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Your step-by-step guide for getting a cannabis business license in Oklahoma
The cannabis industry in Oklahoma is booming thanks in part to low barriers of entry for would-be entrepreneurs. Voters passed among the most progressive medical marijuana laws in the nation. Where Oklahoma charges just $2,500 to apply for a business license, numerous other states squeeze entrepreneurs for much more.
Vermont and Hawaii have annual fees of $25,000 and $75,000 respectively. Applications are $25,000 in New Jersey, $60,000 in Florida, and $20,000 in Minnesota. The cannabis industry think tank New Frontier Data added this rosy outlook for Oklahoma in a recent report:
“Any further loosening of restrictions for out-of-state residents could have massive implications for the market. In its geographically central location among the lower 48 states, Oklahoma might represent a canna-tourism destination for millions of Americans from neighboring markets. With the northern Texas cities of Dallas and Fort Worth each less than a 90-minute drive from its border, Oklahoma could cater to a combined population of more than two million.”
So are you thinking about getting into Oklahoma’s quickly expanding cannabis industry? Here’s your comprehensive guide for how to do it.
What type of business license is best for me?
There are several types of cannabis business licenses available in the state of Oklahoma. Here are the categories.
Cannabis dispensary Permits you to purchase cannabis and cannabis products from another licensed dispensary and from people holding processor and cultivator licenses. Allows you to sell cannabis to a licensed patient, the parent or guardian of a licensed minor, a research or educational facility, or a caregiver. Dispensaries, cultivators, and processors get any accompanying transporter license automatically for their own purposes.
Cannabis transporter Permits you to legally transport medical cannabis to and from a licensed dispensary, processor, researcher, or cultivator. This appears as a notation or marking on the business licenses of dispensaries, processors and growers. But you can seek a stand-alone transporter license to provide such services to other licensees.
Cannabis processor Permits you to process marijuana into different consumer products, such as pre-rolls and concentrates, and sell them to licensed dispensaries and other processors.
Cannabis cultivator Permits you to legally grow medical cannabis and sell it to licensed processors and dispensaries, as well as other growers.
Cannabis testing laboratory Permits you to operate a quality-testing laboratory that serves the cannabis industry by analyzing processed and harvested cannabis for the purposes of protecting consumers and other cannabis businesses.
Cannabis waste disposal Permits you to operate a business that can conduct waste-disposal services for the cannabis industry. However, Oklahoma regulators have created only a small number of these licenses. You may apply to operate additional locations once you are approved.
So how do I get a cannabis business license in Oklahoma?
After deciding which license to get, here’s what happens next. You'll go here to begin completing the Oklahoma cannabis business application. But continue reading first to make sure you know all of the requirements and steps involved. Many of the details below are collected from different areas of Oklahoma government Web sites. Regulators don’t make it particularly easy to understand the complete universe of things you’re required to do.
The Oklahoma Medical Marijuana Authority offers this helpful checklist to make sure you include everything needed in your application to them. But that’s just one part of the journey for you becoming fully compliant under state law. The license type you pursue may also have additional requirements beyond the general rules for obtaining a cannabis business license.
Oklahoma regulators reviewing your application for the first time or for renewal have 90 business days to do so. If you are renewing, be sure to advance yourself a few months each year for making sure you don’t risk lapsing into noncompliance. You will have 30 days to submit any missing information if OMMA determines that more is needed.
Who’s eligible for a cannabis business license in Oklahoma?
The principal applicant must be an Oklahoma resident. Proof of identity can be established with an Oklahoma driver’s license or identification card, a U.S. passport, or a tribal identification card. The state defines residency as:
Lived in Oklahoma for the two years prior to application
Lived at one time in Oklahoma over the last 25 years for five continuous years
The applicant must be 25 years or older.
