Pass the joint: New OMMA rules allow business license transfers

New OMMA rules allow marijuana business licenses to be transferred from one person to or entity another, increasing market opportunity for Oklahoma cannabis professionals.

OMMA’s new rules announced on July 1st brought us many exciting new developments in Oklahoma’s ever-vibrant and evolving corporate cannabis landscape. One immediately notable to us was the omission of language previously barring business licenses from being transferred from one person to another person, from one medical marijuana business to another, or from one legal entity to another. This, in short allows for business license transfers, albeit with no further guidance from OMMA.

In addition to business license transfers no longer being barred, SB 1033 authorized North American publicly traded companies to purchase up to 40% of the equity in an existing Oklahoma cannabis business. With SB 1033 and OMMA’s new rules being immediately enacted by emergency orders, a new market was created overnight. One where Oklahoma cannabis professionals able to consider new business strategies were met with multi-state operators who’ve been sidelined until now waiting to get in on the state’s “green rush.”

We’re already beginning to receive inquiries about licenses being lumped in with properties in real estate transactions at a premium. Mergers and acquisitions are sure become a central aspect of Oklahoma’s cannabis market development over time. With that will come a lot to consider; from developing an acquisition strategy from the start perhaps to the sheer number of tasks to be accomplished in each respective circumstance down the pipe. Consolidation will be a natural part of the changing landscape, whether it’s businesses being bought out, put out or merging to increase their profitability.

Some have communicated concern about 40% of Oklahoma’s cannabis market being up for corporate grabs. Having visited ultra-corporate and impersonal shops in other legal states, it’s understandable. Witnessing what’s happening in state’s like Michigan, where you have corporate capital lobbying against home-grow provisions, it’s understandable. Oklahomans shouldn’t discount their continued ability to dictate the course of the program though, even as it evolves. Competition is already a critical success factor in Oklahoma cannabis without a well established corporate footprint. With mergers now in the mix, local competitors who are increasing their market share through current client base can come together to increase their synergies, potential gains and product to patient reach. Ultimately, with more options comes more opportunity, and given the nature of our program Oklahomans will remain the benefactor.

OMMA has not released guidelines or updated language regarding license transfers, however in our direct dealings with OMMA we have confirmed the process and are confident we can carry you through it. When you reach the M&A phase, the Attorneys at Gies Law firm are here to help you understand the process, make sure your perspectives are well integrated, that you’re agreeing on the essentials and are not left with unresolved expectations. We’re here to make the M&A process and OMMA business license update as simple and successful as possible. Contact us today.