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How to get a Medical Marijuana Grower License in Oklahoma

Oklahoma’s medical marijuana industry is booming, now bringing in excess of $1B in total sales since SQ788 passing in June of ‘18, with 9% of the population holding a medical marijuana card. More Oklahoma growers are becoming licensed daily to meet the state’s growing demand, with nearly 400 cultivation licenses added between December and January’s OMMA license report alone. The barrier for entry remains low for now and the growing market is still ripe for Oklahoma cannabis cultivators to find their niche and become “marijuana millionaires.”

“…anyone with a credit card and a dream can take a crack at it.”

-Paul Demko (Politico)

It gave us a chuckle, and while it’s essentially true, there’s obviously much more that goes into it. In this blog we’ll give you a basic outline of what you’’ll need to start and grow a 100% compliant cultivation business in Oklahoma.

Getting a License

Obtaining an Oklahoma growers license from the OMMA will allow your business to grow a currently uncapped amount of plants and sell to licensed processors and licensed dispensaries in Oklahoma. The license application fee is $2,500, and a separate license and application is needed for each grow facility — and license type.

Here’s what requirements you’ll need to meet to obtain an Oklahoma grow license as of this writing:

You must be 25+ years old

You’ll have to prove two years residency preceding the date of application or five continuous years of the last 25 years preceding the date of application, in order to establish that 75% of the owners are Oklahoma residents as required by SQ 788

All business applicants will be required to submit a Certificate of Compliance from the political subdivision that has jurisdiction where the business is located (usually a city or county). This means you need to have secured a property.

Each owner and officer must provide and pass a background check. If any owner or officer has a non-violent felony in the past 2 years or a violent felony in the past 5 years the application will be denied.

If your business is structured as an LLC, Corporation or Limited Partnership, you’ll need to provide proof of good standing from the Secretary of State.

Other things you’ll need

Oklahoma Tax Permit

Trade Name Documentation

Ownership Disclosure documentation

The timeline for OMMA review of business applications and renewals will be 90 business days. If an application is rejected for failure to provide required information, applicants will have 30 calendar days to submit the required information for reconsideration or the application will expire.

-Oklahoma Medical Marijuana Authority

Once approved, your license will come in the form of a licensed certificate and you must remain in compliance with Title 63 O.S. § 420et seq. and the Oklahoma Administrative Code (OAC) 310:681.

You’ll also need to register with the OBNDD after receiving your license from OMMA. See 63 O.S. §§ 2-101 & 2-302. This is required by law before any medical marijuana or medical marijuana products can be present at the business. See OAC 475:10-1-9(a).

How we can help

At Gies Law Firm we know where all the sticky places in the process of starting and scaling a canna-business usually come up. We’ll help you understand the legal landscape with clarity and confidence, take care of the tedious and make your license approval process smooth and stress free. We provide end-to-end services to help you start and maintain a successful, fully compliant medical cannabis business in the state of Oklahoma.

We can help with:

Forming and structuring your business

Operating agreements & contract negotiation

Background checks & expungement

OMMA licensing & OBNDD registration

Continued compliance assurance

And everything that comes up along the way.

Getting a license is really just the beginning of an ongoing process of keeping up with the natural shifts of an emergent industry. Having a legal team that knows cannabis law and corporate law and understands acutely the complexity that arises from competing, ever-changing state and federal law is a tremendous asset in this venture.

At Gies Law Firm, we are that team. Our industry embedded lawyers will guide you through each step of the process and beyond. We can help you break into the Oklahoma medical marijuana market and grow a successful business.

Where can oklahoma growers get marijuana seeds legally

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The rapid growth of Oklahoma’s medical marijuana industry has created serious waste management challenges for lawmakers and licensed businesses.

