Oklahoma’s New Tiered Fee Structure for Cannabis Operators Faces Legal Challenge

OKLAHOMA CITY- In the unfolding legal landscape surrounding the medical cannabis industry in Oklahoma, the state Supreme Court has recently opted not to hear a challenge to a new law that significantly alters the fee structure for cannabis operators. The case will now proceed to the district court in Oklahoma County, as reported by The Oklahoman.

The legislation in question, House Bill 2179, was signed into law by Republican Governor Kevin Stitt in May 2022 and took effect on June 1, 2023. The law introduced a tiered fee system for licensed cultivators, replacing the previous flat rate of $2,500 with a variable fee structure predicated on the total square footage of a grow operation, potentially escalating to charges as high as $50,000.

This shift in policy has not been without contention. The petition challenging the law was spearheaded by Jeb Green, founder of Oklahomans for Responsible Cannabis Action, and includes the Bingo 101, Oklahoma Natural Cures, and Pharside dispensaries as plaintiffs. They argue that the new fee structure violates the Oklahoma state constitution, describing it as a “revenue-raising tax disguised as a fee.” Furthermore, they claim the bill did not garner the three-fourths majority vote necessary and was approved within the last five days of the legislative session, a period during which the passage of revenue-generating bills is prohibited by state law.

In contrast, the state attorney general’s office contends that the fee modification is not subjected to these constitutional requirements, as Oklahoma had a budget surplus at the time of its enactment. Instead, they categorize the bill as a response to public safety concerns, aiming to curtail the oversupply of cannabis in the state.

The current political landscape in Oklahoma is predominantly controlled by the Republican party, holding not only the governorship but also the offices of the secretary of state, attorney general, and both legislative chambers.

As the case transitions to the district court, stakeholders in the Oklahoma medical cannabis sector will be keenly watching developments, with the outcome having potential ramifications on the operational costs and the structure of the industry within the state. The trajectory of this case exemplifies the broader national dialogue surrounding the evolving regulations and economic dynamics of the burgeoning cannabis industry.