Decoding OMMA's Cannabis Supply and Demand Report: A Critical Examination
Potential inaccuracies might shape policy decisions for Oklahoma's Medical Marijuana Market as a recent report presents questionable data on supply and demand.
The Oklahoma Medical Marijuana Authority (OMMA) recently comissioned an “empirical assessment of Oklahoma's medical marijuana market,“ spotlighting a massive supply and demand imbalance. As the state's cannabis industry continues to find its footing, several facets of this assessment call for more thorough examination and analysis.
Understanding cannabis weight measurements
As with any industry, the methods and metrics used for measurement are vital for accurate understanding and regulation. In the realm of cannabis, weight measurements play a pivotal role, not just in understanding the amount of raw product but also in gauging the actual consumable quantity in various derived forms. However, OMMA's recent empirical assessment has presented a categorization of cannabis weight that might not align with industry standards and practical realities.
The report categorizes one aspect of cannabis weight in the following manner:
"Packaged: the weight of cannabis buds either after drying or curing is complete when cannabis is prepared for testing and/or transfer, OR upon harvest if frozen fresh without drying or curing."
This categorization is problematic for a few reasons. Let's dive into a tangible illustration to elucidate the discrepancy in weight conversion from raw material to final “packaged” product.
Creating a cannabis concentrate, like hash oil, using dried and cured cannabis buds typically requires 5-10 grams of dried cannabis to yield 1 gram of pure hash oil. That's a ratio of up to 10:1. In simple terms, the weight of the final product is roughly 10% of the starting dried material.
Conversely, if using fresh frozen cannabis, due to its higher water content and volatile compounds, extracting 1 gram of hash oil might necessitate 20-30 grams, translating to upwards of a 30:1 ratio. The end concentrate, in packaged form, might stand at a mere 3.33% of the starting fresh weight.
But the discrepancies don't end there.
When it comes to producing edibles and other cannabis-derived products, the amount of raw dried cannabis required can also be substantial. For instance, if a batch of brownies requires 100 grams of dried cannabis to achieve a specific potency, the actual consumable weight in terms of edible product is just a fraction of the starting weight. Yet, the report doesn't seem to differentiate or account for the raw dried cannabis that goes into edibles, tinctures, topicals, or other popular products on the medical market.
By categorizing the weight of fresh frozen cannabis as 'packaged'—and moreover, not distinguishing the vast amounts of both dried and fresh frozen cannabis used in various product derivations—the report risks either an inadvertent misrepresentation of the true volume of consumable cannabis products or a deliberate inflation of numbers. This miscalculation or oversight is pivotal, as it mischaracterizes the genuine quantity of cannabis available for end-user consumption.
Considering this, the highlighted 64:1 ratio in the report appears fundamentally misrepresented. Given the complexities of cannabis measurements, such a skewed figure naturally urges stakeholders to critically assess the methodologies employed and the broader implications of such a portrayal.
Addressing Regional Concentration and the Leap to Illicit Trade
The report draws attention to the geographical concentration of cannabis cultivation, notably within central regions of the state. Alongside this observation, there's a leap in logic suggesting that such concentration might be fueling illicit trade.
The report states:
"Consumer demand is relatively consistent across the state... Cultivation (i.e., supply) is highly concentrated in the central region of the state."
It then draws a precarious connection:
"This may align with the narrative among Oklahoma residents and legislatures that substantial amounts of Oklahoma-cultivated cannabis are supplying out-of-state illicit markets."
This association is disconcerting. Basing assumptions of illicit activity purely on geographic cultivation concentrations could unjustly subject legitimate businesses to unwarranted legal scrutiny. Moreover, suggesting without concrete evidence that centrally located growers are primarily responsible for fueling illicit markets tarnishes the reputation of an entire region's legitimate industry players.
The "Hiding in Plain Sight" Theory and its Implications
One of the other contentious theories postulated by Cannabis Public Policy Consulting, the group behind the research, revolves around licensed growers' perceived risk and enforcement. They've termed this the "hiding in plain sight" theory. But what does this theory really entail, and what are its implications for the industry? According to the report, "A grower may feel much less exposed to risk of enforcement if licensed... historical enforcement of the medical cannabis program had been minimal."
Blanket insinuations that licensed entities are potentially operating with a cloak of legitimacy, but with illicit intents, creates a divisive atmosphere—even if there is some that are. This not only challenges the foundational legal principle of 'innocent until proven guilty' but might also jeopardize the collaborative dynamic essential for the industry's growth. Strained relationships between the OMMA and its licensees might lead to a variety of other complications as well.
By perpetuating a notion that licensed entities might inherently be predisposed to illicit activities, we risk fostering a distrustful and adversarial environment. Instead, a balanced regulatory approach should focus on collaboration, education, and ensuring that industry practices evolve in line with the best interests of both the public and the licensed stakeholders. Building trust and understanding should be paramount, rather than casting unwarranted suspicions onto the whole based on theories that may lack comprehensive supporting evidence to be so widely projected.
