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How To Open a Dispensary in Oklahoma

Are you thinking about how to open a dispensary in Oklahoma? With the legalization of medical marijuana in the state, there has been a booming business for dispensaries. This guide provides entrepreneurs with essential information on opening a dispensary in Oklahoma, highlighting potential opportunities and necessary regulations in the medical marijuana business.

Overview

In June 2018, Oklahoma significantly advanced its cannabis policy by legalizing medical marijuana through State Question 788. This decision, supported by 57% of voters, showcased strong public backing and introduced a notably liberal approach to medical marijuana legislation. Unlike many states, Oklahoma’s law did not specify a list of qualifying medical conditions, allowing physicians considerable discretion in recommending medical marijuana for various health issues.

One of the most unique parts of Oklahoma’s approach was not limiting the number of licenses for medical marijuana stores. This decision led to a quick and large growth in the number of these stores across the state. By the end of 2018, there was a big increase in applications for store licenses, and by 2020, Oklahoma had a lot of these stores for its population size, one of the highest numbers in the country. This growth happened alongside an increase in the number of patients registering to use medical marijuana, showing that more people in Oklahoma were accepting and using it for health reasons.

In March 2023, Oklahoma voters opposed State Question 820, which aimed to legalize cannabis for adult use, with 63% voting against it. This initiative proposed legalizing recreational marijuana for adults 21 and older, setting specific possession and cultivation limits, and proposing a sales tax on marijuana. Additionally, the initiative aimed to offer a process for clearing certain past marijuana-related offenses from criminal records. The measure’s defeat highlighted substantial resistance to legalizing recreational marijuana in Oklahoma.

 

Recent legislative changes have had a major impact on the state’s cannabis industry. On May 2, 2023, Governor Kevin Stitt signed a new bill aimed at reducing illegal cannabis operations. This law gives state agencies more authority to check and enforce medical marijuana regulations. It allows police to take and destroy cannabis that isn’t properly documented and permits surprise inspections by law enforcement.

On June 9, 2023, Governor Stitt rejected Senate Bill 437, which proposed several measures including mandatory pre-packaging of cannabis products, restrictions on its use by minors, and limits on THC content in edibles. The governor’s rejection was based on concerns that the bill might slow down the state’s efforts to handle illegal marijuana operations.

Oklahoma continues to adjust and refine its cannabis regulations, presenting a complex and ever-changing regulatory landscape. The state’s legal framework permits the use of medical marijuana only, with recreational marijuana remaining illegal. Dispensaries in Oklahoma are limited to selling cannabis products exclusively to individuals holding a valid medical marijuana card.

Understanding the Legal Framework and Licensing Process

Compliance with both state and local regulations is essential for the legal operation of a dispensary. These regulations can change as the industry evolves, making continuous monitoring and adaptation a key factor in running a successful dispensary.

The Oklahoma Medical Marijuana Authority (OMMA) was established as the regulatory agency for Oklahoma’s medical marijuana program, following the authorization of the state’s medical marijuana program by Oklahoma voters in 2018 with State Question 788 (SQ 788). OMMA, initially part of the Oklahoma State Department of Health until October 31, 2022, became an independent state agency on November 1, 2022. Its responsibilities include processing commercial and patient license applications, providing customer service to licensees and applicants, facilitating the rulemaking process based on state statutes, and enforcing rules. OMMA also investigates possible violations of medical marijuana laws. The agency’s mission is to promote public health and safety through the regulation and enforcement of responsible medical cannabis practices by patients and commercial licensees. Its vision is to ensure a safe medical cannabis program that is appropriately regulated to support responsible industry growth and innovation.

Application Process Details

The application process requires several key pieces of documentation. Applicants must provide proof of Oklahoma residency and undergo a background check. Additionally, a comprehensive business plan is required. This plan should demonstrate the applicant’s understanding of the market and readiness to operate a dispensary. Applicants must also ensure that their proposed dispensary location complies with zoning laws and is ready for operation upon receiving the license.

Prospective dispensary owners must submit a detailed application to OMMA, accompanied by a non-refundable application fee. This process is the first step towards obtaining a license to operate a dispensary in the state.

