Everything you need to know about OMMA’s tiered licensing
HB 2179 went into effect June 1st creating a tiered licensing structure new and existing OMMA licensees should be prepared to navigate even through a suit.
HB 2179 has garnered a lot of attention in the past year. Initially, we wrote that its passing may have violated the Oklahoma State Constitution. Today a suit was filed in The Supreme Court of Oklahoma giving the claim real weight. However, for now at least, the law is in effect and commercial business licensees logging in for renewal will be greeted with some new requirements and could possibly be paying substantially more in annual fees.
Each license type has its own pricing structure that is unique to the activity of the licensee. To avoid being surprised with an expiration deadline looming, licensees should understand how the law will affect their renewal application process and compliance status in the meantime of a court ruling.
Commercial Growers
Previously one grow license worked across the board—a commercial grower could have indoor, outdoor or greenhouse operations all on the same licensed property under the same license. As of June 1st, commercial growers now need to choose whether they are an indoor or outdoor grow and obtain a license for each type of operation as each type has its own tier structure.
The initial tiered licensing fees may differ from annual recurring fees. OMMA states the initial fee is calculated based upon the total amount of square feet of canopy or acres the grower estimates will be harvested, transferred or sold for the year. The annual recurring fee following the initial year will be based upon the total amount of square feet of canopy or acres harvested during the previous 12 months.
Commercial grower tiers range from $2,500 to $50,000 or more.
INDOOR OMMA License Tiers
table source: oklahoma.gov/omma
OUTdoor OMMA license tiers
table source: oklahoma.gov/omma
Greenhouses and other light deprivation structures are considered “indoor” by OMMA and should be accounted for in your canopy estimate and proof submitted with your application.
If you have an indoor and outdoor grow you will need to have two separate licenses to remain compliant and you will have to pay the appropriate tier fee for each license type annually. Throughout the moratorium licensees facing renewal who have both indoor and outdoor grows will be able to submit an additional renewal application. When renewal applications are processed the applicant will be issued licenses specific to indoor and outdoor operations and will notice a differentiation represented in their license number. Indoor grow license numbers will begin with GAAI and GAAO for outdoor. Keeping this in mind, any changes that happen to your license number, whether you have both grow license types or not need to be communicated to Metrc and represented on your RFID tags to avoid a costly compliance infraction.
Commercial Processors
Commercial processors will face a similar initial and annual tiered fee structure as growers, but their fees will be based upon the amount of biomass or the production or use of concentrate. Every 1,000 grams of nonliquid concentrates are calculated as 1 liter.
Commercial processor tiers range from $2,500 to $20,000.
table source: oklahoma.gov/omma
Dispensaries and Labs
The initial fee for dispensaries will remain $2,500. For each subsequent renewal year, dispensaries fees will be calculated at 10% of the sum of combined annual state sales tax and medical marijuana excise tax of the dispensary for the proceeding tax year. The minimum dispensary fee is $2,500 with the maximum annual fee being $10,000.
Medical Marijuana laboratories will see their license fees increase from $2,500 to $20,452.05 after service fees, regardless the volume of business they are doing.
What to expect
When you will be introduced to the tiered licensing process depends on your license renewal period. If you submitted a renewal prior to June 1st, 2023 that renewal be processed outside of the tiered licensing structure and your first tiered licensing application process would be next year’s renewal. Every application submitted on or after June 1st—even though OMMA didn’t have tiered licensing ready in Thentia until June 7th—will have to choose and provide proof of initial tiers and submit their renewal application under the fees outlined in HB 2179.
Following suit
Today a suit was filed that asks the Oklahoma Supreme Court to find HB 2179 unconstitutional. Jed Green of Oklahomans for Responsible Cannabis Action along with three commercial cannabis businesses filed the suit that alleges HB 2179 imposes a revenue-raising tax disguised as a fee and was therefore unconstitutionally enacted. As Gies Law Firm pointed out in a June 2022 blog, the bill undeniably raises revenues without following the procedure mandated in Article V, Section 33 of the Oklahoma Constitution which states:
C. Any revenue bill originating in the House of Representatives shall not become effective until it has been referred to the people of the state at the next general election held throughout the state and shall become effective and be in force when it has been approved by a majority of the votes cast on the measure at such election and not otherwise, except as otherwise provided in subsection D of this section.
D. Any revenue bill originating in the House of Representatives may become law without being submitted to a vote of the people of the state if such bill receives the approval of three-fourths (3/4) of the membership of the House of Representatives and three-fourths (3/4) of the membership of the Senate and is submitted to the Governor for appropriate action. Any such revenue bill shall not be subject to the emergency measure provision authorized in Section 58 of this Article and shall not become effective and be in force until ninety days after it has been approved by the Legislature, and acted on by the Governor.
The suit states HB 2179 did not meet the three-fourths threshold in the House of Representatives and was enacted just one day before the legislature adjourned—violating another requirement that revenue raising measures be enacted prior to the last five days of the session.
Although the bill was passed over a year ago, licensees are just now beginning to feel its impact. The suit highlights a commercial grower could face a 1,900% increase in licensing fees year-over-year under the law. Additionally, the fee for medical marijuana laboratories is eight times what is was. Forrest Bennet of the Oklahoma House referred to the fee increases of HB 2179 as “industry ending.” They may be to an extent if they stick—the allure of access and equitable opportunity that was created through uniform low cost licensing is certainly lost for now. The suit calls the discrepancy among fees for similarly situated medical marijuana businesses discriminatory and the fact that the tiers to not apply uniformly arbitrary.
While our hope is that the court agrees the Legislature and Governor enacted an unconstitutional statute and grants the writ of prohibition sought by the suit, in the meantime businesses must follow the new processes and pay the fees to submit a successful renewal application, keep an active license and remain in compliance. If you run into hurdles with your license renewal and need guidance or hands-off assistance with the process, the experienced team of cannabis attorneys at Gies Law Firm can help. Book a consultation with us today to ensure you stay active while the action plays out.
