Major Cannabis Companies Shun Oklahoma

Oklahoma has essentially been shunned by the largest multi-state operators (MSO’s) in the country. Most legal states tend to have a handful of MSO’s who plant their flags and make a big showing. Cresco Labs in Illinois or Trulieve in Florida and great examples of this. However, Oklahoma is a massively fractured market when it comes to ownership and the jury is out on whether it’s a good idea or not.

Oklahoma’s Market Size

Medical marijuana was legalized in Oklahoma through a ballot referendum in 2018. The state looked like it was on track to move forward for full legalization, but that has been delayed by the pandemic. The state has been on a licensing frenzy with over 7,000 businesses approved. 

Oklahoma is now forecast to make it to the top ten list of states for per capita spending on cannabis. The per capita spending as per a recent ArcView/BDSA report showed Oklahoma at $90.40 in 2019 spending and that is projected to grow to $226.40 by 2025. 

The state recorded $365 million in sales in 2019, the first full year, and that number is estimated to grow to $950 million by 2025. That will be even bigger than Pennsylvania’s estimated $770 million in 2025. The legit market took 30% away from the illicit market almost immediately. 

These numbers would seem to be enough to entice a big MSO to head to the Sooner State, but that hasn’t happened. According to Cannabiz Media, 6,088 license holders only have one license, while 619 held multiple licenses. There are none of the familiar names in the top 25 license holders list. 

Everyone Gets A License

One of the biggest differences for Oklahoma’s program is the liberal approach to licensing and the low 4% tax rate. Unlike the millions of dollars that it costs in most states to procure a cannabis license. it only costs $2500 to get a license in this state. A refreshing difference, but as one unnamed cultivation vendor put it, “I expect to see my products for sale in two years on CraigsList or eBay.” 

The state has registered 5.8% of the population for medical marijuana patient cards. That is expected to grow to 10% in 2025. By comparison, Nevada only registered 1.2% and Oregon was at 2.5% in 2014 at its peak. With no qualifying conditions, doctors are free to recommend medical marijuana for any reason they deem fit. Like other states, many of these patients are actually recreational users and if full legalization happens, they are likely to drop their medical cards.

Producers Paradise

The numerous dispensaries though are great for brands. Oklahoma is home to the second most dispensaries per capita, which equals 15.6 dispensaries per 100,000 residents. A new report from Verilife wrote, “It’s interesting to note that while Oklahoma has the most marijuana dispensaries per capita, it has generated the least amount of tax revenue from cannabis out of all the states where marijuana is legal. The state is home to nearly 600 dispensaries but generated only $70,000 from marijuana in 2018.”

According to LeafLink, Smokiez Edibles is the number one brand in the state. The brand also sells its products in California, Washington, and Oregon and comes from a California-based privately-held company called LoudPack Inc. This quiet brand has been amassing numerous awards for its quality and quickly looked to the state as a place to dominate. 

Top Oklahoma Brands on LeafLink in 2020 – 7/29/20

  • Smokiez Edibles
  • US Cannabis Pharma
  • Pharmicated
  • Cartel Oil Co
  • Sublime Brands OK

Top Oklahoma Products on LeafLink in 2020

  • Maui Waui Outdoor Flower from Argent Cannabis
  • KIMBO KUSH from Happy Hour Medicinals
  • Sublime 100mg Caramel Chew from Sublime Brands OK
  • Multi-Piece Watermelon 250mg Sweet Fruit Chews from Smokiez Edibles
  • 500mg GANJA GUMMIES from CANNA BASICS

Colorado-based edible brand 1906 said it was choosing to enter into the Oklahoma market in lieu of California and Oregon, due to the state’s burgeoning cannabis scene within its major cities such as Tulsa, Oklahoma City, and Norman. The brand is aiming to become not only the largest edibles company in Oklahoma but west of the Rocky Mountains. The promise Oklahoma holds is the brand’s first foray into becoming the market leader in the emerging region.

1906 CEO Peter Barsoom said, “Oklahoma is the most “free market” of medical and adult use markets with low barriers to entry for patients and business owners. As a result, you have a vibrant market with one of the highest per capita patient counts, competitive prices, and high accessibility (lots of dispensaries). Which had translated into one of the largest medical marijuana markets.”

He added, “The financial success of MSOs is dependent on regulatory arbitrage. Keeping competition out, prices high, and vertical integration requirements. So if those are the requisites of success for an MSO, Oklahoma is not an attractive market. The business model of most MSOs is dependent on a supply-constrained large arbitrage between the cost to cultivate cannabis and the cost the consumer/patient pays.” 

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


6 comments

  • Avatar
    420Oklahoman

    August 4, 2020 at 8:52 am

    You need to get some more up to date information on Oklahoma’s tax revenue. Oklahoma only started selling products in November 2018. So this is using slanted data. Look at 2019 and 2020 data. Its easy enough to google.

    Reply

    • Debra Borchardt
      Debra Borchardt

      August 4, 2020 at 9:07 am

      The story is really focused on why MSO’s aren’t coming to OK. That information doesn’t change the premise of the story.

      Reply

  • Avatar
    Okmarijuana

    August 4, 2020 at 10:01 am

    You should also note; our state tax is 7%, not 4%, and that’s not inclusive of what any give county or municipalities might impose, per omma, from their twitter last month no less https://mobile.twitter.com/OMMAOK/status/1285998920481595392, our patient population is actually up to 8%, not 5%, and its climbing every month towards what will be 1 in 10 before 2022, easily, and if the point of this whole article was to highlight mso’s here in state you may want to mention that bloom, wana, rove, select, timeless, APOTHECARY lol hello talk about market share…, and a ton of other out of state companies have set up shop here and they’re thriving. Also, 2018 sales are outlandishly misleading considering our program only existed for a few months at that point.

    Lol you’re the ceo of this site; maybe actually pay an intern, and you might get some to do rudimentary research into tge topic your site is dedicated to… Just saying!

    Stay blazed dear 😉

    Reply

    • Debra Borchardt
      Debra Borchardt

      August 5, 2020 at 10:07 am

      Dear reader, Like other media companies we are trying to navigate the loss of events which was 80% of our revenue causing us to rely on advertising (of which there is little). We are just trying to survive and do the best we can. I have had to cut my writer budget in half and may have to cut it again. We have managed to accomplish a lot with very few resources. As of right now, I am working with limited internet and on generator power due to the storm. I will probably not get my power back for at least a week, but here I am answering you. My apologies for not being able to spend numerous hours on a story that generated minimal page views. Several cannabis news outlets have gone out of business over the past 6 months and we are hanging on. I am doing the best I can.
      Sincerely, Debra

      Reply

  • Avatar
    Smithygreen

    August 4, 2020 at 6:53 pm

    The MSOs are not coming to Oklahoma because they are not welcome. SQ 788 was meant to create a market fir the people by the people. Not for a few select companies that manipulate markets to make money. To that end SQ788 has been highly successful and Happy to have voted yes!

    Reply

    • Avatar
      G13Man

      August 7, 2020 at 6:57 pm

      thanks , that was what i was surmising …
      and had wished other states would do !!!
      i will not support or buy from a companies that is related to/owned by a cigarette or beer or major drug company !! Why support a corporation that over pays executives living out side ur community !!!

      Reply

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