It’s official—Oklahoma has become the 30th state to legalize medical cannabis. However, it’s one of only two states thus far to open its cannabis market as a “free market” while the rest of pot-legal America functions as a regulated market under strict supervision and ever-fluxing legislation.
In December alone, Oklahoma cannabis retailers raked in almost $1 million in profits; $70,000 of that generated from the new 7% tax on cannabis sales. The state’s cannabis program also prohibits municipalities, counties, or cities from instituting zoning laws or issuing fines to cannabis businesses.
Majority of businesses in the United States function as regulated markets. A regulated market is "a market over which government bodies or industry groups exert a level or oversight and control." While some advantages include public health and safety, these markets are capable of producing monopolies and bureaucracy.
Free markets are designed to allow the free flow of supply and demand to determine the allocation of resources without interference from authorities. Some advantages include transparency and competition in the economy and the availability of premium products. However, some disadvantages of free markets include disregard to public safety and uncertain impacts in the economy.
(Cannab)est Destiny: Oklahoma
Cannabis entrepreneurs & consumers are flocking to Oklahoma like pilgrims and pioneers to a new frontier. While Oklahoma’s State Department of Health will monitor the budding industry, they will have little to no means of interfering. With no regulation in effect, it’s a free-for-all and everyone who enter: even out-of-staters can apply for temporary cards.
About 560 commercial license applications are currently under review by Oklahoman authorities—which is more than some of the more established recreational states, including Washington and Oregon.
Recent reports reveal some applicants are submitting anywhere between five and 25 applications. With Oklahomans actively supporting agriculture, free market principals, and self-sufficiency, it seems the industry is sure to flourish. Industry watchers already predict that cannabis sales will produce up to $250 million per year for Oklahoma.
Advantages of Cannabis Free Markets
There is no limit to the number of cannabis business licenses that can be awarded. Outdoor commercial grows are also permitted with no restrictions on the number of plants or square footage in a cultivation facility.
Doctors are allowed to recommend the product for any condition they see fit
Municipalities are prohibited from enacting zoning restricts to prevent dispensaries from opening. This allows the cannabis program to flourish statewide rather than have it concentrated in cannabis-friendly regions.
No barriers to entry and easy access to medical marijuana may serve to boost the program and patient enrollment, which will be needed if the state is to support such a massive industry.
Disadvantages of Cannabis Free Markets
Over-saturation will weed out many small businesses, although the ballot initiative was designed to let the “free market” determine the business climate. Additionally, it’s uncertain how many license holders will open their doors and conduct business.
A competitive environment creates an atmosphere of survival of the fittest. This causes many businesses to disregard the safety of the general public to increase the bottom line.
Lack of reporting and inventory management regulations leaves room for black-market product acquisition.
Based on the sheer number of growers will lead to over-saturation and glut of cannabis, the state is primarily set up to become the largest black market producer of cannabis in the country.
The lack of testing requirements leaves patients guessing the potency of products as well as issues with pesticides, molds, and solvents in the processed good as well as flower.
The price of flower is at an all-time high due to a lack of supply, but prices will plunge 50% or more once growers can harvest their crops and the market is more established-- creating the lowest-priced medical cannabis in the country.
Retailers may face significant hurdles attracting patients while retaining healthy margins, as price consciousness will lead to many low-cost dispensaries.
Give Us a Holler
Start your business off right to ensure success and sustainability as Oklahoma's cannabis market matures. As of today, there are over 30,000 patients and 2,200 business licenses already approved in the state of Oklahoma. Patient numbers are expected to rise to more than 80,000 by the end of this year.
Consider contacting The J. Whitney Group to receive the highest level of comprehensive business support in the Oklahoma cannabis industry. Canna-businesses will pop up left and right but with the right aid and tools, your's will be the lone survivor when the going gets rough. Benefits of conferring with a consulting firm include:
Properly following regulations when designing and setting up your facility
Order and process in which to launch your business – avoid costly mistakes and launch your businesses sooner
Knowing which vendors to use (POS, technology, security, supply chain, etc.)
Establishing and implementing processes and procedures to operate efficiently and compliantly
Staff sourcing and training
Our goal is to help the industry thrive by demonstrating that cannabis programs can operate with transparency and accountability, providing peace of mind to stakeholders and ensuring safety for patients and the community. Contact The J. Whitney Group today to give your business the best chance of survival.