What’s happening in Cannabis Law: 2021 Legislative Update
Proposed measures would completely transform Oklahoma’s Medical Marijuana program as it is today—in one case opening it to residents from all 50 states—in another temporarily capping licenses.
The uncapped medical marijuana market Oklahoma has grown and come to be known for might be coming to a temporary close. HB 2272, a bill we wrote about that got a lot of attention when it was first introduced passed the House 69-21 on Wednesday March, 10th. While HB 2272 might be atop everyone’s awareness right now, there are many more bills making their way through the legislature that would transform and expand the state’s medical marijuana program. Here’s what’s moving through so far…
HB 2646: Medical marijuana; clarifying duties of the Oklahoma Medical Marijuana Authority
HB 2646 amends Section 1 of SQ 788, relating to patient and caregiver licensing requirements and carries over much of what was included in HB 3228. It introduces a short-term 60 day medical patient license for patients who can’t get a 2 year doctor recommendation. The bill would also allow nonresident patients to receive a temporary 3-day medical cannabis permit, and medical dispensaries to issue said permits upon verification for a fee of $75. There would be no limit to how many 3 day permits a nonresident could purchase while visiting the state. On the other end of the spectrum for patients rights, the bill provides that the license of a patient whose physician determines no longer needs medical marijuana can be immediately voided without right to an individual proceeding.
Licensed commercial growers would be authorized to package and sell prerolled marijuana not exceeding 1g to licensed medical marijuana dispensaries. The bill also authorizes dispensaries to prepare and package non-infused pre-rolled medical marijuana; the original language only specifies the packaging of pre-rolls.
HB 2646 also specifies that distance from schools is to be measured from the nearest property line of the school to the nearest perimeter wall of the dispensary. It states that properties that are not used for classroom instruction on core curriculum and are not on the same campus as a building used for such do not constitute a school. Dispensaries licensed prior to the act are grandfathered in, and the establishment of a school within 1,000 feet of an already existing dispensary shall not be cause for revocation or non-renewal of the license.
The bill clarifies that testing laboratories cannot employ or be owned by any individual who is financially interested in any licensee or medical marijuana business located within the state of Oklahoma.
Transporter license annual fees will be reduced from $100 to $25, and applicants will now be required to show proof of current residency as with all other license types. Transporter licenses will also be issued to licensed research and education facilities and testing laboratories.
With the bills’ passing, the Department would be authorized to issue two types of medical marijuana processor licenses:
1. Nonvolatile, which involves using any solvent in the extraction process that is not a volatile solvent, including carbon dioxide; and
2. Volatile, which involves using any solvent that is or produces a flammable gas or vapor that, when present in the air in sufficient quantities, will create explosive or ignitable mixtures and may also include extraction using nonvolatile solvents or no solvents.
Things to be aware of from a constant-compliance perspective: The OSDH and OMMA would no longer be required to provide 24 hours’ notice before inspecting or investigating any business licensee or provide sufficient time for the licensee to secure legal representation before questioning.
It also would raise the fines for grossly inaccurate or fraudulent reporting by a medical marijuana business from $1,000 to $5,000 for the first offense and from $5,000 to $10,000 for any subsequent offense.
Lastly for the sake of this writing, the bill requires all medical marijuana testing laboratories to obtain accreditation prior to applying for a receiving a license, beginning November 1, 2021 and modifies the limits for test batches, harvest batches and production batches growers and processors must separate.
There’s a lot more in this bill, but I feel this is the meat of what is relevant to the most common business licenses and patients. HB 2646 passed its house of origin 96-0 indicating it will most likely become a law barring any roadblocks on its way home. The full bill summary can be read here.
SB 1033 which also passed its house of origin would also grandfather in existing business locations in the case of a school being established within 1,000ft.
HB 2004: Medical marijuana; licensing; clarifying duties and functions of the Oklahoma Medical Marijuana Authority; taxes; emergency.
HB 2004 is another bill like HB 2426 that addresses almost every aspect of the medical marijuana statute in Oklahoma and brings with it some wins for certain groups of patient rights and market accessibility. From the top, the bill expands the amount of mature plants a patient can possess from 6 to 12. It reclassifies the possession of up to 1.5 ounces of marijuana by someone without a patient license as an offense not subject to imprisonment and punishable by a fine and court costs not to exceed $400, and does not include the language “misdemeanor.”
