After Protest, Oklahoma Gov. Approves Rules Allowing Smokable Medical Cannabis

After Protest, Oklahoma Gov. Approves Rules Allowing Smokable Medical Cannabis

by Chris Moore | NEWS |

The Sooner State’s final regulations also get rid of requirements for THC limits on products and licensed pharmacists at dispensaries.

Oklahoma voters just finally got their way this week as Gov. Mary Fallin signed a newly revised set of medical marijuana regulations that essentially overturn the state’s previous attempt to heavily restrict the voter-approved law. The program's path to passage has been a rocky one, as the state Board of Health (BOH) attempted to impose a number of restrictions — including a ban on smokable cannabis — that Fallin initially signed into law last month. The advocacy groups who drafted the original voter-approved measure threatened legal action, and the state's Attorney General advised the BOH to back off on the new restrictions.

Last week, the BOH passed a new set of regulations that are much more in line with the original law that Sooner State voters approved. The ban on smokable cannabis is gone, as are requirements that all dispensaries have a licensed pharmacist on staff and that every female customer of “childbearing age” undergo a pregnancy test. The new rules also remove a controversial set of THC limits imposed on products, as well as a number of detailed restrictions regarding how the drug would be dispensed. On Monday, Gov. Fallin signed these new regulations into law.

The newly-created Oklahoma Medical Marijuana Authority will begin accepting applications by August 25th, but new medical cannabis startups are going to have to prepare to operate on a cash-only basis, just like most canna-businesses in the United States. Any bank that handles funds related to a federally prohibited substance like cannabis is subject to prosecution, prompting banks to shut down or refuse accounts for state-legal medical canna-businesses or even marijuana advocacy groups.

“Banks naturally want to steer away from anything that might even just questionably lead to money laundering allegations, so that means they won’t let you deposit your funds,” University of Oklahoma law professor Chris Odinet said to Tulsa World. “That means no access to credit card services, payment services or payroll for employees. In some states where this has been legal, like Colorado and California, employees are being paid in cash and customers have to pay for everything in cash.”

The situation will be no different in Oklahoma: Customers must pay in cash, employees must be paid in cash, and the businesses must remit their taxes in cash. The Oklahoma Tax Commission is preparing to accept large sums of cash payments from these new businesses once they are underway, but will only accept these deliveries at its main office in Oklahoma City. This means that every local canna-business will now be tasked with safely transporting large sums of cash across the state, increasing the risk of robbery.

“We’ve been asking our (Congressional) delegation to think about how to create a path forward that doesn’t bless the use of medical marijuana but does bless the ability to transact business with your customers,” Roger Beverage, president and CEO of the Oklahoma Bankers Association, told Tulsa World. “If you don’t do that, you have a significant public safety hazard because you literally have stacks and stacks of cash. Those stacks of cash are a very tempting target. Regardless of how you feel about the use of marijuana, that horse has left the barn. Now we’ve got to figure out how to get control of that horse.”

There have been a number of legislative attempts to fix the cannabis industry's banking problem, but most of these have been struck down by conservative Republicans in Congress. In March, progressive lawmakers attempted to add protections for banks willing to serve the cannabis industry to a financial deregulation bill, but with no success. In June, the Senate Appropriations Committee nixed an amendment to the 2019 budget bill that would have offered similar protections. In July, Texas Rep. Pete Sessions killed a similar budget amendment in the House as part of his long-standing custom of blocking all cannabis-related legislation.

There are also several newl bills that would protect states’ rights to legalize cannabis, including the STATES Act and Sen. Chuck Schumer's Marijuana Freedom and Opportunity Act. Both of these bills would remove marijuana from the Controlled Substances Act, which would free up banks to serve the cannabis industry in states that have legalized. Several states, like California, have also investigated the possibility of creating their own state-chartered banks specifically to serve their local cannabis industries and to make the prospect of paying taxes in cash less of a burden for these businesses. 


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Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.


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