Oklahoma's Cannabis Industry Is Booming & Authorities Are Cracking Down

We are in a green awakening where even the most conservative states embrace the benefits of cannabis — largely economically. The tax revenue coming from cannabis sales across the country has generated hundreds of millions of dollars, even though it’s costing some cannabis operators more than others, depending on the state.

Oklahoma’s surprisingly booming cannabis market is primarily due to the free-market approach. Cannabis sales are strictly for patients with medical cards, which amount to roughly 10% of the state’s population. It’s significantly more extensive than any other state with medical marijuana programs, but it speaks to Oklahoma’s fairly laidback laws. The state bears no restrictions on issuing licenses, and legalization for recreational use hasn’t passed. 

Per the New York Times, this has led to an influx of out-of-towners settling in Oklahoma due to low license and operating costs. For example, it takes roughly $2,500 to get started in Oklahoma’s cannabis industry — barely a fraction of the $100,000 or more in the neighboring state of Arkansas. Plus, anyone can launch a dispensary for cannabis sales and own a limitless amount of cannabis farms with endless crops.

As you’d expect, this led to a saturated market of growers in the medical marijuana industry. Dispensaries are popping up practically everywhere, with more retail stores than Washington, Colorado, and Oregon combined. There are reportedly more medical dispensaries in Oklahoma than there are food stores. Prices for premium cannabis strains, like OG Kush and Maui Waui, sell for $3 a gram – significantly lower than retail prices in other states.

Additionally, Oklahoma also has more licensed cannabis farms (nearly 9,000) than any other state, including California — a state with a population 10x the size of Oklahoma. However, the newcomers face pushback from veteran farmers, ranchers, sheriffs, and others calling for a moratorium on new licenses. The request for a suspension is mainly due to the rising prices for land, electricity, and water, which reach the hundreds of thousands of gallons at indoor cultivations, as a few of the reasons to hold off on issuing new licenses. Unfortunately, the chances of that happening are slim, according to the director of Oklahoma Medical Marijuana Authority, Adria Berry, who explained that the state saw roughly $138M in sales and local and state taxes throughout 2020 until November. While Berry does embrace the cannabis industry, she added that the state’s cannabis laws prevent the OMMA from putting a cap on license approvals.

The significantly lower land, growing, and labor costs have left a massive profit margin for growers. According to Oklahoma Bureau of Narcotics rep Mark Woodward, it could cost as low as $100 to grow one pound of cannabis which can sell for $3,500 to $4,000 a pound in states like California or New York, despite the potential violation of state and federal laws. The influx of cannabis-related businesses across Oklahoma has produced more cannabis that can be sold in medical dispensaries, which in turn is fueling the underground market. “The profit margin is astronomical if you can move your operation to Oklahoma and get away with it,” said Mr. Woodward.

The illicit market is where the concern is genuinely bubbling up throughout Oklahoma. A massive crackdown has taken place across the state since April. Nearly 80 farms have shut down to reduce sales in the illicit market. In one instance in Haskell County, police conducted a raid. They seized 10,000 cannabis plants, 100 lbs. of cannabis products, firearms, and cash from a cannabis operation that moved from Colorado to Oklahoma.

The illicit activity running adjacent to the medical marijuana programs in Oklahoma led to more law enforcement funding in 2021. Republican Senator James Inhofe already asked the federal government for $4M to help the Oklahoma Bureau of Narcotics crackdown on illegal cannabis farms. This year, the introduction of an additional bill put the power in county and city authorities to enforce license caps in their areas. On top of that, revenue from cannabis licensing in Oklahoma helped launch a new full-time enforcement unit, and the states’ narcotic bureau hired 20 new agents. The Oklahoma Medical Marijuana Authority also has permission to bring on 70 more employees, mainly for compliance, like regulated weed bags and enforcement.

The number of cannabis farms across Oklahoma led to a decline in cannabis prices by at least half. In some markets, pounds that were once going for $1600 are down to $800. However, some growers, like Tara Tischauer, Red Dirt Sungrowth’s co-owner, explained how the state’s market is still in its early stages. If finally legalized for recreational purposes, Tischauer explained how it could position growers in Oklahoma to supply to other states, like Texas.