The bill provides a reduced patient license application fee of $20 for veterans with a disability rating of at least 50% and allows veterans with a disability rating of at least 25% to apply to the Tax Commission for a medical marijuana excise tax waiver. 25% is reduced from the current 100.
It would prohibit counties, cities and other political subdivisions from assessing fees to patient or caregiver licensees for the use or cultivation of medical marijuana and requires a warrant for OMMA to share records with any other state agency or political subdivision.
Pieces that affect the OMMA application process:
The big thing for program accessibility is that HB 2004 would only require a medical marijuana business to submit a certificate of compliance with their application or request to change location if located within the incorporated boundaries of a municipality. Be it that obtaining Certificate of Compliance can prove to be one of the most cumbersome aspects of the application process to navigate, it certainly would expedite market entry.
The bill would also modify the acceptable documents for proof of residency, and provides that processor licensees do not have to obtain a sales tax permit to apply for or renew a processor license. Stating:
The processing of marijuana into a concentrated form for a patient or caregiver for a fee is considered a service and not subject to sales or excise tax;
HB 2004 emphasizes that cities and political subdivisions must treat medical marijuana businesses the same as other businesses, though they may restrict one dispensary from being within 1,000 feet of another.
For hopeful dispensaries owners however, it increases the residency requirement from 25% to 49% ownership.
Among other things, the bill would delete the requirement that the 75% of surplus proceeds from the 7% tax apportioned to the General Revenue Fund be used solely for common education. The measure also has an emergency clause.
HB 2004 passed its house of origin 82-16 and can be read here.
HB 2674: Oklahoma Medical Marijuana Authority; transferring the Oklahoma Medical Marijuana Authority to the Alcoholic Beverage Laws Enforcement Commission
If passed, HB 2674 would transfer all powers, duties and responsibilities of the OMMA from the State Department of Health to the Alcoholic Beverage Laws Enforcement Commission.
Some critics are worried about the optics of the medical program being regulated by the ABLE Commission, while others point to silver linings in the Commission’s resource ability to enforce regulation that may actually protect the integrity of the program over time in comparison to the Health Department.
HB 2674 passed its house of origin 86-10. The bill summary can be found here.
SB 459: Workplace drug and alcohol procedures; adding certain volunteers; modifying safety-sensitive positions.
SB 459 amends sections of HB 2612 (2019), which established the Patient Protection Act to expand the definition of “employee” to include subcontractors and volunteers, and safety sensitive positions to include people performing law enforcement duties and vulnerable or elderly adult care, disabled or handicapped care.
Its passing would mean if you are a subcontractor or volunteer in a “safety-sensitive position,” as defined originally by HB 2612, you may be subject to a workplace drug and alcohol testing policy under the terms of the hiring organization’s policy, just as a full time employee of the same job classification would.
SB 459 passed its house of origin 37-9 and can be read here.
HB 2272: "Oklahoma Cap on Medical Marijuana Businesses Act of 2021”
HB 2272 is the one taking up all the space these days. We wrote about it when first introduced, so won’t get to in depth again here. When first introduced, HB 2272 would have placed an undefined cap on marijuana business licenses. Now as it makes its way to the Senate, it has been amended to cap the market for a temporary two-year period beginning September 1, 2021 and ending September 1, 2023.
The bill will also introduce inactivity measurements for dispensaries and grows, and a voucher system that would increase the cost of entry for applicants by at least $10,000.
HB 2272 passed its house of origin 69 to 21. The engrossed version can be read here.
HB 2022: Medical marijuana; patient and caregiver licenses
HB 2022 is a straight forward bill that takes reciprocity to a whole new level by introducing a non-resident medical marijuana patient license and establishes the application fee as $200—valid for up to 2 years. Citizens from all 50 states could apply for and obtain an Oklahoma medical marijuana card, with no specified qualifying conditions. The applicant will have to be 18 years of age and receive a recommendation from an Oklahoma physician.
This bill was one we wrote about in our blog, “Three new Cannabis bills that are good for business in Oklahoma.” It passed 53-31 with 17 more excused from the vote. You can read the bill here.
