medical marijuana business

Governor approves OSDH’s revised medical marijuana regulations

| August 8, 2018

By Elizabeth L. Dalton

After the passage of State Question 788 (authorizing the production, sale, and use of medical marijuana), the Oklahoma State Department of Health (OSDH) adopted regulations that drew two lawsuits and a letter from the Oklahoma Attorney General advising the OSDH that it overstepped its authority with the rulemaking. Consequently, on August 1, 2018, the OSDH adopted a new set of regulations that have been signed by the Oklahoma Governor. As a result, the process for obtaining commercial licenses for medical marijuana is greatly reduced and generally adheres to the requirements in the statute.

The following outline summarizes aspects of the law and final regulations affecting those seeking commercial licenses for dispensaries, growers, and processors. Marijuana remains illegal under federal law, and there remain legal risks for those engaged in the business even though they may be operating in compliance with Oklahoma law.

General

All commercial licensees must be Oklahoma residents with no more than 25% of their equity held by non-Oklahoma residents. Within 30 days prior to applying for a commercial license, all individual applicants and owners of entity applicants must undergo an Oklahoma state criminal history background check. Applications must include a list of all persons that have an ownership interest; proof of Oklahoma residency of the applicant (including a good standing certificate issued by the Oklahoma Secretary of State, if applicable) and all members, managers, board members, and holders of 75% of the ownership interests; and an Affidavit of Lawful Presence for each owner. The applicant must include a pledge not to divert marijuana to any individual or entity that is not lawfully entitled to possess marijuana.

Applications must identify the physical address and GPS coordinates of the proposed commercial establishment, along with the phone number and, if available, email address. Applications by entities must include an attestation that the commercial entity will not be located on tribal lands (although by law, no individuals may operate a commercial license on tribal lands, either). Applicants must provide the name, residence address, and date of birth for themselves and each owner, member, manager, and board member, if applicable.

A marijuana transportation license will automatically be issued to qualifying applicants for a commercial license at the time of approval. A transportation license enables the holder to transport marijuana to and from Oklahoma commercial licensees. The product must be clearly properly labeled and shielded from public view.

Commercial licensees are responsible for implementing inventory management systems and completing monthly reports on prescribed forms. Records must be maintained for seven years. Each licensee must maintain an electronic inventory management system that performs specified functions. It must also comply with applicable Oklahoma statutes and regulations relating to food safety and drugs and devices.

Commercial licensees are required to implement appropriate security measures to deter and prevent the unauthorized entrance into areas containing marijuana, theft, and diversion. They are responsible for the security of all marijuana items on the licensed premises and all marijuana items in their possession during transit. Commercial establishments must meet applicable electrical, fire, plumbing, waste, and building codes.

Labels and packaging may not be attractive to minors. Packages must be child-resistant and include a label that reads: “Keep out of reach of children.” Additionally, labels must contain a warning that states: “Women should not use marijuana or medical marijuana products during pregnancy because of the risk of birth defects.”

No minors may enter commercial establishments unless the minor is a patient license holder accompanied by his or her parent or legal guardian. Only licensees and parents or legal guardians of licensed minors, if applicable, may enter dispensaries. [Note that there is no regulatory authorization for caregivers of patient licensees to enter dispensaries.]

Employees must be at least 18 years old. Dispensaries may not deliver products to patients or caregivers. False advertising is prohibited, as is advertising that would reasonably be expected to induce minors to purchase or consume marijuana or medical marijuana products. Commercial establishments may not manufacture, process, or offer for sale or consumption any products intended to be attractive to children or minors.

Submission of an application for a processing license constitutes permission for entry to and inspection of the premises by the OSDH, and refusal to permit entry is cause for nonrenewal, suspension, or revocation of a license. OSDH may perform an annual unannounced on-site inspection of a processor’s operations, as well as inspections upon receipt of a complaint.

No commercial establishment may allow the consumption of alcohol, medical marijuana or medical marijuana products on the premises. No commercial establishment, other than dispensaries, may sell any marijuana seedlings or mature plants.

There are currently no limits on the number of licenses that may issue or the number of plants a licensee possess. Dispensaries must be at least 1,000 feet from a private or public school. Upon obtaining a commercial license, the licensee must register with the Oklahoma Bureau of Narcotics and Dangerous Drugs.

Applications

Applications will be available on the OSDH website by August 25, and OSDH will begin accepting them on August 25. The filing fee for each commercial license is $2,500, and it is nonrefundable. The OSDH must process complete applications within two weeks.

For more help

If you have any questions about commercial medical marijuana licenses in Oklahoma or would like assistance in reviewing or evaluating your application, please do not hesitate to contact Elizabeth Dalton at (405) 552-2217 or elizabeth.dalton@mcafeetaft.com.