New bill would force license cap decision on Oklahoma counties

A new bill prefiled in the State House of Representatives would force Oklahoma counties, cities and municipalities to set their own license caps for cannabis businesses or have one set for them.

HB 2987 was prefiled in the legislature amidst the holiday hustle, so it would have been easy to miss. As the legislative session begins to pick back up however, this will certainly be one to watch. The bill would require counties, cities and local municipalities to enact certain ordinances or resolutions pertaining to medical marijuana businesses—something State Question 788 expressly prohibited.

Section 6 of SQ 788 provides a list of rights and protections for Oklahoma’s medical cannabis card holders and commercial businesses. Among them was a provision that played an essential role in the proliferation of licensed cannabis businesses throughout the state. That is:

F. No city or local municipality may unduly change or restrict zoning laws to prevent the opening of a retail marijuana establishment.

If passed, this HB 2987 would amend line F of section 6 to not just allow, but require counties, cities and municipalities to enact ordinances or resolutions restricting the aggregate number of additional medical marijuana businesses that may operate within them.

In the case a county, city or municipality declines to enact an ordinance restricting additional businesses, OMMA will cease issuing licenses altogether except under these two conditions:

a. the Authority shall be authorized to issue one additional medical marijuana dispensary license and one additional medical marijuana grow facility license per county per calendar year, or

b. if the population of a county exceeds one hundred thousand (100,000), as determined by the latest Federal Decennial Census, the Authority shall be authorized to issue two additional medical marijuana dispensary licenses and two additional medical marijuana grow facility licenses per county per calendar year.

This is something we had to read multiple times and thought must be an error. Essentially, HB 2987 puts counties in a position where they either have to enact local license caps themselves or be subject to the default license cap of one grow and one dispensary license per year. One way or another HB2789 creates statewide license caps that may vary in their degree of restriction. Either way it forces local governments to act on something they may have never otherwise considered, especially if they have so far benefited from the economic boom.

If this bill makes the long journey through the legislature to become law, it would go into effect November of 2022.

If you already have an existing license the law would have no immediate impact on your business, but we know that it impacts longterm growth initiatives. Some municipalities have already taken steps to limit the number of cannabis businesses within their boundaries. Most recently the city of Goldsby proposed new zoning laws that would require cannabis businesses to be on industrial zoned land. Local concerns in Goldsby carry over to statewide concerns surrounding HB 2987—that even though existing cannabis businesses may be exempt from new ordinances now, they wouldn’t be able to expand their business as previously planned in the future.

It is important to consider by prohibiting a county, city or municipality from restricting the opening of a new cannabis business and leaving the state licensing system uncapped we preserve the expansion of patient access. Requiring such restrictions be imposed by or upon every corner of the state could result in unintended ethical and economic consequences. It is our hope the legislature preserves the promise SQ788 made to both to patients and businesses and keeps the market open.

If you’re seeking cannabis business licensure in the state of Oklahoma in 2022, it will be wise to track HB 2987 on its journey to becoming law and get the timing right. Keep in mind that existing businesses will be exempt from the immediate effect of the bill’s passing and the team at Gies Law Firm can execute an efficient and successful application on your behalf whenever you are ready. Click here to book a consultation, whether it be for existing business strategy or just getting started.

Read HB 2987 in its entirety here >>
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