When State Question 788 passed in June 2018 with 56.86% voter approval, Oklahoma became the 30 th state to allow for the sale of medical marijuana to state-registered patients. 1 By February 2021, there were 2,550 licensed caregivers, 367,053 licensed patients and 9,987 total active licensed medical marijuana businesses in the state. 2 Among the licensed businesses, there are 6,546 growers, 1,262 processers, 2,057 dispensaries, 69 transporters and 23 laboratories. 3 However, there were only nine active waste disposal businesses in operation in the state of Oklahoma. 4 The difficulty of procuring waste disposal licenses and continued limited number of waste disposal licensees has proven problematic for the 9,978 other presently licensed Oklahoma medical marijuana businesses and puts them at an increased risk of noncompliance and potential revocation of their commercial license.

In 2019, the Oklahoma Legislature passed the Oklahoma Medical Marijuana Waste Management Act (act). 5 The act required commercial cannabis businesses to dispose of medical marijuana waste through a state-licensed waste facility and imposed a number of other requirements for medical marijuana waste disposal, 6 including a limit of 10 waste disposal licenses in the first year after the act’s passage. Since the act went into effect in late 2019, there have been no new waste disposal licenses issued, and the significant gap between the number of licensed businesses and waste disposal licensees continues to be a problem. The act does not include a cap on medical marijuana commercial licensing or any provisions that address the environmental implications of cannabis-related waste experienced in previously legalized states. 2

RELEVANT AUTHORITIES & DEFINITIONS

The Oklahoma Medical Marijuana Authority (OMMA) was established under the Oklahoma Department of Health (OSDH) and oversees Oklahoma’s medical marijuana program. 7 Under the act, “medical marijuana waste” is defined as the “unused, surplus, returned or out-of-date marijuana and debris from the plants of the genus Cannabis, including dead plants and all unused plant parts, except the term shall not include roots, stems, stalks and fan leaves.” 8 Thus, cannabis businesses in the state of Oklahoma may only dispose of roots, stems, stalks and fan leaves through a state-licensed waste disposal facility. 9 Pursuant to the act’s definitions, “disposal” means “the final disposition of medical marijuana waste by either a process which renders the waste unusable through physical destruction or a recycling process.” 10 However, there are no definitions or guidelines for which parts may be recycled or the requirements for an authorized recycling process.

Before the act was passed in 2019, regulations from the OMMA included an expanded definition of “medical marijuana waste” to include any wastewater generated during growing and processing. 11 This language proved problematic because it required licensed growers and processors to dispose of their medical marijuana wastewater through a state-licensed waste disposal facility. Yet, there were no licensed facilities for wastewater disposal. The OMMA amended the regulatory definition of “medical marijuana waste” after the act was passed in 2019 to remove wastewater from the definition and the statutory and regulatory definitions are now the same.

WASTE DISPOSAL LICENSING & PERMITTING

To obtain a medical marijuana waste disposal license in the state of Oklahoma, OMMA requires an applicant to first obtain a permit or license from the Oklahoma Department of Environmental Quality (DEQ). Initially, communication between DEQ and OMMA appeared to be nonexistent, as the OMMA provided for waste disposal licenses long before the DEQ even knew what permits or licenses were to be issued from their own agency.

The DEQ has several internal divisions relevant to waste disposal – air, land and water quality. Depending on the type of disposal, the DEQ requires certifications, allowances and other necessary documentation required by the Environmental Protection Agency (EPA), the federal agency responsible for creating standards and laws promoting the health of individuals and the environment, in order to issue a DEQ permit or license. 12 The cost of obtaining an EPA and/or DEQ permit or license varies and is by no means cheap. Once a DEQ permit or license (and other necessary documentation) is secured, the OMMA application can be submitted for approval. The cost for the application is $5,000 and is not refundable, even if the application is not approved.

There are four types of waste disposal licensing available under OMMA regulations: 1) Compost, 2) Landfill/Solid Waste, 3) Incinerator and 4) Other. Under the act, unless restricted by local ordinance, waste disposal licensees are authorized to destroy medical marijuana waste by open burning, incineration, burying, mulching, composting or any other technique approved by the DEQ. 13 If or when an OMMA application is approved, OMMA has the full authority to audit and oversee compliance of all cannabis companies operating in the state. Additionally, as with the approval of any other commercial OMMA license, a transportation license is provided to the waste disposal licensee so they may legally transport medical marijuana. All persons who transport medical marijuana on behalf of the disposal company must register as a transport agent under the company’s OMMA license or risk noncompliance and legal ramifications.