At least 75 percent of the company must be held by an Oklahoma resident or residents. Residency can be established by using:
An Oklahoma driver’s license or identification card
A U.S. passport
A tribal identification card
A voter identification card
A property deed, rental agreement, or utility bills
No company owner can have any nonviolent felony convictions over the previous two years or any other types of felonies within the last five years.
No person with an ownership interest can actively be working in law enforcement.
What are the requirements?
You must pay a license fee of $2,500. Keep in mind that you’ll need to seek separate licenses for individual locations under the categories of dispensary, cultivator, and processor licenses. That means paying the $2,500 for each one. They are valid for one year.
You must file a trade or business name and determine whether to arrange as a sole proprietorship or general partnership or some other form. This could determine whether you need to file a standard certificate of good business standing with the Oklahoma Secretary of State. You’ll need to complete this step before proceeding to the next.
You must obtain an Oklahoma sales tax permit. Dispensaries specifically will need to report two sources of taxes to state authorities at the Oklahoma Tax Commission: your sales taxes, as well as the 7-percent excise tax authorized by State Question 788. The permits cost $20, last for three years, and should take about five days to receive.
You’ll need to supply documentation of all ownership interests in your cannabis businesses. You can do this with operating agreements, articles of organization, copies of bylaws, operating agreements, or other such documents.
You’ll need to complete a series of forms on the OMMA Web site verifying that:
Your company complies with the state’s residency requirements. Here are additional tips from OMMA for understanding the residency rules when multiple people are involved with your cannabis business.
Your top managers and owners have each completed $15 background checks through the Oklahoma State Bureau of Investigation. You won’t need to obtain separate $15 criminal background checks for every license.
You are in compliance with local codes and ordinances on zoning, fire safety, building and construction, environmental waste, and plumbing and electrical.
The applicant is a United States citizen or approved to be inside the United States.
Are there rules for how I can advertise cannabis in Oklahoma?
Yes, and they are more strict than you might imagine. Depending on what type of license you’re seeking, you’ll need to know the rules for labeling and packaging cannabis and cannabis products. Cannabis dispensaries are required to return or refuse any cannabis or cannabis products that are not packaged and labeled according to state statutes. Here are some of the major sticking points in state rules:
Packaging and labels cannot include:
Any statements or claims that cannabis or products from it provide physical or health benefits
Any misleading or false statements
Violations of any federal trademark laws or regulations
Content that seems to target children with images, such as toys or cartoon characters; packages must minimize appeal to kids
Advertising cannot include:
Any design that’s obviously appealing to children
Objects such as toys, cartoons, cartoon characters, or similar images suggesting the presence of a child
Depictions of minors consuming cannabis
Representations that cannabis has therapeutic or curative effects
Messages that are deceptive, misleading, or false
Your packaging must be child-resistant in accordance with federal law to the extent that it’s “significantly difficult for children under five years of age” to open. Your packaging also must generally disclose the tested THC potency, terpenoid potency, and certain government-warning statements.
A uniform Oklahoma symbol is required to be affixed to your products indicating that they contain THC and are unsafe for children and pets. There are additional disclosure requirements if you are making food-based cannabis products. Find more about the advertising and labeling requirements here.
What are the testing requirements?
Beyond the general requirements listed above, you’ll also need to have your cannabis and cannabis products tested for safety and quality by a state-approved laboratory. The testing is required to determine THC potency and terpene profile, as well as the possible presence of harmful micro-organisms, toxins, residual chemicals or solvents, heavy metals, and “foreign materials/filth,” according to the state.
Harvest Batch Current law requires that 10 lbs of usable cannabis be set aside for testing from the same strain, the same cultivation practices, the same harvest time, and the same drying and curing conditions.
Production Batch Current law requires that 10 lbs of cannabis concentrate or other processed cannabis products be set aside for testing purposes from an identical cannabis harvest group and through identical production methods.
Learn more here about the testing process. Or check out this video below from state regulators.
How do I comply with seed-to-sale tracking requirements?
