Oklahoma’s dispensary licenses are falling for the primary time because the medical hashish market opened

The number of retail licenses in the Oklahoma marijuana market decreased 8% last year, from 2,238 licenses in 2019 to 2,057 licenses in 2020.

Oklahoma’s Medical Cannabis Program: The Numbers

In 2020, Oklahoma, along with states like Colorado and Illinois, had record sales of cannabis for the year. Oklahoma patients bought over $ 830 million worth of medical marijuana, doubling the $ 345 million accumulated in 2019.

The increase in sales is likely due to the huge increase in the number of Oklahomians enrolled in the state’s medical marijuana program – from 220,000 patients in January to over 365,000 patients by December 2020. And these new patients generated a significant amount of tax revenue for the state Sooner. While cannabis retailers generated around $ 30 million in state and local taxes in 2019, that number rose to $ 71.6 million in 2020.

Despite the projection-shaking year in the marijuana market in Oklahoma, the total number of pharmacy licenses in the state declined for the first time since medical cannabis was legalized in 2018. Although the Oklahoma Medical Marijuana Authority issued over 550 new approvals in 2020, the total retail licenses fell 181.

That appears to be the only downward trend statistic, however, as Oklahoma still led the nation in retail licenses last year with 2,057 registered licenses in the state. Colorado was behind more than a thousand with 1,024 reported licenses. According to Cannabiz Media, a cannabis marketing platform and license database, the rest of the top 7 rounds out as follows:

3. California – 719 licenses

4. Oregon – 710 licenses

5. Michigan – 540 licenses

6. Washington – 483 licenses

7. Florida – 307 licenses

The decline in licensing numbers in Oklahoma contradicts the trend towards other legal cannabis markets in the United States. Leading markets like California, Colorado, and Oregon continue to add licenses at a constant rate. So why the unusual decline in Oklahoma? A look at the number of inactive retail licenses in the state can provide insight into the problem.

835 retail licenses went inactive in Oklahoma between 2018 and 2020, with 21% of those licenses going inactive last year. While licenses can go inactive for a variety of reasons, the most common problem is extreme competition and saturation in the marketplace. Looking at the number of retail licenses by city in Oklahoma, local competition among retailers appears to be fierce:

1. Oklahoma City – 371 retail licenses

2. Tulsa – 191 retail licenses

3. Norman – 63 retail licenses

4. Edmond – 60 retail licenses

5. Lawton – 57

6. Blanchard – 46

7. Ardmore – 41

8. Muskogee – 34

9. Broken Arrow – 34

10. Moors – 32

Given the oversaturation of the market, experts in the cannabis industry say a contraction was inevitable.

What industry experts say about the decline in weed royalty licenses in Oklahoma

“Oklahoma has more licensed pharmacies than Walmart, McDonald’s and Starbucks combined,” said Bud Scott, executive director of the Oklahoma Cannabis Industry Association. “To say there is retail saturation is an understatement.”

With such a large number of pharmacies opened in such a short time, a correction will have to be made at some point. Many leading companies in the cannabis industry, including Cannabiz Media co-founder and chief data officer Ed Keating, believe the market correction began with the decline in licenses in 2020.

“Ever since we saw the licensed juggernaut from Oklahoma, we knew that there would be a rights issue at some point,” said Keating. “The market can only support so many companies.”

Pharmacy owners are well aware of the saturated state of the marijuana market. Denise Mink owns Med Pharm’s medical pharmacy in Tulsa – an area that has nearly 200 retail licenses. There are a number of pharmacies nearby in their facility that act as healthy competition. However, Denise has seen even more closeness since she opened the doors of Med Pharm in 2019.

“One pharmacy is closing and within a month a new one will show up in the same place,” said Denise. Industry experts believe the landscape of the Oklahoma marijuana market will continue to change rapidly. As the market matures and expands, franchises and multi-state companies are sure to grow in importance, and independent pharmacies will have an even harder time competing. Until then, Oklahoma will remain the wild west of legal marijuana.

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