These Cannabis bills were just signed into law in Oklahoma
Six bills relating to Oklahoma’s Medical Marijuana program signed into law by Governor Stitt as the first legislative session comes to completion
“The only constant is change” so they say, and that’s especially true for Oklahoma’s emergent medical cannabis market. This legislative session saw the introduction of 30 bills relating to the state’s medical marijuana program. Now with the session complete, six of them have been signed by Governor Stitt and either are or on their way to becoming law. These bills affect most every part of the industry, from patients to processors, and with inspections and regulatory enforcement ramping up in the background will be important to understand as a license holder of any type.
HB 2646
Last year Governor Stitt vetoed HB 3223, citing it made “substantial policy changes” to the programs framework without full scrutiny coming as a consolidated bill being pushed through amidst a pandemic. The bill as it stands today is still loaded and makes substantial policy changes, though it has definitely faced more scrutiny within the industry leading up to becoming law.
We wrote a full blog about HB 2646 in April. The bill comes with several causes for regulatory concern whether you’re a business license holder, a future hopeful or patient. One senate amendment to the bill requires applicants to submit additional information the OMMA deems necessary to keep a handle on product diversion. While similar provisions are commonplace in other legal states, it will make the application process more arduous throughout the state which could inadvertently limit access. The bill also gives the OSDH authority to issue emergency orders which if not complied with whether due to negligence or not, will subject business owners to a $10,000 a day fine. Initially the bill was going to kill the deli-style dispensary experience for patients and caregivers, but language was added before its passage that clarified dispensaries can still display sample jars and allow patients to handle and smell product from those samples as long as no cannabis from those display jars is for retail sale. Prior to November 1st, 2021 dispensary managers need to separate retail cannabis product to be sold to patients from their display or sample jars meant for patient interaction to remain in compliance.
The upsides of the bill include the allowance of grows and dispensaries to roll and package their own pre-rolls, and possession of marijuana by non-medical card holders will be a misdemeanor, not subject to imprisonment. Read our HB 2646 blog to get the full rundown on this one.
This law goes into effect November 1st, 2021.
HB 2272
HB 2272 got so much attention in its original license cap form that it was easy to lose track of the 29 other cannabis bills making their way through the legislature. When it arrived in the senate the nature of the bill changed drastically, as the entire original language of the bill was struck out and replaced by a substitute amendment. HB 2272 now focuses primarily on disclosures and inspections, which are still of high importance to business license holders.
Licensees and applicants will be required to submit an attestation to the OBNDD confirming or denying the existence of foreign financial interests in their businesses and disclose their identities when applicable. Failure to submit the attestation or 60 day time period will result in the immediate revocation of the medical marijuana business license. The OBNDD will provide the form on their website.
Gone are the laissez-faire days and ways of regulatory inspection with the amended measure. It is now written into law that onsite compliance inspections will happen within the first 180 days of licensure. This applies to all business license types. Whether you are a dispensary, grow or processor, count on it and be prepared for it. This provision is to verify that licensed businesses are in operation or at least working toward being operational. An initial grace period of 180 additional days will be granted to licensees who cannot prove they’re operating or working toward it on the first visit, and a second grace period of the same duration will be given if they fail on the second visit. Licensees will face revocation if after the two grace periods they are unable to prove they’re working toward being operational. So while the regulatory grip may seem to be tightening, this is a clear example of the state giving licensees plenty of opportunity to get it together.
HB 2272 included an emergency order, meaning it became law when signed by the governor (goes into effect July 1st 2021).
HB 2904
The perfect segue from HB 2272’s inspection focus, HB 2904 requires the OSDH to hire and employ sixty-two new compliance and enforcement positions by December of this year. They must also hire and employ six positions to perform legal and financial duties, four investigatory officers and four positions to perform planning and logistical duties. These newly filled positions will empower the OMMA to carry out the inspection cadence defined in HB 2272, which is twice a year and no more than 180 days after you’ve received your license.
SB 1033
SB 1033 grandfathers in dispensaries within 1,000ft of a school that were established prior to the school and defines measurement to be from the nearest door of the school to the front door of the dispensary. In cases of license transfer, the OMMA will see it as a continuation of the original license, and will not be able to deny renewal or revoke a license based upon an error in measurement.
With SB 1033s passing, the OMMA will be allowed to enter into a memorandum of understanding with other state agencies, such as the OBNDD to enforce regulatory compliance. This means that the OMMA can funnel their dollars into the OBNDD in order for the OBNDD to hire agents to go after illegal or non-compliant operations. This would be in addition to the sixty-two new compliance hires made by the OMMA, expanding the regulatory task force further.
Adding to the tax conundrum cannabis business owners face, the Oklahoma Tax Commission will now be able to collect a fee in order to enable them to perform audits on cannabis businesses. Business owners will need to make certain their reporting and tax payments are accurate and on time. If you haven’t been keeping up, start making the effort today to get to date with the state in case you pop up on an audit list.
The gray area around Delta-8 is now defined, with the measure clarifying that “marijuana” shall not include any plant or material containing delta-8 or delta-10 tetrahydrocannabinol, leaving those provisions to the Oklahoma Industrial Hemp Program.
The measure expands marijuana waste to include medical marijuana that fails testing from being remediated and transferred further. Additionally, research, education and medical marijuana waste disposal facilities will be required to develop written standard operating procedures outlining the way it operates its seed-to-sale tracking system. It should be note and known, that all medical marijuana businesses are required to develop standard operating procedures.
SB 1033 also authorizes North American publicly traded companies to purchase up to 40% of the equity in an existing Oklahoma business that has held a valid Oklahoma medical marijuana grower, processor or transporter license for at least 18 months prior to the investment. Dispensaries are not eligible for investment opportunity. Many Oklahomans feel they’re losing their ownership and stake in the game with 40% of the market on the table to be influenced by corporate entities that would have more rolling capital to survive volatility and invest more in growth initiatives than local “mom and pop” shops. It’s a wild card for the industry that opens up a lot of possibilities, such as increased competition with the possibility of monopoly, but conversely more capital in the industry, ability to scale, availability of medicine and accelerated innovation. As with any provision, this comes to a matter of perspective, but the uniqueness of SQ788 being for Oklahomans and locally focused paints this as a problem for many.
Lastly, physicians cannot be reprimanded for issuing medical card which may open the door to conversation between prospective patients and their pcps. And caregivers are capped at growing for just 5 patients, as opposed to being previously uncapped.
SB 1033 also included an emergency order.
The two remaining bills relating to cannabis aren’t as meaty, but may well be important to specific groups of patients and entrepreneurs. HB 862 prohibits smoking cannabis at government buildings, and HB 2930 relates to prohibition of agricultural grants going to cannabis related proposals.
Getting an OMMA business license may remain easy comparatively, but keeping it will require much more attention to regulatory compliance as these laws materialize, positions are filled and there are more eyes on your operation. It’s equally important to stay up with what’s happening in the state legislature and make sure your communications with the OMMA and other state authorities are received, read and understood in a timely fashion as to not miss a 60 day deadline that could lead to a revocation of your license—for example.
Gies Law Firm is on top of what’s coming up in the cannabis industry, not only in Oklahoma but nationwide and federally, as everything plays an indicatory role in where things may go with Oklahoma’s program. We go the distance to ensure our clients are in a constant state of compliance and plainly aware of what’s needed to accomplish that end. Whether you’re beginning your application process, developing business strategy, operating procedures, preparing for an acquisition or needing compliance assistance we make it our mission to help you succeed in Oklahoma’s medical marijuana market and continue serve Oklahoma’s medical marijuana patients. Meet with us today.