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It is important to note the difference between waste disposal facility licenses and waste disposal facility permits. 14 In order to obtain an OMMA waste disposal permit ($500), one must first obtain an OMMA waste disposal license ($5,000). The permit only becomes necessary once the waste disposal licensee chooses to expand into additional locations – an option solely available to waste disposal licensee – and is required for each additional, approved facility of a waste disposal facility licensee. 15

DISPOSAL PROCESSES

Every cannabis business operating in Oklahoma needs or will have a need for waste disposal during operations. For example, growers and processors who have samples that fail product testing requirements (that cannot be legally remediated) must dispose of the remaining batch or lot of product through a waste disposal licensee. 16 After testing product samples, OMMA laboratories must dispose of tested samples through a waste disposal licensee. 17 Dispensaries with broken or contaminated products must either return such product to the company that sold the product or dispose of the faulty product itself through a waste disposal licensee. 18 In any situation, the transfer of waste to a waste disposal licensee must be documented in the manifest of each medical marijuana business licensee. 19

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Disposal processes will differ depending on the type of waste and waste disposal company. Incineration disposal is a much different disposal process than composting. A waste disposal company may first choose to perform a site evaluation for their client in order to form a waste management plan, as plans may differ for growers, processors, laboratories and dispensaries. Waste disposal companies often provide clients with storage containers to allow for easier accumulation and pick-up of client waste (typically trash cans that can be locked), but waste disposal companies are not required to provide storage containers to clients. Once ready for removal and disposal, the waste will be either picked up by the waste disposal company and transported back to their facility, or a client may transport and drop off their waste at the waste disposal facility themselves. The OMMA requires that all transportation and changing hands of products be recorded in each licensee’s manifests, which are to be reported to OMMA by the 15 th of each month. 20 Typically, waste disposal companies either charge clients by the pound (or similar units of weight) or by the number of storage containers.

CANNABIS WASTE DISPOSAL ISSUES

One issue with Oklahoma’s implementation of the requirement of waste disposal through licensees is practicality. With only nine present waste licensees and nearly 10,000 active commercial licenses, rural cannabis businesses may not have a viable option for proper waste disposal. Further, the additional costs associated with waste disposal may act as a deterrent for small or failing businesses to remain compliant with waste disposal requirements.

Another concern with waste disposal compliance is proper record keeping. Commercial licensees, medical marijuana research facilities and medical marijuana education facilities that dispose of medical marijuana waste are required to document their waste on a form provided by the OMMA. 21 The information to be recorded includes precise weights or counts of medical marijuana waste and the manner in which the medical marijuana waste is disposed. 22 Documentation must also include a sworn affidavit under penalty of perjury attesting to the lawful disposal of the medical marijuana waste. 23 All disposal records have to be maintained by commercial licensees for five years and are subject to inspection and auditing by the OMMA. 24

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ENVIRONMENTAL CONCERNS

There are environmental concerns stemming from cannabis waste that have been identified in previously legalized states that Oklahoma’s Legislature and agencies have not yet adequately addressed in the state’s medical marijuana laws and regulations. Among these issues are the environmental impact of the high volume of plant and packaging waste on landfills and lack of laws and regulations that encourage recycling or repurposing of cannabis waste. For example, when a patient purchases a vapor cartridge containing medical marijuana concentrate, the cartridge is typically packaged in a plastic, opaque, child-resistant container that meets the state’s strict packaging guidelines. Once the cartridge has been consumed, the patient is left with an empty, metal and plastic cartridge “skeleton,” which ends up being trashed. Because there are not currently any programs in place to encourage or require recycling or repurposing, the packaging ends up in landfills.

