Spreadsheets and a lot of trust has enabled Oklahoma’s illicit cannabis market to thrive…
Between long drags on a Marlboro Red, Joe looked up at me and said, “The last Oregon growers we met were slinging pounds at the dispensaries here… And it was way more than just a couple pounds. It was a truck full!”
Of course, selling cannabis across state lines is certainly not legal.
But in a market like Oklahoma – which has the most relaxed regulations in the United States – it’s not rare, either.
I mention this because it’s a different story than you’ve been hearing about Oklahoma.
People want to focus on the fact that it’s a $350 million market…
Or that it’s the fastest-growing medical state thanks to its “free market” approach…
Or any number of details that can easily be found on the internet.
But that doesn’t tell you a thing about what’s happening on the ground, what the product is like, or how those rules (or lack thereof) shape the market.
A $350 Million Industry Powered by Junk
We’re setting up a 13,500-square-foot cultivation operation right outside of Oklahoma City.
To feel comfortable making that kind of investment, I had to dive deep into the market to truly understand what was going on.
I’ve driven from Tulsa to Lake Texoma; to the reservations out in Tahlequah and back up to Oklahoma City. I’ve been in more dispensaries there than I can count and checked out all the products on the shelves.
But what I saw in Tulsa really hammers home the state of the cannabis market in Oklahoma.
I was there for just a few days. But in that time, I visited enough dispensaries to see a $350 million industry thriving on horrible products.
One store was especially bad.
All the flower on display – and I do mean every single strain – was old and brown. There was no clear difference from one to the other. It all smelled like a mix of dead grass and wet hay. Certainly, nothing I would ever recommend that anyone consume. Especially not medicinally.
I’ve seen a lot of buds in my years of running a medical grow facility and owning a recreational dispensary. What I saw in this store looked like the outdoor harvests that happened last year in neighboring states (Oregon, Colorado, and California).
As I’d grow to learn, Oklahoma is filled with a lot of small dispensaries, mostly carrying bad products.
The state’s “free market” approach to cannabis licensing made it easy for anyone to legally grow or sell cannabis, including people who had no idea what they were doing.
And believe me, you can tell.
There are a lot of bad products. They’re expensive. And because the consumer in Oklahoma hasn’t had access to properly grown cannabis (like in West Coast states), they buy this less-than-stellar product at marked-up prices.
It’s just one way that Oklahoma’s “free market” approach has shaped its cannabis market.
The other way is in how it enables a thriving black market.
Inside Oklahoma’s Thriving Illicit Cannabis Market
The story I told you earlier about Oregon growers selling pounds in Oklahoma? Light regulation is what enabled that to happen.
You see, there is no real seed-to-sale tracking in Oklahoma (at least, not yet). There are spreadsheets and a lot of trust.
Regulators are so busy that they often don’t have time to verify compliance. As a result, the market is left to “self-regulate,” which is a funny expectation from an industry that is still not federally legal.
As you might expect, rules are broken all the time.
After all, what sold for $1,000 in Oregon or Colorado could fetch twice that in Oklahoma. Which explains why the product quality was so bad on so many shelves in Tulsa.
But what happens if regulations tighten up and out-of-state products can no longer make it onto store shelves? Prices will go up.
It’s what I expect to take place. Possibly by the end of 2021.
An initiative to legalize recreational cannabis in the state is likely to hit the ballot this year. And just about every person I spoke to in the state expects it to pass.
Not only would this expand the market dramatically, but it would also place a moratorium on new licenses for two years.
That means, once the recreational floodgates open, prices should go up and stay high for a long time. That’s great news for the existing players in the state.
While the cannabis market is in its infancy in Oklahoma, the future is looking good. Especially for those companies that excel at product choice and brand identity.
Fact is, pinpointing the best opportunities in cannabis comes down to having the right knowledge – and nowhere on the planet will you find a more detailed and comprehensive database of cannabis stocks than right here.
This kind of information is not available to everyone, and it could be the only difference between you and your next million-dollar opportunity.
To see how you can get immediate access, click here.
Advisory Board Member, National Institute for Cannabis Investors
[RECOMMENDED READING] According to venture capital and tech expert Michael Robinson, the key to the cannabis industry is “giving cannabis consumers the options they want when legalization rolls out and taxing cannabis products fairly so there is no reason to ever turn to the black market.” Get this expert’s full take on the issue.
2 responses to “How Lax Regulations Have Allowed Oklahoma’s Black Market to Thrive”
April 15 2020