days to find a new prescribing doctor if another physician concludes that continued use is not necessary.
Deletes the requirement that 75 percent of surplus proceeds from the state’s 7 percent excise tax on cannabis be used solely for common education.
Prohibits using voter identification cards for the purposes of verifying a business license applicant’s residency in the state of Oklahoma.
Authorizes penalties where a cannabis licensee refuses to give state inspectors reasonable access to his or her premises.
Gives 24 hours notice to cannabis businesses in advance of state inspections.
Mandates that cannabis businesses write standard operating procedures “outlining the full operation of the business.”
Allows OMMA 90 days, rather than two weeks, to review dispensary, grower, and processor applications.
Changes the ownership residency requirements for dispensaries, so that up to 49 percent of your company’s owners could be non-Oklahoma residents instead of the current 25 percent.
Emphasizes that cities and political subdivisions must treat cannabis businesses the same as other businesses. However, they may restrict dispensaries opening after Sept. 1, 2021, from being within 1,000 feet of an existing dispensary.

One notable attempt in the bill was made to prohibit OMMA from requiring cannabis businesses to purchase specific radio-frequency tags for the state’s approaching track-and-trace implementation.

The current contractor who will be responsible for disseminating and charging for these tags is Metrc. The company would presumably lose money if dispensaries and processors had more choices for where they bought the tracking tags that are required to be affixed to cannabis plants and packaged products. So Fetgatter said the issue was being removed from the bill, but he said it could return.

“Currently, Rep. Echols and myself have been in negotiations on the RFID issue with Metrc,” Fetgatter said. “It’s my understanding that OMMA and Metrc are not really happy about the language in this bill, even though neither one of them has personally come to me and discussed that. … It strengthens our ability to continue having conversations with Metrc and OMMA on the issue of monopolizing RFID tags.”

The bill was passed out of committee and sent to the full House floor.

Listening to: Linda Ronstadt "Rogaciano El Huapanguero" 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.