Less than five years after the state legalized medical cannabis, Oklahomans will decide on March 7 if cannabis should be available to all adults. So far, the state’s lax approach to medical cannabis has turned it into a case study on cannabis regulation gone wrong. But the ballot initiative on adult use might have too much momentum—and money—behind it to be stopped.
In 2018, more than 56% of voters approved a measure to legalize cannabis for medical purposes. The initiative language was relatively sparse, to the point that it didn’t spell out any specific medical conditions patients needed in order to qualify for access. Unsurprisingly, Oklahomans have found recommendations easy to obtain, with nearly one in ten residents—more than 382,000—boasting one, as of February 2023.
The program also launched without a cap on the number of businesses that could enter the market. According to the Oklahoma Medical Marijuana Authority, close to 12,000 businesses have active licenses, including nearly 2,800 dispensaries. For comparison, the neighboring state of Colorado, which was the first state to legalize cannabis for adult use and has about two million more residents, has a quarter as many adult use shops.
Oklahoma also has a low barrier for entry for businesses, with licenses for growers, processors, and dispensaries costing a $2,500 application fee. Unlike other states, Oklahoma doesn’t charge a license fee. To the east in Arkansas, application and license fees to run medical cannabis dispensaries total $32,500.
Last year, lawmakers and regulators began to ramp up efforts to rein the industry in. In February 2022, the Legislative Office of Fiscal Transparency released a report that detailed the shortcomings of Oklahoma’s approach. It found, for example, that about 40% of processors and dispensaries hadn’t paid their taxes. And, it put a spotlight on concerns that lax regulations have fueled the illicit cannabis trade.
In the subsequent months, the state implemented a seed-to-sale tracking system, which, unlike most other states, wasn’t in place at the time the medical cannabis program launched. And, lawmakers passed two noteworthy bills: one to put a two-year moratorium on issuing licenses for growers, processors, and dispensaries, which went into effect on August 26, and another to make the Oklahoma Medical Marijuana Authority a stand-alone agency, separating it from the State Department of Health, and thus eliminating some of the administrative hurdles to enforcement and compliance efforts.
The Rocky Path for Cannabis Measure on Adult Use
It was during this time of evolution that a campaign to legalize cannabis for adults entered the mix. Like so much else related to cannabis in the state, the new initiative’s road to the ballot has not been smooth.
In the red state, not many elected officials are excited about legalization, including Governor Kevin Stitt. In an October gubernatorial debate, Stitt announced he opposes the adult use initiative. “It is still illegal federally,” Stitt said. “We should not have a checkerboard of jurisdiction across the states.”
When State Question 820 supporters began collecting signatures in early 2022, they hoped it would qualify for the midterm election in November. They even cut signature gathering one month short in an effort to have the measure ready.
But it hit a bump. Although the campaign submitted more than 164,000 signatures on July 5, the secretary of state’s office did not verify that the initiative qualified for the ballot until August 22. The office had used a private vendor for the count for the first time, which the Yes on 820 campaign criticized for taking exceptionally long. In court filings, the campaign said it took more than twice as long as the secretary of state’s hand count to approve the 2018 medical cannabis initiative.
In the end, the count verified that the SQ 820 campaign had collected more than 117,000 signatures, well above the threshold of 94,911.
The measure was not done with verification, though. It still had to go to the state Supreme Court, and once the justices had determined it met the requirements to qualify, that kicked off a ten-day period in which anyone could challenge the signature process. All the while, the campaign was working against an August 29 statutory deadline from the governor so that the state would have time to print and mail absentee ballots. Although it passed all the legal hurdles, justices said time had run out to place the initiative on the November ballot, where it would have been alongside high profile races like the gubernatorial election.
In October, Stitt set up a special election for SQ 820. Ryan Kiesel, senior advisor to the Yes on 820 campaign, says the election is unusual because their initiative is the only one on the ballot.
“From what we can tell, this will be the only time in state history that a stand-alone ballot question will be the only thing on a ballot,” Kiesel told Cannabis Wire. “It’s given us some challenges as a campaign that we probably wouldn’t have had in November of 2022. The turnout game is entirely up to us.”
Kiesel doesn’t think that Oklahoma’s track record on medical cannabis will hamstring SQ 820. He believes the wording of SQ 788 was “less than eloquent,” but says the legislature has stepped up to straighten out some of the mess.
“One of the real challenges was we were one of only one or two states that started a marijuana program that didn’t even have a seed-to-sale tracking system that was up and running on the first day,” Kiesel said. Up until May 2022, when the tracking system went online, he said, “the industry was just turning in monthly inventory reports without any verification to the Oklahoma Medical Marijuana Authority. And the state didn’t have really key critical data about how the program was working.”
Under SQ 820, if it passes, only medical cannabis businesses licensed prior to June 5, 2022 will be allowed to access adult use business licenses until the moratorium is lifted. License holders will be allowed to sell cannabis both for medical and adult use from the same space. Even with the moratorium in place, a large number of businesses will have access to licenses. According to the Oklahoma Medical Marijuana Authority, 11,499 growers, dispensaries, and processors had licenses on May 15, 2022.
The measure would also allow people with cannabis-related convictions to file a petition for resentencing and expungement.
The initiative has money on its side, in more ways than one.
According to research from Vicente LLP and the Oklahoma Cannabis Industry Association, the state is estimated to bring in $434 million in tax revenue from the sale of cannabis for adult use over the next five years. It estimates medical cannabis will bring in another $386 million over that time.
And Yes on 820 – Oklahomans for Sensible Marijuana Laws, the political action committee supporting the measure, has raised more than $3 million for the campaign. That includes more than $750,000 from the New Approach PAC, a Washington, D.C. based organization that has supported cannabis measures across the country. One PAC registered against the measure on January 31, Protect Our Kids No 820, but has yet to submit any financial information.
Even one of the co-founders of Oklahomans for Responsible Cannabis Action, an organization that sponsored competing state questions and challenged SQ 820 at the state Supreme Court, has come around. Kris Masterman offered his support for the initiative in late February.
“It is with a full heart that I endorse State Question 820 because I believe it will help Oklahoma businesses and promote criminal justice reform,” Masterman said in a statement. “This will save our state hundreds of millions of dollars in unnecessary arrests and incarceration, and it will also raise hundreds of millions of dollars in much needed tax revenue.”
(Jed Green, the director of Oklahomans for Responsible Cannabis Action, has criticized the Yes on 820 campaign and Masterman for this announcement, saying it doesn’t reflect the position of the organization as a whole.)
Meanwhile, the Oklahoma legislature is aiming to tweak the medical cannabis industry in many ways. There are about 50 bills related to the program in play this session, including potency caps and a bill that would overhaul the seed-to-sale tracking system that’s seen as crucial for curbing the state’s illicit market. The bill would open up a new bidding process to potentially select a new vendor to run the tracking system. Businesses in the state have run into problems with the current vendor, Metrc, since it was implemented last year.
If SQ 820 passes, the measure gives the Oklahoma Medical Marijuana Authority until September, or six months, to put rules in place.