Oklahoma Sees Sharp Decline In Active Licenses

Oklahoma’s medical marijuana industry has seen a sharp decline in the number of active cultivation licenses over the past two years. According to data from a Facebook post by the Oklahoma Bureau of Narcotics and Oklahoma Medical Marijuana Authority, the number of licensed growers has decreased by thousands since 2021. This raises the question: why are so many licenses disappearing?

In 2018, Oklahoma voters approved State Question 788 which legalized medical marijuana in the state. This led to the establishment of a robust and rapidly growing industry, with over 339,000 registered patients and almost 10,000 licensed cannabis businesses operating. However, despite its success, the program has faced challenges in regulating the industry and ensuring compliance with state laws.

With so many licenses being awarded, lawmakers issued a moratorium which took effect Aug. 26, 2022, halting any licenses to be awarded. When the moratorium took effect, Oklahoma had 7,285 licensed growers, 2,374 dispensaries, and 1,464 processors per The Oklahoman.

Recently, lawmakers have extended the moratorium on new medical marijuana business licenses for two more years as the state tries to get a handle on the industry. The moratorium that was initially scheduled to end next summer will now end on Aug. 1, 2026.

Decline in Active Licenses

The decrease in active cultivation licenses can be attributed to the crackdown on illicit operations, and stricter regulations by the joint efforts of the Oklahoma Bureau of Narcotics (OBN) and the Oklahoma Medical Marijuana Authority (OMMA) per a Facebook post by OBN.

Cracking down on illicit operations is one of the major reasons for the dropping of license numbers. Over the past four years, OBN Director Donnie Anderson says his agency has identified numerous transnational drug trafficking organizations that moved their illicit market marijuana operations to Oklahoma, utilizing straw owners to illegally obtain a license to operate.

“By 2021, Oklahoma had over 9,400 licensed growers operating across Oklahoma,” said OBN Director Donnie Anderson. “We’ve linked many of these farms to transnational criminal groups from Mexico, China, Armenia, Russia and other countries. Additionally, our investigations into these organizations uncovered evidence of other crimes including labor trafficking, sex trafficking, homicides, Ketamine trafficking, underground gambling operations and world-wide money laundering.”

The OBN created a full-time Marijuana Enforcement Teams (MET) across Oklahoma to strategically target these illegal operations. Since 2021, OBN MET Agents have shut down more than 1,000 illegal marijuana farms, hundreds of arrests, 700,000 lbs deemed going to the illicit market.

“Oklahoma’s marijuana program is no longer viewed nationally as the so-called ‘wild west of weed’. Oklahoma now has gained a proud reputation of having some of the most efficient and effective regulatory oversight and criminal enforcement of any medical marijuana state. The industry, itself, has expressed their support and appreciation for our combined efforts to protect the legitimate businesses and drive out the black-market.” —OBN Director Donnie Anderson

The other reason so many licenses are disappearing in Oklahoma is due to stricter regulations, in 2021, OMMA was able to fully staff its compliance department and start up an Office of Investigations and Enforcement (OIE) to thoroughly investigate claims of illicit or non-compliant activity within the licensed market. The agency has completed almost 7,000 inspections and 4,600 operational status visits since becoming an independent state agency on November 1, 2022.

“The state’s medical marijuana industry started in an unprecedented way allowing for a relaxed free market that resulted in a 64:1 oversupply in product. Through data-driven decisions, support and feedback from medical marijuana patients, industry leaders, partners across state government, and Oklahomans spanning the state, we are able to tackle the illicit operators and non-compliant licensees efficiently and effectively.” – OMMA Executive Director Adria Berry

Oklahoma lawmakers also passed legislation to crack down on regulatory issues, for example, the passing of Senate Bill 1737 which took effect Nov. 1, 2022. The law requires all commercial growers to post signage at the perimeter of their property. The sign must be at least 18 inches by 24 inches, have standardized black font at least two inches tall on a white background, and include the business name, physical address, phone number, and OMMA license number. Senate Bill 1737 resulted in the Oklahoma Medical Marijuana Authority (OMMA) filing 165 petitions for revocation, against licensed grow facilities for failure to have signage.

“When the legislature sent this mandate to the OMMA to implement, our inspectors out in the field immediately began noting which facilities were in compliance and which ones were not,” said Executive Director Adria Berry in a press release. “As a regulatory body, it’s our job to ensure the licensed medical marijuana industry is in compliance with state laws and regulations. Consistent regulation is essential for shaping a balanced and well-regulated cannabis market in our state. Kudos to the thousands of businesses out there that took the time to put up proper signage.”  

Because of the stricter regulations and going after operators entering into the illicit market the number of licenses has severely dropped over the years. OBN Registrations for growers dropped from 9,400 in 2021, to 6,400 in 2022, and today that number is down to approximately 3,200 per the FB post.

Overall, the sharp decline in active cultivation licenses in Oklahoma can be attributed to a combination of factors. Initially, when the medical marijuana program first started, there were few restrictions on obtaining a license, which predictably led to an oversaturation of the market.

This was then followed by stricter regulations and concerted efforts to crack down on illicit operations, resulting in a significant decrease in the number of licenses. The state has also extended the moratorium on new medical marijuana business licenses for two more years, further contributing to the decline.

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