The Oklahoma Medical Marijuana Authority in June rushed into action with a strategic response plan following a damning report that the state’s licensed cannabis businesses were producing 64 times more cannabis than the demand from registered patients — a statistic shocking in severity, but not at all surprising considering the Sooner State issued more than 6,500 licenses to cultivators.
The supply and demand study, commissioned by Cannabis Public Policy Consulting, suggested the state’s illicit market “may, in fact, be hiding in plain sight” due to the volume of oversupply within the regulated market coupled with the low barrier to entry for prospective licensees.
Within the regulated medical market, yearly demand for cannabis was estimated to be about 50 million grams for the state’s 369,515 registered patients; total demand, including both the legal and illegal markets, was estimated to be 340 million grams.
On the supply side, the report used an average of three numbers — total wet weight produced, wet weight produced after waste removal and total packaged weight — to come up with the supply-to-demand ratio of 64:1 for regulated cannabis (or 9:1 for the state’s entire cannabis market). The report estimated 884 million grams of packaged cannabis will be produced by state-licensed businesses in 2023.
Due to the number of licensees and the sheer size of the state — roughly 70,000 square miles — “the amount of enforcement staff and funding necessary to regularly oversee these businesses is unattainable,” the report reads. “As such, the perceived risk of being ‘caught’ is likely low. Data from Oklahoma’s Bureau of Narcotics and Dangerous Drugs (OBNDD) support this theory, estimating that about 2,000 licensees are obtained fraudulently or are masking illicit sales.”
The state’s strategic response plan includes a multi-pronged approach to the oversupply problem, but focuses mostly on enforcement rather than reducing the supply within the regulated system. Strategies include utilizing regulatory technology to optimize enforcement, increasing OMMA’s presence regionally, optimizing supply tracking, discouraging casual entry into the market and a greater focus on licensee compliance.
“Through strategic partnerships, rigorous oversight, streamlined compliance monitoring, advancements of smart policies, and stakeholder engagement, we can foster an environment that promotes safety and prevents large-scale diversion,” OMMA executive director Adria Berry wrote in the strategic response report.
— Garrett Rudolph