Medical marijuana licensing, revenue exceed first-year expectations
Before Oklahoma voters passed State Question 788 with 57% approval, opponents used visual aids to demonstrate how much marijuana a person could possess under SQ 788. SUE OGROCKI/ASSOCIATED PRESS
OKLAHOMA CITY – It is probably not a mischaracterization to say medical marijuana has “taken off” in Oklahoma.
When medicinal cannabis was legalized, a number of state lawmakers predicted a bumpy trail for the first year, and that it might take several years of trial and error to fashion a polished regulatory regimen.
Eighteen months into legality, medical marijuana has exceeded all expectations in terms of revenue and availability. Around 8% of adult Oklahomans have a medical marijuana card. There are more than 2,200 licensed dispensaries – one for every 1,786 residents, or more significantly, 1 for every 100 or so medicinal cannabis card carriers. Oklahoma dispensaries may only sell to those carrying valid state-issued cards.
The Oklahoma Bureau of Narcotics and Dangerous Drugs reported in October that of the 4,757 licenses issued to cultivate, process or dispense medical marijuana, 770 were not renewed.
“I think we’re already starting to see a saturation of the market,” said State Sen. Dewayne Pemberton, R-Muskogee.
New Frontier Data, which offers analysis of the U.S. marijuana industry, rated Oklahoma the second-most saturated market behind only New Mexico in mid-2019. NFD cited an attribution from the Oklahoma Medical Marijuana Authority of “strong patient participation (due) to minimal financial obstacles and a lack of restrictions on qualifying conditions.” NFD also noted that Oklahoma’s high density had occurred only 11 months after legalization, whereas the saturation had occurred over time in New Mexico, which lists more than two dozen qualifying conditions. Oklahoma lists no qualifiers, leaving the decision to prescribe up to doctors.
But perhaps most important from the state’s perspective: The Oklahoma Tax Commission reported $345 million in medicinal marijuana sales during 2019, with tax revenue to the state of $55 million.
Medicinal cannabis consumers pay a 7% excise tax, along with all applicable state, county and municipal sales taxes. The state uses revenue to fund the OMMA, which also receives revenue from the licensing of production, use and retail of marijuana. Any spillover is divided, with 75% going to the general revenue fund for education, and the remainder to the Oklahoma State Department of Health to support programs for drug and alcohol rehab.
A breakdown of tax revenue generated in each county was issued at the end of September 2019. The counties with the largest populations produced the most tax collections – Oklahoma and Tulsa counties were responsible for $9.5 million and $6.5 million respectively. But the data also included figures for per capita revenue by county, and much of the Cherokee Nation jurisdiction was rich territory.
The two highest per capita tax collections on medical marijuana were in Delaware and Sequoyah counties. Delaware County average $16.29 per resident, and Sequoyah County averaged $15.32 per person. The two counties were among just five with a per capita average above $12.
The state average for counties with medical marijuana dispensaries was $8.87 in revenue per resident. Nine counties did not have dispensaries at the time the data was released.
Tulsa County averaged $9.99 of revenue per resident. Other counties in the CN generating cash above the state average were Mayes ($10.51), McIntosh ($10.11), Washington ($9.21), Cherokee ($9.14) and Muskogee ($9.03).
Counties in the CN generating revenue below the state average were Craig ($7.13), Wagoner ($5.53), Ottawa ($5.47), Rogers ($4.38), Adair ($3.18) and Nowata ($2.74).
As of 2019, 33 states and the District of Columbia had laws widely legalizing marijuana for medicinal and even recreational use. Of the states allowing medical use, Oklahoma’s taxes are among the highest, totaling almost 16 percent.
The revenue is not entirely attributable to marijuana sales. Taxes are also collected on other merchandise sold at dispensaries, including rolling papers and pipes.