Q&A with Elizabeth L. Dalton: Medical marijuana dispensaries a ways off
Medical marijuana dispensaries a ways off
Q: On Aug. 25, the Oklahoma Medical Marijuana Authority began processing applications for patient and commercial licenses. Within 5 days, the authority had received more than 1,000 applications for commercial licenses. The most popular request has been for grower licenses, followed by applications for dispensary licenses and processor licenses. Is the authority going to limit the number of commercial licenses granted?
A: Not at this time. The language of State Question 788, which legalized medical marijuana in Oklahoma, was clear: applicants who meet the standards described in the new legislation are to be granted licenses. There's no limit to the number of licenses that can be granted to any individual or entity, nor is there any limit to the size of a licensee's operations.
Q: When can patient license holders expect to see medical marijuana available in dispensaries?
A: Not for a while, at least with respect to dispensaries that obtain their inventory in compliance with state law. Commercial licensees cannot purchase marijuana out-of-state. Dispensaries must buy cannabis from Oklahoma-licensed growers and processors, which means they'll have to wait for the first crop to be ready. Dispensaries that jump the gun and bring in out-of-state product illegally may find themselves in significant legal peril. All commercial licensees have specific reporting requirements, and the authority can review those reports in order to determine whether purchases from unlicensed sources are occurring.
Q: On July 11, the Oklahoma Medical Marijuana Authority adopted emergency rules, which it replaced on Aug. 1. What are some of the significant changes from the original rules?
A: The rules were dramatically reduced. Among other changes: commercial licensees don't need a surety bond; sales of smokable medical marijuana are permitted; dispensaries needn't employ a licensed pharmacist; transportation licenses automatically will issue with the issuance of any commercial license; and specific structure construction and security requirements have been eliminated.
Q: What are some of the practical problems that applicants for commercial licenses are experiencing?
A: Marijuana remains classified as a controlled substance under federal law, which prohibits the intentional manufacture, distribution or dispensing of a controlled substance. Federal law also makes illegal certain financial transactions connected to unlawful activity, including transferring monetary instruments or funds with the intent to promote the carrying on of specified unlawful activity, including the manufacture, importation, sale or distribution of a controlled substance. As a result, prospective licensees are having trouble securing banking relationships or insurance coverage. Prospective landlords with mortgages on their property are restricted from leasing to commercial licensees. Ordinary business expense deductions aren't available for federal income tax purposes. Judicial enforcement of contracts may be limited or unavailable, and industry participants will not be able to obtain relief from creditors under bankruptcy laws. Certain communities are looking at zoning as a means to restrict commercial medical marijuana operations. Growers cannot lawfully obtain seed out of state. Testing isn't required to ensure products are safe to patients.
Q: Can we expect to see changes to the law or the regulations in the future?
A: Undoubtedly. The Oklahoma Legislature has created a bipartisan working group to address perceived inadequacies under the current statute. It is anticipated that the working group will present proposed legislation in Spring of 2019. The Oklahoma Medical Marijuana Authority's regulations indicate that regulations for medical research licenses and laboratory testing requirements are reserved, suggesting future rule making is anticipated. It's unknown whether commercial operations that obtain licenses under the current structure can expect to be grandfathered under revised laws. Commercial licenses are only valid for one year.
PAULA BURKES, BUSINESS WRITER