HB 2023: Medical marijuana; protections for medical marijuana patient licenses; dispensary, processor and commercial grower licenses
As previously written about as well, HB 2023 eliminates the prohibition of license transfers and better positions cannabis business owners on both sides of the evolving marketplace. This bill’s passing would make it possible to transfer a marijuana business license from one person or entity to another for a fee of $500, as long as approved by the OMMA. Once approved, the transferee would be entitled to all rights, privileges and exemptions provided to license-holders.
The measure passed 61-24 and can be read here.
SB 445: Medical marijuana; providing cumulative penalties for certain offenses
SB 445 clarifies the penalties someone would face, whether a bud tender of a dispensary or patient or caregiver, if they diverted or shared cannabis with an unlicensed person. In addition to the existing fines for such a violation, this measure would make them subject to penalties in the Uniform Controlled Dangerous Substance Act.
For patients and caregivers, the first offense would subject them to the penalties in the Uniform Controlled Dangerous Substance Act and a $200 fine.
For dispensaries, the first offense would incur an administrative fine of $1,000. For the second offense for impermissible diversion, would subject them to the penalties in the Uniform Controlled Dangerous Substance Act and a $500 fine and may result in the revocation of the business license if proven to be intentional or grossly negligent.
The subsection and penalties referenced in the Uniform Controlled Dangerous Substance Act are defined as:
(a) An individual may not knowingly or intentionally possess a controlled substance unless the substance was obtained directly from, or pursuant to, a valid prescription or order of a practitioner while acting in the course of the practitioner's professional practice, or was otherwise authorized by this [Act].
(b) An individual who violates subsection (a) with respect to a substance included in Schedule I or II, except for less than [29] grams of marijuana, is guilty of a [felony] and upon conviction may be imprisoned for not more than [X ], fined not more than [ X], or both.
(c) An individual who violates subsection (a) with respect to a substance included in Schedule III, IV, or V is guilty of a [felony] [misdemeanor] and upon conviction may be imprisoned for not more than [X], fined not more than [X ], or both.
(d) An individual who violates subsection (a) with respect to less than [29] grams of marijuana is guilty of a [misdemeanor] and upon conviction may be imprisoned for not more than [X], fined not more than [X], or both.
Currently, neither patients, caregivers or medical marijuana businesses are subject to felony criminal convictions for the scenarios defined by the bill. If passed, SB 445 would become law on November 1st, 2021 subjecting all aforementioned groups to such penalties. The bill’s language does offer the right to request a hearing to contest an action or proposed action of the Department. It moved through the Senate 38-2 in favor. The bill can be read here.
HB 862: Medical marijuana; designating certain property as smoke-free; specifying certain method of measurement
SB 862 would prohibit the smoking or vaporizing of cannabis at government buildings— places where smoking of nicotine and tobacco products are already prohibited as well. The bill also defines the parameters for measuring distance from a school to a dispensary as from the entry of the school to the nearest property line of the dispo.
HB 862 passed 44-1. Read it here.
SB 522: Medical marijuana; requiring Oklahoma Medical Marijuana Authority to contract with third-party vendor to provide certain services. Effective date.
SB 522 would direct the OMMA to contract with one or more 3rd party vendors to carry out the licensing services for the State. The OMMA would define exactly what those services would include, but the bill describes the third party vendors as carrying out the process of approval or eligibility for applicants as well as issuing credentials or “badges” on behalf of the Authority.
In the case a third party vendor ruled an applicant didn’t meet the minimum satisfactory requirements, that applicant would be able to appeal directly with the OMMA.
A change is gonna come
There are many more bills relating to Oklahoma’s medical marijuana industry that remain in their house of origin for the time being, including HB 1961 — the Adult Use Legalization bill. Given the nature, number and vote record of these bills, it’s inevitable the market and program will look different in the second half of the year than it does now, or did at its inception. Whether that’s bad or good is largely up to who’s doing the reading.
Gies Law Firm and our attorneys have always been hyper focused on the rights of patients and success of our business clients entering and sustaining themselves in the market. No matter what changes come, nothing will change about the assurance of compliance and ease we bring to navigating all matters related to Oklahoma’s cannabis industry. If you’re in a situation we can bring ease to or help navigate regarding Oklahoma medical cannabis, schedule a consultation today.