As of May 2021, you’ll also need to be compliant with state laws requiring that every cannabis plant and package be tracked with technology chosen by the state for such purposes. That contractor is the Florida-based company Metrc, and they’re in charge of software and radio-frequency tags that you’ll be required to purchase and utilize for monitoring your cannabis plants and products.
The seed-to-sale tracking program is designed to prevent cannabis diversion to unlicensed people and enables recalls from state regulators in the event that plants or products are identified as unsafe. The cost is $40 per month for use of the Metrc software, plus $0.45 for each cannabis plant and $0.25 for each cannabis product. I’ve written separately about the steps you need to take to integrate Metrc’s software and tags.
There’s still more stuff I have to do?
Even after completing all of these tasks, your journey to becoming a cannabis entrepreneur in Oklahoma isn’t over just yet. Once obtaining a cannabis business license from the Oklahoma Medical Marijuana Authority, you’ll need to then apply for yet another license from the Oklahoma Bureau of Narcotics and Dangerous Drugs Control.
This is required for holders of cultivator, dispensary, processor, and laboratory licenses. However, you are not also required to register with the federal Drug Enforcement Agency, given that cannabis is still federally prohibited.
Processors and cultivators register for the “manufacturer” category of this license. Dispensaries register as “distributors.” The manufacturer license is $500, and the distributor license is $300. Expect about three weeks of processing time. The licensing cost for testing laboratories is $140, and you apply under the “analytical labs” category.
Go here to register for the drug-control license. Here are tips for how to navigate the system online. State regulators instruct that those with multiple licenses and sites contact OBNDDC to learn the correct process since the registration type may differ in your case.
Extras for a waste-disposal license
The application fee for a waste-disposal license is $5,000. In addition to the standard conditions for a cannabis business license listed above, here’s what you’ll also need if seeking a license to conduct cannabis-waste disposal.
Before applying, applicants must possess a permit from the Oklahoma Department of Environmental Quality.
Applicants must show proof of sufficient liability insurance or a letter of insurability showing the following minimum amounts:
Commercial general liability $5,000,000 each occurrence
Pollution legal liability $5,000,000 each occurrence
Extras for a transporter license
Growers, dispensaries, and processors are issued a transporter license along with their business license for an additional $100. But cannabis businesses can separately apply for a stand-alone commercial transporter license that allows you to transport on behalf of other cannabis businesses. A separate application process and fee of $2,500 is required.
Any licensed transporter can designate employees to become “transporter agents,” who obtain a separate license under that category. Transporter agents must meet the state’s residency requirements. Here’s what you’ll need:
Proof that the agent is your employee and 18 years or older with an Oklahoma driver’s license
A $100 licensing fee
A separate application and fee for each employee
Extras for a laboratory license
In addition to the above requirements, you’ll need to show more information for a laboratory license. All applicants must prove they are accredited by an appropriate entity that enforces professional standards, such as the ANSI National Accreditation Board, Perry Johnson Laboratory Accreditation, or the American Association for Laboratory Accreditation. The accreditation must be specific to cannabis or in chemistry and biology.
You must also provide proof of having successfully completed proficiency testing within the past 12 months. Laboratories must separately obtain a state-issued cannabis transporter license or rely upon a private service licensed to transport cannabis. State authorities will first conduct an inspection of your laboratory to do the following before issuing a cannabis laboratory license:
Review personnel records, including for the lab director, testers, and ancillary staff
Review your inventory-tracking system to ensure all test batches or samples are adequately monitored with chain-of-custody documentation from receipt to disposal
Inspect the premises to evaluate for orderliness; review environmental monitoring measures in storage and testing areas; confirm that sufficient space is allocated for testing; review access-control procedures
Review quality-assurance protocols; confirm that a certificate of analysis is present for each test or sample lot; confirm that procedures are in place for transporting and disposing cannabis and related products
Confirm that a sufficient record-keeping system is in place for readily retrieving test results; verify that the lab’s standard operating procedures are readily available to staff
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