One solution to the potentially environmentally toxic abundance of cannabis plant waste may be in cannabis itself, or rather, hemp. Hemp is cannabis that tests at or under 0.3% delta-9 THC. 25 In other words, if one were to smoke hemp as is, they would not get “high.” Hemp was legalized at the federal level with the passage of the Farm Bill in December 2018. 26 More packaging companies are utilizing hemp biomass to create environmentally friendly cannabis packaging, which allows for quicker deterioration than plastic-based packaging, and hemp cellulose can be extracted and used to make cellophane, rayon, celluloid and a range of plastics. 27 Further, hemp can be used to create a variety of products for an array of industries, including rope, textiles, clothing, food, paper, bioplastics, insulation and biofuel. 28 The cost associated with hemp packaging is, on average, higher than its plastic-based competitors, which may not be cost-effective for small companies, but hemp packaging costs are becoming more and more competitive with plastic-derived materials. 29 Oklahoma’s medical marijuana laws and regulations should be developed to encourage Oklahoma waste disposal licensees to repurpose any usable biomass and waste into hemp-like materials for packaging or other industrial and commercial uses. In addition to alleviating the cannabis industry’s environmental impact by decreasing pollution, recycling and reusing waste when possible could eventually increase profits for licensed businesses.

CONCLUSION

Medical marijuana waste disposal rules and regulations remain unclear, if not unknown, to most. Even medical marijuana business owners who have sought advice from legal counsel or have done their own legitimate research on waste are at risk of noncompliance. Clear and consistent laws and regulations, as well as improved coordination between agencies, are needed to address the conflicting standards, increase the number of licensed waste disposal facilities and account for the environmental implications of waste generated by the cannabis industry.

ABOUT THE AUTHOR

Rachel Klubeck is co-founder of Smith & Klubeck PLLC based in Oklahoma City. Her practice consists of cannabis law and litigation. She grew up in Norman and received her J.D. from the OU College of Law in 2018. She is a recipient of Oklahoma’s NextGen Under 30 award.

  1. Ballotpedia, ballotpedia.org/Oklahoma_State_Question_788,_Medical_Marijuana_Legalization_Initiative_(June_2018)#cite_note-3 (last visited Jan. 14, 2021).
  2. Okla. Medical Marijuana Authority, www.omma.ok.gov (last visited Feb. 3, 2021).
  3. Id.
  4. Id.
  5. SB 882 was passed by the Senate on May 2, 2019, and was signed by Gov. Kevin Stitt on May 19, 2019.
  6. 63 O.S. §§427a – 430 (2019).
  7. Okla. Admin. Code § 310:681-1-2.
  8. Id.
  9. Id.
  10. 63 O.S. §428.
  11. Okla. Admin. Code §310:681-1-4 (2018).
  12. Environmental Protection Agency, www.epa.gov (last visited Jan. 13, 2021).
  13. 63 O.S. §§427a – 430 (2019).
  14. Okla. Admin. Code §310:681-1-1-4 (2020).
  15. Id.
  16. Okla. Admin. Code §310:681-8-1.
  17. Okla. Admin. Code §310:681-8-3.
  18. Okla. Admin. Code §310:681-5-10.
  19. Okla. Admin. Code §310: 681-4-5.
  20. Okla. Admin. Code §310:681-5-6.
  21. Id.
  22. 63 O.S. §429(C) (2019).
  23. Id.
  24. Id.
  25. 2 O.S. §3-402 (2019).
  26. Agriculture Improvement Act of 2018, H.R. 2, 155th Cong. (2018).
  27. Sensi Seeds, Hemp Plastic: What Is It & How Is It Made?, sensiseeds.com/en/blog/hemp-plastic-what-is-it-and-how-is-it-made (last visited Jan. 12, 2021).
  28. Nicole M. Keller, The Legalization of Industrial Hemp and What it Could Mean for Indiana’s Biofuel Industry (2019), mckinneylaw.iu.edu/iiclr/pdf/vol23p555.pdf (last visited Jan. 14, 2021).
  29. Laura Drotleff, “Cannabis-based packaging and paper could reduce waste, promote sustainability,” Marijuana Business Daily (2020), mjbizdaily.com/green-packaging/ (last visited Jan. 14, 2021).

Originally published in the Oklahoma Bar Journal – OBJ 92 Vol 3 (March 2021)