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Oklahoma’s experience with medical marijuana

A good read.

Inside an old metal building off a quiet stretch of U.S. 77, Josh Blevins walked among rows of fragrant marijuana plants basking below carefully calibrated light. Blevins, a former construction engineer from Texas, bought this former scrap yard just north of the farming town of Lexington, population 2,200, after a statewide ballot initiative legalized medical marijuana about four years ago.

Since then, dispensaries have become as ubiquitous as gas stations and churches in much of Oklahoma, where state officials have licensed more than 12,000 marijuana-related businesses and about 1 in 10 people now own medical marijuana cards.

Blevins, 36, has capitalized on the boom, building another 10,000-square-foot warehouse and brand new office space just down the road from the former scrap yard. Like many commercial growers, he created his own supply chain from seed to sale, stocking the shelves of his two dispensaries — both named Twister Roo — in Moore and Noble. It has proven to be both profitable and a learning opportunity, Blevins said, as he eyes expansion to other states with upcoming marijuana ballot initiatives.

“What we’re doing here is kind of building the picture that we want to duplicate in other states,” Blevins said. “Just copy and paste.”

But while Oklahoma has become a kind of nirvana for growers and producers, who enjoy a relatively low startup cost in comparison to other states, it has some lawmakers leery because of lax regulation. Officials with the overwhelmed Oklahoma Medical Marijuana Authority said they’ve been able to inspect only a quarter of licensed marijuana businesses so far.

Oklahoma Gov. Kevin Stitt, a Republican, said during his State of the State address on Tuesday that voters were misled by the language on the 2018 ballot initiative and it has “tied our hands as we regulate the industry.”

“This is causing major problems in our communities,” he added, “and we must get it under control.”

Stitt said the relatively low cost of getting a business license and the lack of a cap on the number of growers has fueled a black market in Oklahoma that may require legislation to reform.

“While we can’t change the past, we can learn from it and improve our future,” Stitt said. “We’re getting the right leaders in place and untying their hands to enforce the laws.”

[…]

The state presented a rare opportunity for legalization in 2018, when medical marijuana backers garnered enough signatures to put one of the most accessible medical marijuana initiatives in the country on the ballot, bypassing the conservative Legislature. The result: It costs $2,500 to apply for a business, cultivation or transportation license in Oklahoma — compared to $100,000 or more in neighboring Arkansas.

“This is a system that is set up to basically create opportunities for small businesses,” said Morgan Fox, the political director of NORML, a national cannabis advocacy organization. “There’s a lot of room for people to start up businesses without a tremendous amount of capital.”

Lured by the state’s low fees and relative lack of regulation, Paulie Wood, a former California grower and the CEO of Kannabiz Monkeeyz, said he decided to close his West Coast operations about two years ago because of the “insane overtaxation” hampering his business.

In California, he paid more than $100,000 a year in state and local taxes to operate two cultivation sites even after one outdoor crop was destroyed by smoke and ash following the Oak Fire in Mendocino County in September 2020. He pays a fraction of that cost in Oklahoma.

“In Oklahoma you can literally start a grow for under $10,000, where in California you’re going to be out hundreds of thousands of dollars to just get started,” Wood said. “They call it the wild, wild west of cannabis in a good way. As a whole, it’s the nicest, friendliest state we could ever want to be in.”

Oklahoma is also friendly toward people trying to get medical marijuana cards, which cost only $120 for the application fee, plus a doctor’s visit. While some states have very specific and restrictive lists of conditions that qualify for a card, such as AIDS and cancer, Oklahoma’s list is relatively expansive and includes less severe medical issues, including anxiety, insomnia and muscle spasms.

But now, a battle is brewing in Oklahoma between advocates who want to expand the industry and opponents who are trying to rein it in. In the legislative session starting next month, state lawmakers hope to play catch-up and introduce new restrictions on growers and processors amid renewed efforts by groups hoping to pass another ballot initiative, this time for full legalization.

Oklahoma’s growing medical marijuana market has been lucrative for the state, generating nearly $150 million in revenue in 2021, up from nearly $128 million in 2020, according to state data.

The Oklahoma Medical Marijuana Authority, which has almost doubled its staff in the past year, is still struggling to get inspectors to all of the licensees, said Adria Berry, the agency’s executive director. “We have not been able to keep up with the demand, but we are getting to the place where we’re able to get many more people out inspecting those places on a day-to-day basis.”

The Oklahoma law says medical card holders must be in-state residents, but Blevins and other growers said much of the demand for their product is coming from out of state, in places like Texas — where possession of marijuana largely remains illegal — and Kansas, another deeply conservative state that is in line to legalize medical marijuana. That high demand has driven down prices, Blevins said, to about a third of what they were when he started in 2018.

“Now they’re so much cheaper than the black market, and they can be bought and sold for profit,” he said.

A few thoughts…

1. The fact that the medical marijuana regime approved by Oklahoma’s voters is extremely appealing to both growers and users because of low costs and lax regulation, and also kind of a nightmare for the state government because of those lax regulations, is probably the most Oklahoma thing about this.

2. That $150 million in revenue generated for the state by the new marijuana industry may sound like a lot, but it would represent less than 0.1% of Texas’ annual revenue, which is to say a rounding error. Texas’ economy is a lot larger than Oklahoma’s, but even then that $150 million would represent about 1% of that state’s annual revenue. (Here’s a more recent number, which isn’t much different.) Adding legal pot to the economy may do a lot of beneficial things, but it’s not going to help fund the state government in any substantial way.

3. Along those lines, this is a reminder that Oklahoma also has casinos. Which also would not generate much revenue for the state of Texas if we had them, though legalizing them here would shift some funds that currently go out of state back to here. You can support or oppose casinos and marijuana as you see fit – I’m strongly for marijuana legalization, and at best ambivalent about casinos – the economic arguments just aren’t that compelling.

4. The article contains the standard bit of optimism about the future potential for expanding access to marijuana in Texas, citing public opinion polls and some recent mumblings by Greg Abbott that are sort of vaguely in favor of something. It therefore makes the classic error of completely ignoring (or being unaware of) Dan Patrick’s implacable opposition to loosening marijuana laws, which renders those two items useless. When Dan Patrick is no longer Lt. Governor, we can talk about how expanded access to marijuana might play out. Until then, it’s a dead letter.

That’s all I got. Link via the Current.

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