Eligibility Criteria for Applicants

To be eligible to open a dispensary in Oklahoma, applicants must meet specific criteria set by the state. Applicants are required to be at least 25 years old and must be Oklahoma residents. Additionally, at least 75% ownership of the dispensary must be held by residents of Oklahoma. This rule is in place to ensure that the benefits of the medical marijuana industry primarily support the local economy and residents of the state.

Documentation and Business Registration

Prospective dispensary owners must prepare and submit a range of necessary documents as part of their application. This includes conducting a criminal background check for all owners, which is a standard requirement to ensure the integrity of those entering the medical marijuana market. Financial statements are also required to demonstrate the financial readiness and stability of the business. Proof of Oklahoma residency for all owners is another crucial document, aligning with the state’s requirement for majority local ownership.

In addition to these documents, businesses must be officially registered with the Oklahoma Secretary of State. This registration is a fundamental step in establishing a legal business entity in the state. Furthermore, applicants must have a compliant physical location for their dispensary. This location must comply with specific criteria, including being appropriately zoned for a dispensary and not being within 1,000 feet of the property line for any public or private school.

Additional Requirements

Applicants must provide proof of identity, which can be established by providing a digital, color copy of valid documents such as an Oklahoma driver’s license, identification card, U.S. passport, or other approved identification. Proof of Oklahoma residency can be established by providing documents like utility bills, property deeds, rental agreements, or state tax returns. Each owner must supply an Affidavit of Lawful Presence Form and supporting documentation if they are not a U.S. citizen.

These comprehensive requirements are designed to regulate and maintain the integrity of Oklahoma’s medical marijuana industry, ensuring responsible management and operation of dispensaries within the state.

Commercial Cannabis License Types and Fees in Oklahoma

Dispensary License

This license, which is valid for one year, allows the sale of medical marijuana, including mature plants and seedlings, exclusively to other licensed dispensaries, patient license holders, caregiver license holders, research license holders, and the parents or legal guardians of minor patients. 

The application fee for a dispensary license is calculated as 10% of the dispensary’s combined annual state sales tax and state excise tax on medical marijuana, with a minimum fee of $2,500 and a maximum of $10,000. There is also a credit card processing fee added to the application fee.

Grower License

This specialized license limits sales exclusively to other licensed parties. The specialized grower license, valid for one year and requiring annual renewal, restricts sales to licensed parties in the medical marijuana industry, such as processors and dispensaries. Additionally, a transporter license is included, enabling legal transportation of products to other licensed businesses, and ensuring a regulated supply chain.

The cost for a medical marijuana grower license in Oklahoma ranges from $2,500 for smaller spaces (up to 10,000 square feet indoors or 2.5 acres outdoors) to over $50,000 for larger areas, with an additional requirement of a $50,000 surety bond or five-year property ownership to ensure financial stability.

Processor License

This license allows processors in Oklahoma to sell their products to licensed dispensaries and other processors, and to convert marijuana into concentrates for patient license holders. Issued by OMMA in hazardous and non-hazardous categories based on extraction methods, it includes a commercial transporter license and requires annual renewal and adherence to state regulations.

The fee for a medical marijuana processor license in Oklahoma ranges from $2,500 for smaller operations (up to 10,000 pounds of biomass or 100 liters of concentrate) to $20,000 for larger ones (over 300,001 pounds of biomass or 1,001 liters of concentrate), with a background check requirement and a processing time of up to 90 business days by OMMA

Transporter License

Businesses that want to transport medical marijuana and related products between licensed businesses need to obtain a commercial transporter license. This standalone license is specifically for transportation purposes, meaning that license holders cannot grow, process, or sell medical marijuana themselves; they can only transport products for other licensed businesses.

The application fee for a commercial transporter license is $2,500, nonrefundable, plus a $58.30 credit card processing fee. The Oklahoma Medical Marijuana Authority (OMMA) processes these applications within 90 business days. 

