Oklahoma adult-use cannabis vote could spur market expansion – or MMJ crackdown

Are the go-go days of Oklahoma’s medical marijuana industry over, or are Texans about to receive a grand invitation to cross the Red River and enjoy Sooner adult-use cannabis?

The answer might come as soon as Tuesday, when voters in the politically conservative state consider whether to become the 22nd market in the nation to legalize recreational marijuana.

The outcome is uncertain.

Despite reliably supporting Republican presidential candidates by double digits, Oklahoma has earned a reputation as the country’s most liberal MMJ market.

There are zero license caps, application and permit fees are low, and municipalities cannot ban commercial cannabis activity under the medical marijuana system approved by 56% of voters in June 2018.

For the existing medical cannabis industry, which recognizes that the market is saturated with both product and outlets to sell it, Tuesday’s vote to legalize adult-use marijuana in the state would mean immediate expansion.

The market would draw potential customers from nearby Texas, which has demonstrated strong demand for legal access. 

But if State Question 820 loses, industry insiders fear that conservative state lawmakers and officials, including Gov. Kevin Stitt, will use the setback as cover to end the state’s wide-open MMJ program.

The line from cannabis skeptics is that Oklahoma voters had no idea what they were in for when they approved medical cannabis, observed Joanna Hamrick, director of operations and sales at Enid-based cultivator Primal Cannabis and a board member of the Oklahoma Cannabis Industry Association (OCIA).

In this way, the adult-use legalization vote is also a referendum on cannabis in deeply conservative Oklahoma, she said.

“If 820 does not pass, I’m afraid that legislators and government officials will say that in fact, Oklahomans did not know what they were voting on, and they will create more restrictions,” she told MJBizDaily.

“If people don’t want the medical market to change, they really need to get out and vote.

“Otherwise, they’re just going to put the hammer down.”

The biggest

Industry statistics in Oklahoma still stagger credulity, especially versus the relatively restrictive situation in East Coast markets – think Connecticut and Florida – that have strict license caps and where municipalities can (and do) ban commercial cannabis activity.

According to the Oklahoma Medical Marijuana Authority (OMMA), almost 3,000 dispensaries and more than 7,000 growers are licensed in the state. And that reflects a recent decline.

Those businesses currently serve 369,468 patients, out of a population of fewer than 4 million people – by far the most dispensaries, grows and patients per capita of any MMJ market in the U.S.

Sales have slipped slightly since an early peak.

In 2022, the state collected $54.7 million in excise taxes and $70.6 million in state and local sales taxes.

Total sales exceeded $786 million that year, according to the OMMA.

If State Question 820 is approved Tuesday – in what observers say is the first time marijuana legalization has appeared on a ballot alone, with no other ballot propositions or candidates – nothing much would change immediately.

A two-year moratorium on new licenses imposed last August would still be in effect.

And State Question 820 imposes another two-year waiting period before newcomers to the adult-use industry would be considered.

That means existing licensees – who would be allowed to hold both an adult-use and a medical license simultaneously – would have the field to themselves in the short term.

The state’s low barrier to entry is one explanation for why small MMJ businesses – versus large multistate operators that prefer limited-license markets such as Florida – have dominated Oklahoma’s medical cannabis industry.

Taxes would also remain comparatively low.

Adult-use sales would be subject to a 15% state excise tax plus state and local sales taxes. The current excise tax on medical cannabis is 7%.

Ballot measure 820 also provides that:

• Individuals 21 and older would be allowed to possess up to 1 ounce of cannabis and cultivate no more than six plants.
• Public consumption would be legal where tobacco is legal.
• Smoking cannabis in an area where cigarettes are banned is punishable by no more than a $25 fine.

And there would be a process to expunge certain past, low-level cannabis offenses.

Since the Oklahoma border can be reached in less than two hours from the Dallas-Fort Worth metro area, industry players believe legalization would mean the launch of a border-town boom such as that in eastern New Mexico, where customers driving from West Texas are some of the most valued customers, the state Industry Association’s Hamrick observed.

After all, motorists in the DFW area regularly see billboard advertisements for Oklahoma casinos, Hamrick said.

