Oklahoma cannabis businesses sue over residency, location requirements

Several medical marijuana businesses in Oklahoma are asking a judge to block the state from enforcing laws they say could prevent some licensed cannabis businesses from continuing to operate.

The businesses are asking an Oklahoma County district court judge to block the Oklahoma Medical Marijuana Authority from requiring cannabis business owners to be residents of the state for at least two years and mandating that dispensaries be located more than 1,000 feet from schools and preschools.

The laws, passed by Oklahoma's Legislature in 2019, sought to clarify State Question 788, which legalized medical marijuana in the state. But some cannabis entrepreneurs say the laws are on the verge of putting them out of business.

The lawsuit alleges the legal changes and subsequent rules adopted by the OMMA left "hundreds, if not thousands" of licensed dispensaries within 1,000 feet of a school entrance. Similarly, the lawsuit alleges some licensed business owners, who moved here after the passage of SQ 788, have not been Oklahoma residents for two years, which means they could lose their business licenses.

One of the companies involved in the class-action lawsuit filed this week, KC's Cannabis, LLC, says it is located more than 2,000 feet away from a nearby school, but within 1,000 feet of the entrance to the dugout of a softball field, which falls within the OMMA's definition of a school entrance.

The lawsuit cites similar problems for other medical marijuana businesses.

State legislators sought to resolve these issues this year, but that ended when Gov. Kevin Stitt vetoed a massive marijuana omnibus bill he said was “not fully scrutinized” in the final days of the legislative session. Despite overwhelming support for House Bill 3228, legislators declined to try and override Stitt's veto.

Along with allowing dispensaries to deliver to some medical marijuana patients, HB 3228 would have tweaked residency requirements and permitted dispensaries to stay in their current location if a school is built within 1,000 feet after the business opens. In other words, the bill could have helped business owners currently in limbo.

The lawsuit, filed by Tulsa attorney Ron Durbin, who works with cannabis industry clients and helped lawmakers craft HB 3228, asks a judge to rule that the Medical Marijuana Authority cannot deny business license renewals if the owners do not meet the two-year residency requirements or if the dispensaries are located within 1,000 feet of a school or preschool. The lawsuit also asks the OMMA to immediately renew any licenses that have been rejected on those grounds.

The Medical Marijuana Authority and attorney general's office declined on Tuesday to comment on the lawsuit.