Oklahoma medical marijuana regulators sued for prosecuting seed gross sales

An Oklahoma medical marijuana operator filed a lawsuit to halt the implementation of a program to track sales of seeds in the state on April 30, raising questions about its legality.

The Tulsa-based DR Z Leaf lawsuit, seeking class action status, questions whether the Oklahoma Department of Health has exceeded its legal authority to implement a seed-selling program and have over 10,000 MMJ licensees paying for the program are obliged.

The lawsuit, filed this week in Okmulgee District Court, also questions whether the contract between the state and Metrc in Florida “constitutes the creation of an unlawful monopoly.”

The legal challenge reflects the tension between some medical marijuana companies in Oklahoma and the state over increasing regulations and the cost of meeting those standards.

According to the state, Oklahoma had 10,587 active licenses for the medical marijuana business as of March 2.

Oklahoma launched a wide-open medical cannabis market in 2018. However, since then, in large part, additional regulations have been enacted to comply with industry best practices.

Terri Watkins, spokeswoman for the Oklahoma Medical Marijuana Authority (OMMA), told the Marijuana Business Daily on Friday that the state is not commenting on any pending litigation.

Metrc spokeswoman Bronwyn Flores also declined to comment on the lawsuit, which lists only the state and OMMA as defendants.

KOKH, an Oklahoma City subsidiary of Fox TV, quoted several MMJ operators complaining about the tracking program, including the prices charged by Metrc.

RFID tags cost 45 cents per plant for growers and 25 cents per pack for wholesalers.

Flores told MJBizDaily that Metrc’s software and plant tag fees are standard in the 16 markets it serves.

Metrc has seed-to-sale agreements in 15 states including Oklahoma and Washington DC.

Seed-to-sale tracking systems in government-approved marijuana markets are operated by a software provider, so there is a centralized system for inventory tracking. The contract for the provider is awarded according to a tendering process.

The Metrc system replaces mandatory monthly reports that medical marijuana companies in Oklahoma have sent to OMMA.

Many companies have produced these reports on paper, so switching to an electronic system has been a costly adjustment for some. Metrc has conducted training on its system.

“There are always challenges in a market that has already been established with a lot of questions from (companies) and rightly so,” said Flores.

From Metrc’s point of view, however, the implementation went well.

– Jeff Smith

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