“It would be no different,” she said. “They do it to gamble, they’ll do it for dispensaries as well.”

National interest

Oklahoma would also mean another legal state represented by deeply conservative lawmakers in Congress.

Michelle Tilley, campaign director for the Yes on 820 effort, did not respond to MJBizDaily requests for comment.

But national social justice organizations as well as cannabis advocacy groups are investing in Oklahoma, according to campaign finance records.

According to the most recent filings, which cover fundraising and spending only through the end of 2022, the Yes on 820 campaign reported raising more than $3.2 million.

Major contributions have come in from familiar national legalization and social justice organizations, including the New Approach Advocacy Fund ($750,319.95), the American Civil Liberties Union ($570,476), Drug Policy Action ($218,000.01) and labor union United Food and Commercial Workers ($30,000).

North Carolina-based social justice organization Just Trust For Action is the leading contributor, with $1.71 million. Just Trust did not respond to an MJBizDaily request for comment.

Friends in high places

By comparison, the opposition campaign has a lot less to work with, said Pat McFerron, a veteran Oklahoma City-based Republican political consultant who is leading the opposition effort, called Protect Our Kids No 820, according to filings.

He also worked on the campaign opposing Question 788, the successful 2018 MMJ ballot measure.

McFerron launched the opposition campaign just this year and has raised only $250,00 to date, he told MJBizDaily.

According to McFerron, the existing industry’s fears that a no vote Tuesday would mean a curtailment of existing MMJ businesses are well-founded.

“There is an element of our coalition that’s saying, ‘Fine, if we’re truly medical, if we defeat this, this gives the Legislature impetus to go in and clean up the medical situation we have.’

“If it passes, we have no impetus to do that,” he added. “Why bother?”

The opposition campaign does enjoy the endorsements of nearly the entire state political establishment, including the Oklahoma Farm Bureau and the Oklahoma Cattlemen’s Association as well as law enforcement lobbies, the state Chamber of Commerce and the state Republican party.

It’s also enjoyed some help from Stitt, the state’s Republican governor.

Stitt, who opposes the measure, was the target of significant out-of-state spending in November in a gubernatorial contest initially seen as a possible toss-up that he eventually won handily.

Following legal challenges, it was ultimately Stitt who pushed the legalization vote to a March special election with an executive proclamation – thereby doing himself a favor and doing legalization a disservice, observers contacted by MJBizDaily agree.

Had Question 820 appeared on the November ballot, increased turnout could have aided moderate and liberal down-ballot candidates such as Stitt’s Democratic challenger, moderate state schools superintendent Joy Hofmeister.

By kicking the question to a rarely seen March special election in an odd year, Stitt also ensured fewer voters will turn out for cannabis, said Michael Crespin, a professor of political science at the University of Oklahoma and the director of the school’s Carl Albert Congressional Research and Studies Center.

“It was a direct attempt: ‘Let’s make this the least likely to pass, and a time when it’s not going to hurt any other elections at the ballot,’” Crespin told MJBizDaily.

Uncertain before Tuesday

And that gambit might be working in Oklahoma, “one of the most conservative states on the country,” which nonetheless sports an unpredictable populist streak.

The Yes campaign has yet to release any public polling.

McFerron, the opposition campaign lead, told MJBizDaily that a limited poll of 500 people he conducted earlier in the year showed 46% in favor of adult use to 49% against, with the rest undecided.

“The rumor is, they have a poll that’s got them in the low 50s,” he said.

Also, some opposition is coming from the existing industry, OCIA’s Hamrick said.

“I feel like the industry is split on it, and I really don’t know where that split lies,” she said. “I don’t know if it’s 50-50, or 70-30.”

Ahead of Tuesday’s vote, “I’m feeling somewhat positive, but nervous,” she said.

“I don’t feel like it’ll be overwhelming, but I think we’ll win.”

If not, she added, “it would be huge setback. Huge.”

Source: https://mjbizdaily.com/oklahoma-adult-use-cannabis-vote-could-mean-expansion-or-mmj-crackdown/