Transporter Agent License

Individuals involved in transporting medical marijuana as agents, employees, officers, or owners of a commercial transporter, grower, processor, or dispensary in Oklahoma require a commercial transporter agent license, valid for one year and subject to deactivation, surrender, or revocation. The application fee for a transporter agent license is $25, nonrefundable, plus a $2.61 credit card processing fee. Each agent license requires a separate application and fee. OMMA processes these applications within 30 business days.

Testing Laboratory License

Businesses aiming to conduct medical marijuana testing in Oklahoma must acquire a testing laboratory license, essential for ensuring product safety, potency, and compliance with state regulations. This license, valid for one year, comes with specific compliance obligations and is contingent on the validity of the business license of the employing entity.

The application fee for this license is determined based on the volume of samples processed, ranging from $2,500 for up to 10,000 samples to $20,000 for over 300,001 samples. This tiered fee structure ensures fairness for businesses of varying sizes.

Waste Disposal Facility License

This license grants the licensee the authority to handle the proper disposal of medical marijuana waste and also permits them to transport medical marijuana waste to disposal facilities. 

Applicants are required to submit a non-refundable application fee of $5,000 in addition to a $114.55 credit card processing fee.

Research License

A research facility license allows for marijuana growth, cultivation, possession, and transfer for approved research purposes, requiring a project description in the application. 

Applicants are responsible for submitting a nonrefundable application fee of $500, in addition to a $13.30 credit card processing fee.

Education License

An education facility license permits the offering of training and educational programs on medical marijuana aspects like cultivation, harvesting, preparation, and product creation, with activities limited to purposes approved in the application, including a detailed project description. Applicants are required to submit a non-refundable application fee of $500, in addition to a $13.30 credit card processing fee.

It is important to note that Oklahoma has implemented a moratorium on new licenses for dispensaries, growers, and processors. This moratorium, initially established by 

HB 3208 (2022) and extended through House Bill 2095, enacted on May 2, 2023, is set to last until August 1, 2026. This extension under HB 2095 puts a hold on issuing new licenses for medical cannabis dispensaries, processors, or growers unless the Executive Director of the Oklahoma Medical Marijuana Authority (OMMA) determines that all pending licensing reviews, inspections, or investigations are complete. However, current licensees are still allowed to apply for renewals. 

Medical Marijuana

In Oklahoma, the medical marijuana laws established in 2018 provide a well-structured approach to the use and regulation of cannabis for medical purposes. This law allows treating doctors to recommend cannabis for therapeutic use, leading to a personalized approach to patient care. Under this system, licensed patients are allowed to have significant amounts of marijuana, including up to eight ounces in their home, one ounce in concentrated forms, 72 ounces in edible form, and up to six mature and six seedling plants. They can also carry up to three ounces on their person. For those without a license, having up to 1.5 ounces of herbal cannabis is a minor offense punishable only by a fine.

The state’s medical marijuana program serves a wide range of people, offering different types of licenses such as Adult Patient Licenses for residents 18 and older, Out-of-State Patient Licenses valid for 30 days, Short-Term Licenses valid for 60 days, Minor Patient Licenses for those under 18, and Caregiver Licenses. The process to get these licenses usually requires a doctor’s recommendation, photo identification, and proof of residency, with extra rules for minors. The fees for these licenses are generally $100, with lower prices for Medicaid or Medicare enrollees and 100% disabled veterans. Caregiver licenses, important for helping homebound patients, are given without a fee.

Oklahoma has a significant number of registered medical cannabis patients. As of January 2, 2024, there are a total of 332,223 patients in the state.

This detailed legislation and licensing system ensures regulated access to medical marijuana, recognizing the roles of caregivers and protecting the job rights of qualifying patients. It shows Oklahoma’s commitment to including medical marijuana in healthcare, focusing on patient well-being while keeping regulatory control.

Market Opportunity

An economic impact and tax analysis by Vicente Sederberg LLP and the Oklahoma Cannabis Industry Association had projected significant financial benefits for Oklahoma if State Question 820 was passed. However, this legislation, which aimed to legalize, regulate, and tax marijuana sales for adults over 21, was rejected by over 60% of voters on March 7, 2023. 

