How has Oklahoma's medical marijuana license moratorium affected dispensaries, industry?

They're passing joints — and loose flower, concentrates, topical creams, drinks, gummies and other edibles.

And they're passing patients.

With its high behind it, and licenses to operate continuing to plunge, the medical marijuana market in Oklahoma keeps shrinking , but every closed-down dispensary leaves another one or two to pick up clients, strengthening the survivors.

It's been something to look forward to, especially when dispensaries that close do so after being caught out of compliance with state law, said AJ Hunt, area director for The Peak Dispensary's three locations — two in Oklahoma City and one in Edmond.

She said The Peak has seen "a pretty steady increase" in patients since dispensaries started closing. The Peak's budtenders have been teaching new patients, perhaps accustomed to lax practices elsewhere, "the reasons we do things the way we do," Hunt said.

Licensing numbers are plummeting because of the moratorium on new commercial licenses until 2026, the implementation of seed-to-sale tracking to help officials know who is operating legally and who is not, as well as new laws and market saturation, said Porsha Riley, public relations manager for the Oklahoma Medical Marijuana Authority .

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The moratorium on licenses is taking its toll, but new medical marijuana businesses are still opening in Oklahoma

It's all unfolding according to plan for the moratorium on commercial licenses. No new grower, processor and dispensary licenses will be issued until 2026, as the bloated market shakes out.

New growers, processors and dispensaries can still open under the moratorium, however. State law allows licenses to be sold and transferred amongst business owners. Registrations with the Oklahoma Bureau of Narcotics and Dangerous Drugs Control cannot be transferred, however, Riley noted.

For example, Sunny Daze Dispensary , 200 W Second St. in Edmond, opened for business on April 20 — "420," or "4:20" — a day of celebration in cannabis culture , at a location previously occupied by Frontier Medicine, a dispensary that closed earlier this year.

"Through strategic, data-driven initiatives, we're working to ensure all participants in Oklahoma's medical marijuana industry adhere to rules and regulations and that patients have access to safe medical marijuana and medical marijuana products," Riley said.

RELATED: Oklahoma Medical Marijuana Authority cuts staff, citing short allocation, lower licensing

Inflation hits medical cannabis hard with marijuana prices in freefall

Inflation also has taken its toll on the cannabis business, said Corbin Wyatt, owner of Likewise Cannabis , which has two locations in Oklahoma City, one in Edmond and one in Stillwater.

"Inflation has been one of the biggest challenges in the cannabis industry — it is for everybody ― especially with (marijuana) prices still going down," Wyatt said.

He's cut back where he can, but not on staffing or pay so far.

"In my opinion, you can't take out economic factors on the workers. I think that's really shortsighted," he said. Especially in a budtending environment, "If your employees aren't happy, your customers aren't going to be happy."

Wyatt said he'd seen some patients come to Likewise from closed dispensaries, but not a rush. Most patients who have their preferred dispensary close go to the next nearest one, he said. That hasn't been difficult in urban and suburban environments with a high density of dispensaries.

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Closed cannabis dispensaries in Oklahoma backfill with new tenants; closed growers leave damaged industrial property

Dispensary density is thinning, and it should be no surprise considering the industry exploded after voters approved legalizing medical marijuana in 2018, said Jim Parrack, senior vice president and retail specialist with Price Edwards & Co., an OKC commercial property brokerage.

He said it's leaving vacancies for the real estate market to absorb in both the retail sector, with closed dispensaries, and industrial sector, with closed grow operations left in bad shape.

"We rushed into it with very few regulations in place," Parrack said. "With no barriers to entry, it invited both experienced and inexperienced operators to enter our market.

"The lack of regulation was even worse on the grow side, which invited foreign nationals to get involved. The net result: far too much product and stores for market demand. A weeding out, if you will, was inevitable. It's upon us now for both the retail dispensaries and the grow operations."

For retail landlords, the space isn't staying vacant long because of the strength of local retail. Even if replacement tenants pay less than the above-market rents often paid by dispensaries at peak demand, the former dispensary space is usually in good condition, Parrack said.

"For grow operation landlords, it’s a different story," he said. "Many of these buildings are left in poor condition, which happens with lots of water, humidity and abuse ― in essence, indoor farming. The good news is the buildings now have lots of electrical and water capacity, but the cost to get them marketable will be high. Fitting, it seems."

Medical marijuana growers, processors, transporters and dispensaries all down in once pot-booming Oklahoma

Here are the midyear license numbers by category, from Oklahoma Medical Marijuana Authority:

• Growers: 6,615, down 24.8% since Jan. 1; down 46.6% since July 1, 2023.
• Dispensaries: 2,023, down 15.3% since Jan 1; down 29% since July 1, 2023.
• Processors: 1,043, down 22.2% since Jan. 1; down 41.8% since July 1, 2023.
• Transportation: 78, down 32.2% since Jan 1; down 47.7% since July 1, 2023.

Medical marijuana licenses in Oklahoma take a dive as patient numbers waver

Here is a look at the stats that tell the tale of Oklahoma's medical marijuana industry:

• Total licensed businesses : 6,653 on July 1, down 22% since the first of 2024, and down 41% since July 2023, according to the Oklahoma Medical Marijuana Authority (OMMA).
• Number of patients: 341,496 on July 1, up 2.8% from Jan. 1, but down 3.4% from July 1, 2023, OMMA reported.
• The plunge in licensed businesses and a short budget caused the OMMA to prune its staff by 10%, between 25 and 30 employees.

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Senior Business Writer Richard Mize has covered housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Contact him at rmize@oklahoman.com. Sign up for his weekly newsletter, Real Estate with Richard Mize . You can support Richard's work, and that of his colleagues, by purchasing a digital subscription to The Oklahoman. Right now, you can get 6 months of subscriber-only access for $1 .

This article originally appeared on Oklahoman: How has Oklahoma's medical marijuana license moratorium affected dispensaries, industry?