SB 1039: An Unprecedented Threat to Oklahoma’s Medical Marijuana Industry
The Oklahoma Medical Marijuana industry is once again under threat—this time from a deeply flawed bill, SB 1039. At first glance, the bill may seem like a measure to streamline licensing processes, but in reality, it ignores the serious challenges businesses already face due to the Oklahoma Medical Marijuana Authority’s (OMMA) inconsistent and arbitrary application review process.
Since 2019, our law firm has submitted over 2,300 commercial applications on behalf of medical marijuana businesses, and we have seen firsthand the frequent and unjustified rejections issued by OMMA. Many of these rejections are unfounded and impossible to correct.
Here are just a few recent examples of OMMA’s arbitrary denials:
A client’s proof of residency was rejected for being in an “unacceptable format”—despite being a PNG file, which was listed as an acceptable format in OMMA’s own rejection notice.
Another client was rejected due to an “invalid” proof of residency, even though they submitted a valid Oklahoma driver’s license that had been successfully used in prior renewals.
A business was rejected three times for failing to verify five years of land ownership, despite submitting land purchase documents with official county clerk seals from 2013.
Several applicants faced rejection due to GPS coordinates that had been approved in multiple past renewals. Even after submitting an official 911 emergency letter verifying the location, OMMA continued to reject their application–in some cases keeping them in renewal over this singular issue for more than one year.
Thousands of businesses without a Certificate of Occupancy are facing indefinite rejection, despite the passage of SB 1635 last session, which was intended to address this issue. Even when applicants submit the required COO attestation and necessary documentation within the legally mandated timeframe, OMMA refuses to approve them.
These examples highlight systemic issues within OMMA’s review process. Instead of fixing these problems, SB 1039 would make them worse by eliminating licensees’ ability to correct or challenge unfair repeat rejections. The bill’s original text even went as far as subjecting businesses to denial over consecutive clerical errors.
The bill’s text has been amended and now reads:
"The Authority shall deny any application that has been submitted more than once with any errors or omissions that are not clerical or typographical in nature. The lack of a certificate of occupancy shall not be the sole cause for denial of an application."
While this amendment removes the risk of automatic denial over clerical errors, SB 1039 still grants OMMA unchecked authority to reject applications for broadly defined "errors or omissions." This dangerously vague language does not resolve the underlying issue—OMMA’s history of inconsistent and arbitrary application review processes.
Under SB 1039, any licensee facing multiple arbitrary or incorrect rejections will have no recourse—they will be automatically denied. This is an unacceptable outcome that unfairly punishes Oklahoma business owners who are trying to comply with the law.
Beyond its unfair implications, SB 1039 likely fails to meet constitutional due process standards. The Supreme Court case Mathews v. Eldridge (1976) established a three-factor test for determining whether government procedures are adequate. Applying this test, SB 1039 falls short in these areas:
The Private Interest Affected – Business licensing is a significant private interest. Denial results in financial devastation and loss of livelihood for marijuana business entrepreneurs.
The Risk of Erroneous Deprivation – OMMA’s well-documented history of arbitrary rejections makes the risk of wrongful denials extremely high. By permanently barring applicants based on OMMA’s flawed decision-making, SB 1039 amplifies the problem rather than solving it.
The Government’s Interest – The state may argue that limiting resubmissions improves efficiency. However, ensuring fair and consistent licensing practices is a far more compelling public interest than simple administrative convenience.
This may explain why no other state has implemented such an extreme and punitive licensing standard. The National Conference of State Legislatures (NCSL), which tracks cannabis regulations across all 50 states, confirms that every pioneering legal state allows applicants to resubmit or appeal after rejections. In states like Oregon, Colorado and California, regulators provide unlimited opportunities to correct deficiencies, recognizing that simple errors should not lead to business closures.
Across industries, the pattern holds: regulators give chances to fix mistakes. SB 1039’s refusal to do the same lacks precedent or justification and subjects licensees to an unpredictable and irreversible denial process unlike anywhere else in the country.
SB 1039 institutionalizes OMMA’s flaws. The bill does nothing to address OMMA’s inefficiencies yet codifies them into law, making them potentially even more damaging to Oklahoma business owners and their employees. In our experience, commercial medical marijuana licensees are not asking for a free pass on compliance–they’re asking for a fair shot.
The Oklahoma legislature needs to understand: SB 1039 is an outlier with no precedent, no justification and no mercy. It threatens the livelihoods of tens of thousands of Oklahomans who rely on the stability and fairness of a state-licensed industry, undermining their ability to operate or work with confidence in an already volatile regulatory landscape.
Oklahoma’s medical marijuana professionals deserve a fair and transparent licensing process, not a broken system where vaguely defined errors or arbitrary decisions can lead to permanent business failure.
SB 1039 is a direct attack on small business owners and a dangerous blow to the integrity of Oklahoma’s medical marijuana industry—an industry that supports tens of thousands of professionals and provides essential care to over 330,000 Oklahomans. By stripping licensees of due process and forcing them into an unpredictable and unjust system, this bill threatens to destabilize a sector that generates significant economic activity, tax revenue and patient access to critical medicine.
Today the Oklahoma State Senate passed SB 1039 on its third reading with 36 votes in favor, 10 against and 1 excused. This critical development moves the bill closer to becoming law, increasing the urgency for stakeholders in the medical marijuana industry to take action. If SB 1039 is enacted, it will further entrench OMMA’s flawed review process, putting countless businesses at risk of permanent denial due to vaguely defined errors and omissions.
We encourage all stakeholders—business owners, industry advocates and patients—to contact their representatives and demand fair licensing standards before SB 1039 undermines Oklahoma’s medical marijuana industry.
Questions about SB 1039 or OMMA’s process? Contact us—we’re here to help.