Demanding more from empirical assessments
The methodology deployed by the recent research appears to have foundational discrepancies not just on the supply side, but on the demand facet as well. Their assumption that medical patients consume only 11.28 grams per month is frankly laughable. Such a figure cannot be adequately reflective of the broader, diverse medical cannabis-consuming demographic.
The study sampled 1,332 cannabis users, which represents a mere 0.3% of the total number of licensed patients. Notably, a substantial majority of these participants, almost 70%, were white women. Drawing consumption averages from limited or non-representative data sets can significantly skew demand projections. Cannabis consumption can vary immensely based on a patient's medical condition, tolerance, method of administration, and frequency of use. Basing the entire state's demand on such a specific figure introduces a risk of dramatically underestimating actual consumption needs.
Just as the supply metrics in the report are contentious, grounding demand estimates in potentially subjective data further detracts from the study's credibility. When evaluating the entire landscape of a state's medical marijuana market, it's crucial that empirical assessments are rooted in comprehensive, representative and robust data to ensure accuracy—especially if they end up affecting patient access.
OMMA's Strategic Response: Good Intentions, Questionable Foundations?
In the wake of the report, OMMA has issued an almost equally concerning strategic response. Citing the research, they assert, "Now that there is data to validate the veracity of these claims," positioning it as the bedrock for their forthcoming rulemaking decisions. However, as we’ve illuminated, there are substantive grounds to challenge the accuracy of this data. Thus, the integrity and prudence of the policies birthed from such potentially flawed foundations demand rigorous examination.
OMMA’s strategic response has four core elements:
Enhanced Enforcement: Under the leadership of Executive Director Adria Berry, OMMA is gearing up for more rigorous enforcement policies to address what they perceive as an oversupply of medical marijuana in Oklahoma. We know there is an oversupply of cannabis in the state due to the limited nature of the market, but I’m not confident this report gives us any insight into the severity of it. If the supply metrics are based on potentially flawed methodologies, it raises the question of whether the proposed actions genuinely address the market's realities or are driven more by a broader intent to regulate the industry more stringently.
New Investigative Authority: With the Attorney General Gentner Drummond, and Oklahoma’s Bureau of Narcotics and Dangerous Drugs gaining new powers, there's an evident pivot towards stricter scrutiny. While ensuring compliance is crucial, it's imperative that the foundational data guiding such a shift is accurate, lest we ensnare legitimate businesses in unnecessary red tape or even legal entanglements.
Casual Entry and Ownership Concerns: OMMA’s response points to what they term as "casual entry" into the market. By emphasizing the informal selling of licenses and suggesting that certain ownership structures might be in violation of legal requirements, OMMA has signaled a move toward stricter vetting processes. However, the selling of licenses is allowed by statute, and applicants must follow OMMA-defined guidelines, provide comprehensive personal data, and even undergo interviews with the Oklahoma Bureau of Narcotics and Dangerous Drugs (OBNDD) to become licensed. Labeling the application process as 'casual' mischaracterizes the steps involved that legitimate business applicants adhere to and undermines OMMA’s own required processes. It's particularly disconcerting to take this piece in while OMMA consistently deviates from their own statutory obligation to process applications within the specified 90-day window. Some applicants, who initiated their process in August of 2022, find themselves stranded in bureaucratic limbo for over a year. Despite the troubles OMMA faces in making up for their own initial shortcomings, stonewalling legitimate business applicants who diligently adhere to OMMA guidelines is neither a constructive nor appropriate response to the complexities of the situation.
Policy Gaps and Future Rules: OMMA's indication of working with lawmakers to address perceived policy gaps based on this study is concerning. If the foundational data has flaws, then the resultant policies could be misaligned with the realities of the industry and further hinder or damage legitimate businesses. It's imperative that any new rules, especially those set to be released in the coming fall, are grounded in accurate, comprehensive data.
OMMA's strategic response, while potentially well-intentioned, is concerning given the potential inaccuracies in the foundational study it relies upon. Policy decisions, especially those affecting an entire industry, should be based on data that genuinely reflects the landscape of that industry. As we've described, there are compelling reasons to believe that the supply and demand study may not provide an accurate portrayal of the Oklahoma cannabis market. It remains to be seen how these policies will unfold, but one can only hope that further scrutiny and dialogue will ensure a balanced and fair approach.
Expanding legal access always stands out as the cornerstone strategy to rectify the glaring imbalance between supply and demand in Oklahoma’s cannabis market. Tackling the illicit market, a persistent thorn in the industry's side, requires broadening lawful channels for consumers. Regrettably, instead of advancing towards comprehensive legalization for adult use — a move that could substantially mitigate the supply and demand predicaments — Oklahoma spent half a year in 2022 entangled in concerted efforts to stymie such progress. As the Authority contemplates various strategic avenues to correct their initial oversight, we hope they weigh the ramifications of decisions that might inadvertently constrict access for patients and legitimate players even further. Such actions could be counterproductive, potentially steering OMMA further away from their ultimate objective of a balanced and well-regulated market.
