| The Oklahoma Dept. of Health reports that about 800 new business license applications were submitted over the weekend. This includes growers, processors, and dispensaries of medical marijuana. Interim state Health Dept. Director, Tom Bates; expects that number to increase by another 150% over the first year of implementation of Oklah0ma's medical marijuana statutes. The Black Market Squeeze To get the full perspective of marijuana commerce, it's important to comprehend the massive current black market (illegal commerce). According to the Federal govt. data, there is a black market marijuana dealer for every 2549 individuals in the USA. That means 1459 black market commercial operations have been in place in Oklahoma, and have been avoiding any tax liability and have been uncooperative with govt. agencies, especially law enforcement. ++ |  In the next few weeks there will be many grand openings and re-openings of businesses (like this Nevada retailer), devoted to providing cannabis medicines to Oklahomans. |
The goal of all the licensed businesses and the state agencies, is that black market commerce will disappear. Our state agencies now have about 1000 allies in this effort, as taxpaying and law-abiding businesses now have a financial incentive to rid the communities of black market operations. This is essentially like having 1000 self-motivated professional informants. For several Oklahomans who support the SQ788 initiative, a significant motivation is "to rid the state of a significant black market which avoids paying their share of sales & income taxes". Also, these people often collect public assistance in the form of SNAP (food stamps) and SoonerCare (medicaid), since they claim no actual income.
Rep. Scott Fetgatter is one legislator who supports an orderly means of helping patients, but did not initially support SQ788. We spoke with Rep Scott Fetgatter, a member of the Bicameral Interim study on SQ788's implementation. He expects a bill to be announced very soon by the co-chairmen of the group. Among the issues of concern to Fetgatter is the likelihood of an initial glut of product in the next year or so. He agrees that the market will level off, but his concern is that growers will divert their surplus product to black market dealers. Fetgatter's concern is concurred by most others who have studied what other states have experienced.
Part of the consensus legislation being proposed by the marijuana trade groups is what's called "Seed To Sale" tracking of product. This means that records are mandated for every plant and pound of product. That increment is followed all the way to the consumer's signature of receipt. The Oklahoma Medical Marijuana Authority (OMMA) will be tasked with auditing licensed businesses and confirming records. Businesses failing to account for their product will face civil fines and potential loss of license to conduct business. Criminal fraud charges may also apply.
What patients and other advocates strongly oppose is the rationing of licenses. In several of the 30 other 'medical marijuana' states are struggling with is the practice of government to 'pick winners & losers'. When a more valid and worthy application is denied, the proprietors have been successfully winning in court and delaying the roll out of the policy. Arkansas, Ohio, Florida, and other states are harming the patients by creating an obstruction to implementation. There are also indications of potential corruption and 'under the table' deals between well-connected entities and influential govt. leaders.
Part of the consensus legislation being proposed by the marijuana trade groups is what's called "Seed To Sale" tracking of product. This means that records are mandated for every plant and pound of product. That increment is followed all the way to the consumer's signature of receipt. The Oklahoma Medical Marijuana Authority (OMMA) will be tasked with auditing licensed businesses and confirming records. Businesses failing to account for their product will face civil fines and potential loss of license to conduct business. Criminal fraud charges may also apply.
What patients and other advocates strongly oppose is the rationing of licenses. In several of the 30 other 'medical marijuana' states are struggling with is the practice of government to 'pick winners & losers'. When a more valid and worthy application is denied, the proprietors have been successfully winning in court and delaying the roll out of the policy. Arkansas, Ohio, Florida, and other states are harming the patients by creating an obstruction to implementation. There are also indications of potential corruption and 'under the table' deals between well-connected entities and influential govt. leaders.
Don't Ask - Don't Tell
Seedlings like these may be at licensed dispensaries in a few weeks. Interim Health Dept. Commissioner Bates also told legislative leaders that his department estimates 78,000 Oklahoma patients to submit requests for patient licenses, in the first year. Many (perhaps most) of them will initially grow their own plants. Dispensary prices are expected to be very high for the first 9 months. This is because all products must be grown in Oklahoma and plants must not exist before Sept. 7th.
