Dispensaries snap up OKC property despite rules confusion
Oklahoma City — The inside doesn't look like much now, but Jerame Cuthbertson has big ideas for the marijuana dispensary he plans to open on the southwest corner of NW 23 and Villa, and he considers himself fortunate to have a spot on a high-traffic block.
“I think this is going to become cannabis row, to be honest,” he said.
Whether that happens remains to be seen.
But revised rules the Board of Health issued over the summer opened much of NW 23 Street to marijuana businesses. Under the original rules the board passed on July 10, dispensaries couldn't open within 1,000 feet of a school, church or playground, which effectively shut them out of some popular retail neighborhoods, like Uptown and Automobile Alley.
The new rules only prevent dispensaries from opening near schools. That is consistent with State Question 788, which legalized medical marijuana upon its passage in June and listed school zones as the only restricted areas.
All that could easily change, though, when lawmakers return to the Capitol in February.
The Oklahoman used Oklahoma City's zoning maps and publicly available data about schools, churches and playgrounds to determine where dispensaries could set up shop within city limits. If lawmakers restored the stricter rules, dispensaries could be pushed toward industrial areas at the fringes of the city, though a few major retail spots, like Bricktown, would remain open.
Cuthbertson has his fingers crossed that they don't decide to expand the school zone by 200 feet. His property line is about 1,200 feet from the door of ASTEC Charter Middle School in Shepherd Center.
Rules still in flux
Chip Paul, who with his wife Cynthia Paul worked on the campaign to legalize medical marijuana, advised anyone planning to open a marijuana business to demand an “out clause” in any leases. The Pauls are planning to open at least two dispensaries, and an out clause would allow them to stop renting a space without penalty if the city or state made any changes that prevented a marijuana business from operating in that building, he said.
“The worst thing to happen is to get regulated out of your business” and still owe rent, he said.
Some cities are looking at adding their own restrictions about where marijuana businesses can operate, which could create headaches for dispensary owners, even if the rules ultimately don't hold up in court, Paul said.
For example, Tulsa has toyed with the idea of forbidding dispensaries to set up within 1,000 feet of any residence, effectively pushing them out of the city. Marijuana advocates may have to sue to block such rules, he said.
“What we're trying to do is make sure cities aren't singling out marijuana businesses,” Paul said.
While it might not please voters who supported SQ 788, there is a public health case for restricting dispensaries. A study at the University of Pittsburgh Graduate School of Public Health found that, at least in Los Angeles, each additional dispensary in a ZIP code was associated with 6.8 percent more hospitalizations where patients' charts noted they had used marijuana, though it doesn't prove the dispensaries caused increased hospitalizations.
So far, Oklahoma City hasn't proposed any marijuana-specific restrictions. A city spokeswoman said dispensaries could set up in any area that's zoned for retail. Ensuring marijuana businesses aren't too close to schools is up to the Oklahoma Medical Marijuana Authority when it issues licenses, she said.
Though a significant amount of space is available in Oklahoma City, that doesn't mean it's been easy for potential dispensary owners to find a location.
Jim Parrack, head of the retail division of Price Edwards & Co. in Oklahoma City, said the brokers in his office get at least one call a week looking for a location for a marijuana or CBD business. Cannabidiol, or CBD, is a chemical in marijuana that doesn't produce a high.
“It's been fairly easy to find locations for the CBD stores,” Parrack said. “The dispensaries have been a different story.”
Some landlords are opposed to medical marijuana, or worried about legal problems, Parrack said. Others have a multiunit building, and other tenants' leases forbid renting an adjoining space to marijuana businesses, he said.
Some dispensary owners are trying to buy their own buildings to avoid having to deal with landlords, but that's typically only an option for someone who can pay cash, Parrack said. Banks are reluctant to do business with dispensaries because marijuana remains illegal at the federal level.
Cuthbertson said he felt lucky to get his location for a different reason: the competition for prime spots is getting intense. As of Monday, the Oklahoma Medical Marijuana Authority had approved 469 dispensary applications, along with 719 growers and more than 5,000 patients.
“It's gotten crazy on the market,” he said.
With the rush to enter a crowded market, aspiring dispensary owners are having to tolerate some ambiguity. Cuthbertson said he's preparing for an early December opening with a simple set up — an office space in back and an open retail area — and will have to adjust as the state issues more health and security rules.
“We're just excited to get into it at ground zero,” he said. “We're just trying to open as basic as we can and fill it out.”