The analysis estimated that between 2024 and 2028, the state could have seen $821 million in tax revenues from both medical and recreational marijuana sales. This would have included $434 million in new revenue from a 15% excise tax on recreational marijuana, along with standard state and local sales taxes. The projections were based on an anticipated $1.841 billion in recreational sales and $2.478 billion in medical sales over five years. However, with the rejection of State Question 820, these projected revenues will not be realized.

Operational Essentials for Running a Dispensary in Oklahoma

Running a dispensary in Oklahoma involves following a set of operational requirements essential for smooth and legal functioning. These requirements include various aspects of the business, including inventory management, security measures, and staff training. Ensuring compliance with these operational standards is crucial for maintaining the dispensary’s license and reputation.

Inventory Management, Security Measures, and Staff Training

Effective inventory management is key to running a successful dispensary. This involves accurate tracking of cannabis products from receipt to sale, ensuring compliance with state regulations on product handling and storage. Security measures are equally important, with dispensaries required to implement systems to prevent unauthorized access and theft. This includes physical security measures as well as cybersecurity protocols. Staff training is another critical component, ensuring that all employees are knowledgeable about state cannabis laws, product information, and customer service best practices.

Essential Software and Technology Solutions

Utilizing the right software and technology solutions can significantly enhance dispensary operations. This includes point-of-sale systems tailored for cannabis sales, inventory tracking software, and security systems. These tools not only aid in regulatory compliance but also streamline operations, improve customer experience, and enhance overall efficiency.

Marketing and Customer Engagement in Oklahoma

Strategies for Marketing a Dispensary

Marketing a dispensary in Oklahoma requires a strategic approach that complies with state advertising regulations. Effective marketing strategies might include community outreach, educational events, and targeted promotions. Understanding the local market and customer preferences is key to developing a successful marketing plan.

Importance of Customer Engagement and Community Involvement

Building strong relationships with customers and engaging with the local community are vital for the growth and sustainability of a dispensary. This can be achieved through excellent customer service, community events, and involvement in local initiatives. Engaging with customers and the community not only builds trust but also helps in educating the public about the benefits and responsible use of medical marijuana.

Leveraging Digital Marketing and Social Media

Digital marketing and social media are powerful tools for reaching a wider audience and engaging with customers. Dispensaries can use these platforms to share educational content, promote products, and communicate with customers. However, it’s important to navigate digital marketing carefully, adhering to state regulations and platform policies regarding cannabis advertising.

Security and Safety Measures for Dispensaries in Oklahoma

Security is a top priority for dispensaries in Oklahoma. Implementing robust security systems is essential to protect the dispensary’s inventory, staff, and customers. This includes surveillance systems, access control measures, and alarm systems. Regular security audits and updates are also important to address any vulnerabilities.

Dispensaries must comply with specific security requirements set by the state. This includes having secure storage for cannabis products, maintaining surveillance of the premises, and ensuring that access to cannabis is restricted to authorized personnel only. Best security practices also involve training staff on emergency procedures and maintaining a secure and safe environment for both employees and customers.

The safety of customers and employees is paramount in dispensary operations. This involves creating a safe physical environment, implementing emergency response protocols, and ensuring that staff are trained to handle various situations. Regular safety drills and safety procedure reviews help maintain a secure and welcoming atmosphere for everyone.

Conclusion

Starting a dispensary in Oklahoma offers a unique opportunity in a rapidly growing industry. The state’s open approach to medical marijuana has resulted in a flourishing market, but it requires strict compliance with state rules and careful planning. Successful dispensaries prioritize following the law and actively engage with their communities, contributing to a broader conversation about the responsible use of medical cannabis. Prospective dispensary owners should approach this business opportunity with enthusiasm, recognizing the potential for both business success and a positive impact on the well-being of patients in Oklahoma.

As Oklahoma continues to develop its cannabis program, we will keep you informed of any relevant news regarding the establishment of a dispensary in Oklahoma. By subscribing to our Oklahoma Cannabis Mailing List (Below), we will keep you informed of any relevant and not-so-easy-to-find information and news about Oklahoma Legalization. This includes, but is not limited to, the following:

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