Dispensaries will open next month, but will resemble retail nurseries. They will be able to sell seedlings to patients for home growing. No one has said where the seeds will come from and evidently the state really doesn't want to know. It seems that mail order shipments or trips through the Oklahoma panhandle will serve to bring the initial seeds into the state. Yes, the plants are actually growing in remote & black market operations all over the state. But the official narrative will be that seeds were magically appearing from unknown sources and growers simply put them in soil. this applies to commercial growers and licensed patients.
Many of the dispensary license applicants are current CBD shops. This means they sell Cannabis Oil with trace levels of THC(the psychoactive element of marijuana). CBD is legal in all states, but just 6 years ago it would land an Oklahoman in jail with up to a 5 year prison sentence.
Despite looking like nursery growers, the dispensaries will not be the creators of the plants. They will buy them from state licensed growers as seedlings and will simply be keeping them healthy while they sit on the retail shelves.
Many applicants for growing operations are also applying for dispensary operations. This is smart business and guarantees the grower of a retail way to get their product to the patient. But the two operations will require meticulous paperwork and must have a 'wall' between the two enterprises. Especially if the 'seed to sale' legislation is enacted by law.
Dispensaries will open next month, but will resemble retail nurseries. They will be able to sell seedlings to patients for home growing. No one has said where the seeds will come from and evidently the state really doesn't want to know. It seems that mail order shipments or trips through the Oklahoma panhandle will serve to bring the initial seeds into the state. Yes, the plants are actually growing in remote & black market operations all over the state. But the official narrative will be that seeds were magically appearing from unknown sources and growers simply put them in soil. this applies to commercial growers and licensed patients.
Many of the dispensary license applicants are current CBD shops. This means they sell Cannabis Oil with trace levels of THC(the psychoactive element of marijuana). CBD is legal in all states, but just 6 years ago it would land an Oklahoman in jail with up to a 5 year prison sentence.
Despite looking like nursery growers, the dispensaries will not be the creators of the plants. They will buy them from state licensed growers as seedlings and will simply be keeping them healthy while they sit on the retail shelves.
Many applicants for growing operations are also applying for dispensary operations. This is smart business and guarantees the grower of a retail way to get their product to the patient. But the two operations will require meticulous paperwork and must have a 'wall' between the two enterprises. Especially if the 'seed to sale' legislation is enacted by law.
Why October 26th Is A Big Day
Six weeks after the live plants are first legal in Oklahoma, Mature 'flowering plants will be legal. This means that the THC levels will actually be naturally condensed in the flowering portion of the plant. Only some strains of Marijuana reach maturity in this short timeframe. But on October 26th it is technically possible for the flower to be dried and sold as therapeutic product for human consumption.
The products available after October 26th are likely to be comparatively low in quality and very high in price. But in December there will be a first wave of product in quantities which are capable of bringing the price down to a more reasonable price.
So in late 2018 there may be a concern (or suspicion) of illegitimate redirect of black market product into the legitimate dispensaries. But in later 2019, there will possibly be the opposite dynamic. There may be an over-abundance of legitimate wholesale product getting dumped into the black market. This isn't a result of the product being perishable. Most Cannabis medicines have an excellent shelf life when properly cured (dried), or processed into oils, pills, and other ingestible forms.
The products available after October 26th are likely to be comparatively low in quality and very high in price. But in December there will be a first wave of product in quantities which are capable of bringing the price down to a more reasonable price.
So in late 2018 there may be a concern (or suspicion) of illegitimate redirect of black market product into the legitimate dispensaries. But in later 2019, there will possibly be the opposite dynamic. There may be an over-abundance of legitimate wholesale product getting dumped into the black market. This isn't a result of the product being perishable. Most Cannabis medicines have an excellent shelf life when properly cured (dried), or processed into oils, pills, and other ingestible forms.
++The news website, FiveThirtyEight.com served as an essential source of information for determining the scope of the black market. Their formula rationale is published here ( https://goo.gl/6KJBPB ).
