Three new Cannabis bills that are good for business in Oklahoma
Three more cannabis bills are expected to drop this week in the state that would radically expand medical access, grandfather in licensed locations and end the prohibition of license transfers—increasing the value of holding one.
This legislative season is shaping up to be a big one for marijuana reform. Plans to prioritize federal legalization have been expressed by joint members of congress and legalization bills have been introduced in a dozen states now according to cannabis wire. Even more legislation is expected to drop in the coming days and weeks across the country with additional states joining the Adult Use movement.
We recently wrote about a few bills that were introduced just ahead of the 2021 legislative season in Oklahoma — that included:
HB 1960 allowing Dispensary delivery
HB 2216 allowing Out of State access
HB 2279 expanding the medical program to pets
HB 1961 the “adult use” bill
This week we expect three more bills to join the ranks, all of which carry an intention to expand the medical program in the state and add value and protections to existing Oklahoma cannabis businesses. We’ll do our best to go over them in a way that’s easily digestible.
Non-Resident Medical Expansion
HB 2022, written by Rep. Fetgatter, would eliminate the temporary access option for non-residents and instead authorize qualifying patients from all 50 states to apply for Oklahoma medical marijuana patient and caregiver licenses.
This is following an emerging positive trend of expanding patients rights through reciprocity and in turn— expand the state’s medical cannabis program as well. ICYMI in our last blog on new state legislation: HB 2216 that was introduced Jan. 21 by Rep. McDugle would expand medical access to medical card holders from other states.
If passed HB 2022 would differ in that it would allow citizens of other states to apply for and obtain a medical cannabis license, and be granted the same rights as residents as they relate to the purchase, consumption and possession of medical cannabis in Oklahoma.
This sort of radical reciprocity could certainly address the surplus of cannabis in the state by vastly expanding market potentials, as well as serve as a solution to the lack of medical programs or programs that are otherwise restrictive whether it be due to cost or qualifying ailments in surrounding states.
Some questions might arise around granting the same rights as residents such as, “why would out of state folks need homegrow provisions?” One specific medical use case would be say, someone coming to care for a loved one dealing with cancer or an end of life situation. That caregiver could apply for a license without having to establish residency and grow plants for the patient’s medicinal use without fear of prosecution. I suspect there will be some concerns about interstate travel and conflicting state laws, but it is no more valid of a concern than it would be with an Adult Use bill—which 15 other states plus D.C. already employ.
This bill passing would be a win for patients and businesses alike and continue to center Oklahoma’s free market approach to medical legalization and regulation as exemplary across the country.
Grandfathering of Licensed Locations
We recently touched on HB 3228, vetoed by Stitt last year, in relation to Dispensary Delivery when it was reintroduced as a standalone bill last month. In addition to allowing for dispensary delivery, that bill would have permitted dispensaries to stay in the same location if a school is built within 1,000 feet after it opens. That might not even seem like a risk you’d need to mitigate until you realize as it relates to this subsection, ““public or private school” means any nursery school, preschool, elementary school, secondary school, college, university or career or technical school,” and there have historically been businesses that have faced loss of renewal privileges and licensure because of these definitions and how measuring points have moved.
SB 1033 is the second piece of legislation we’re seeing that’s been taken out of HB 3228 to stand on its own and aims to eliminate this anxiety for existing businesses.
If passed…
“The Authority shall not deny any issuance or renewal of licensure, deny any transfer of licensure pursuant to a change in ownership or revoke any license due to mistake in measurement by the Authority or any change in public or private school usage after an initial license has been issued at the location. The licensed location shall be grandfathered by the Authority upon initial licensure as long as the property is used in accordance with the original licensed purpose. ”
There is a delicate balance to hold in eliminating the opposing fears of medical cannabis business owners who may face closure at any moment and families whose children attend educational and care facilities within a certain distance of them. With the right framing and education coupled with a demonstrated sensitivity of understanding for both sides’ concerns, hopefully we can find it both on a community and legal basis.
At the end of the day it could be argued that some patients rely on medical cannabis just as much as some parents do daycares, and if a business has been established and is operating in accordance with state law, it should not face closure if measuring points change or an institution moves in that would have invalidated their original license and compliance approvals.
Business License Transfers
Back when SQ 788 was passed, it prohibited business license transfers. That essentially renders owning an OMMA business license in the case of an acquisition valueless.
HB 2023 (Rep. Fetgatter) eliminates that prohibition and better positions cannabis business owners on both sides of the evolving marketplace.
If passed the license of a medical marijuana dispensary, processor and grower may be assigned or otherwise transferred from one person to another person, from one medical marijuana business to another, or from one legal entity to another.
License transfers will still require application approval from the OMMA. The licensee will be required to submit a transfer request application and pay a transfer application fee of $500.
This bill is coming at a perfect time with so much movement on a federal level and litigation that would allow potential of out-of-state players to enter the market. In both scenarios, acquisitions are likely to increase. Acquisitions are also an organic element of free market activity, so even as prominent players within the state start to emerge without those factors, acquisitions will increase—and with this bill passing, so will each license holders value proposition.
The attorneys at Gies Law Firm can help you navigate this ever changing legal landscape and provide industry insights and expert counsel to help grow your business. We also understand the complex distance between state and federal law and can advise you around the complications that often arise in the intersection of corporate transactions and the medical cannabis industry. Contact us today.
