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Oklahoma Leads The Nation In Cannabis Dispensaries

2/12/2020

Comments

 
  Last night, OMMA Director, Travis Kirkpatrick, told a town hall meeting in Tulsa that about 1600 of the more than 2000 dispensary licenses issued, are actually showing signs of commerce in their monthly filings with the state.
  This leads a market analyst to compare how Oklahoma compares to several of the other 32 'sanctuary states' allowing medical cannabis distribution. 
  Much of the Oklahoma model is unprecedented and has garnered us as the "Wild West of Cannabis'.  Oklahoma has no quotas or caps on state licensing.  While some of the members of the State Board of Health signaled ambitions to use a bidding system, caps on license awarding, and county set-asides, The states' Attorney General slapped them a strong advisement that they lack any constitutional authority to any such actions.
  Much of the reason for Oklahoma's more libertarian model is because of our state's founders regard for citizen empowerment to go around the legislature & governor, to create laws via direct democracy. The Initiative petition has been the bane of many lawmakers who would rather concentrate power to their own committees. Some believe campaign contributions are another motivation. Lobby groups fund much of our state's legislative race funding.
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Oklahoma has about as many dispensaries as the entire west coast.

Can all the dispensaries survive?

 Industry consultants and legislative leaders told a January forum that many dispensary closures are expected in the next 2 months as IRS confiscations take effect.
  The IRS has an infamous 'Rule 280' which says that cannabis businesses are all regarded as illegal cartels and cannot deduct any costs of operating, when filing federal income taxes.
  The IRS rules are a bit less onerous to growers, so vertically integrated MMBs are capable of cost-shifting their operations so that while they may not look like they're making any money on the retail end, their cultivation division is able to make up for the lack and keep them afloat.
  Most of the other 31 states legalized medical marijuana via their legislative process. This allows the lawmakers to carve out markets for select constituents to get an inside track in the process of getting awarded one of the few state franchises.
  These rationed franchises are a form of protectionism and graft which harms consumers and stunts innovation, healthy competition, and access to medicine at truly market prices.
  Another feature of Oklahoma's MMJ policy is tax policy.  There are 2 unique developments. 
  1. Because plain-spoken language was used by private individuals who wrote the language of SQ788, certain code words of bureaucratic culture were not identified. While voters thought they were voting for a 7% sales tax on the medicine, the State Tax Commission found wiggle room to say that the authors meant to apply a special excise tax to the sales. And while almost all items with an excise tax are expressly exempted from a sales tax, that language was not stated in the 'peoples law', it got hit with both! Hence, this medicine has an effective 16% purchase tax, while any other restricted medicine is exempted from any tax, due to it being a lifesaving medication.
  2. Other states which passed medical marijuana are more likely to have leftist legislatures. The pressures to feed their 'beast' of burgeoning social spending has led to a need to hike taxes on anything that they can. Hence, Colorado, California, and other 'left coast' states have taxes in excess of 20%.
Comments
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    Nigel O'Mally

    Nigel heavily focuses on the medical research and drug policy topics at SoonerPolitics, from an international perspective &  a background in homeopathic herbs and agrarian culture.

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