New Lawsuit Targets Hikes In State Medical Marijuana Licensing Fees

A lawsuit has been filed against the state and Oklahoma Medical Marijuana Authority over a law that took effect last month. The new law raises licensing fees up to 2000% for some in the medical marijuana business.

The law was passed during the 2022 legislative session, and the suit claims the law is unconstitutional.

The lawsuit was filed by a group of marijuana dispensaries, growers and labs. Jed Green is one of the petitioners.

Green said the bill was unconstitutional because it didn’t meet the legislative criteria for a revenue bill to become law.

“It did not receive a three-quarter majority and it was not passed by being signed into law by the governor within the last five days of legislative session,” Green explained.

“It was aggravating, it was frustrating,” Sen. Jessica Garvin, (R-Duncan) said. “It was a fair process, and everyone had a seat at the table that wanted one.”

Garvin—the author of the bill—said she was confused and irritated when seeing the lawsuit mainly because key players were a part of the conversation when the final legislation was being discussed.

“This is not just a backdoor conversation that people had behind closed doors and determined this was the best thing for the state,” Garvin said. “Every single industry member who wanted a seat at the table had that seat at the table.”

A spokesperson from the Oklahoma Medical Marijuana Authority—or OMMA—told News 9 that they don’t comment on pending litigation but said the attorney general’s office is representing them and the state.

With the new law in place, the licensing fees now range from $2,500 to $50,000, based on a tiered fee schedule.

“The way the system is tiered is that, for example, a 1A farm that has 100 acres would now, instead of paying $2,500, they would pay $2,500 per acre and the laboratories go from $2,500 to $20,000,” Green said.

Garvin argues it’s not a revenue bill, so it didn’t need to meet those requirements to pass.

“We knew that money was going directly to the agency and not into the general revenue pot of money to be expended by the legislature,” Garvin said.

The increased fee will bring an extra $30 million to the state, and that money will go to OMMA to increase investigations into illegal grows.

“We've got to get a handle on the illegal operations here in Oklahoma,” Garvin said.

Green said this fee increase will hurt the legal marijuana business, turning customers to illicit products.

“75% of consumer purchasing of cannabis is based purely on price point. So the higher the taxes makes them less competitive with the illicit market,” Green said.

Garvin said people will buy illicit products, regardless of dispensary prices.

“The illicit operations in Oklahoma have nothing to do with what the costs are at the dispensary,” Garvin said.

Green says the state didn’t need extra money at the expense of the marijuana businesses.

“They pulled in $80 million in the last year and that's not counting sales tax. This program has brought in over a half a billion dollars in the first five years to our state revenue,” Green said.

“To his point, because we didn't need the extra revenue, this was something we were doing strictly to get in line with what other states are doing,” Garvin said.

Garvin said the point of the bill was never to be a revenue bill, instead it just gets the state to the level of other competitors like California.

“There are some states that are $50,000, there are some states that are $250,000 and Oklahoma was $2,500,” Sen. Garvin said.

The bill is heading to the Oklahoma Supreme Court, where the first hearing is scheduled for August 1st.