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ENGROSSED SENATE
BILL NO. 1704 By: Paxton of the Senate
and
Lowe (Dick) of the House
[ medical marijuana - monitoring and disciplinary
actions - scope of penalties - inaccurate or
fraudulent reporting - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 63 O.S. 2021, Section 427.6, as
last amended by Secti on 11, Chapter 553, O.S.L . 2021, is amended to
read as follows:
Section 427.6. A. The State Department o f Health shall address
issues related to the medical m arijuana program in Oklahoma
including, but not limited to, monitoring and disciplinary actions
as they relate to the medica l marijuana program.
B. 1. The Department or its designee may perform on -site
inspections or investigations of a licensee or appli cant for any
medical marijuana business license , research facility, education
facility or waste disposal facility to determine compliance with
applicable laws, rules and regulations or submissions made pursuant
to this section. The Department may enter t he licensed premises of
a medical marijuana business , research facility, education facility
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or waste disposal facility licensee or applicant to assess or
monitor compliance or ensure qualifications for l icensure.
2. Post-licensure inspections shall be limited to twice per
calendar year. However, investigations and additional inspections
may occur when the Department believes an investigation or
additional inspection is ne cessary due to a possible violation of
applicable laws, rules or regulations . The State Commissioner of
Health may adopt rules imposing penalties including, but not limited
to, monetary fines and suspension o r revocation of licensure for
failure to allow the Authority reasonable access to the licensed
premises for purposes of conducting a n inspection.
3. The Department may review relevant records of a licensed
medical marijuana busi ness, licensed medical marijuana research
facility, licensed medical marij uana education facility or licensed
medical marijuana waste disposal facility , and may require and
conduct interviews with such persons or entities and persons
affiliated with such e ntities, for the purpose of determining
compliance with Department require ments and applicable laws , rules
and regulations.
4. The Department may refer complaints alleging criminal
activity that are made against a licensee to appropriate Oklahoma
state or local law enforcement auth orities.
C. Disciplinary action may be taken a gainst an applicant or
licensee for not adhering to applicable laws pursuant to the terms,
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conditions and guidelines set forth i n the Oklahoma Medical
Marijuana and Patient Protectio n Act.
D. Disciplinary actions may include revocation, suspension or
denial of an application, license or final authorization and other
action deemed appropri ate by the Department.
E. Disciplinary actions may be imposed upon a medical marijuana
business licensee for:
1. Failure to comply with or satisfy any provision o f
applicable laws, rules or regulat ions;
2. Falsification or misrepresentation of any mater ial or
information submitted to the Department or other licensees;
3. Failing to allow or impedi ng entry by authorized
representatives of the Department;
4. Failure to adhere to any acknowledgem ent, verification or
other representation made to the Depart ment;
5. Failure to submit or disclose information required b y
applicable laws, rules or regulat ions or otherwise requested by the
Department;
6. Failure to correct any violation of this secti on cited as a
result of a review or audit of financial records or other materials;
7. Failure to comply with requested access by the Department to
the licensed premises or materials;
8. Failure to pay a required monetary penalty;
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9. Diversion of medical marijuana or any medical marijuana
product, as determined by the Department;
10. Threatening or harming a medical marijuana patient
licensee, caregiver licen see, a medical practitioner or an employee
of the Department; and
11. Any other basis indicating a violation of the applicable
laws and regulations as identif ied by the Department.
F. Disciplinary actions against a licensee may include the
imposition of monetary penalties, which m ay be assessed by the
Department. The Department may suspend or revoke a license for
failure to pay any monetary penalty lawfully a ssessed by the
Department against a licensee.
G. Penalties for sales or, purchases or transfers of medical
marijuana by a medical marijuana business or employees or agents of
the medical marijuana busin ess to persons other than those allowed
by law occurring within any two-year one-year time period may
include an initial fine of One Thousand Dollars ($1,000.00) Five
Thousand Dollars ($5,000.00) for a first violation and a fine of
Five Thousand Dollars ($5,000.00) Fifteen Thousand Dollars
($15,000.00) for any subsequent violation . Penalties for grossly
inaccurate or fraudulent reporting occurring with in any two-year
time period may include an initial fine of Five Thousand Dol lars
($5,000.00) for a first violation and a fine of Ten Thousand Dollars
($10,000.00) for any subsequent violation . The medical marijuana
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business may shall be subject to a revoc ation of any license granted
pursuant to the Oklahoma Medical Marijuana and Patien t Protection
Act upon a showing that the violation was willful or grossly
negligent second violation of the business or any e mployee or agent
thereof.
H. 1. First offense for intentional and impermissible
diversion of medical marijuana, concentrate, or products by a
patient or caregiver to an unauthorized person shall not be punished
under a criminal statute but may be subject to a fine of Two Hundred
Dollars ($200.00).
2. The second offense for impermissible diversion of medical
marijuana, concentrate, or products by a patient or caregiver to an
unauthorized person sh all not be punished under a criminal statute
but may be subject to a fine of not to exceed Five Hundred Doll ars
($500.00) and may result in revocation of the license upon a showing
that the violation was willful or grossly negligent.
I. The intentional diversion of medical marijuana, medical
marijuana concentrate or medical marijuana products by a licensed
medical marijuana patient or caregiver, medical marijuana business
or employee of a medical marijuan a business to an unauthorized minor
person who the licensed medical marijuana patient or caregiver,
medical marijuana business or employee of a medical marijuan a
business knew or reasonably should have known to be a minor person
shall be subject to a cite and release citation and, upon a finding
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of guilt or a plea of no contest, a fine of Two Thousand Five
Hundred Dollars ($2,500.00). For a second or subsequent offense,
the licensed medical marijuana patient or caregiver, medical
marijuana business or empl oyee of a medical marijuana business shall
be subject to a cite and release citation and, upon a finding of
guilt or a plea of no contest, a fine of Five Thousa nd Dollars
($5,000.00) and automatic termination of the medical marijuana
license.
J. Nothing in this section shall be construed to prevent the
criminal prosecution, after the presentation of evidence and a
finding beyond a reasonable doubt, of a licensed medical marijuana
patient or caregiver, medical marijuana business or empl oyee of a
medical marijuana business who has diverted medical marijuana,
medical marijuana concentrate or medical marijuana products to an
unauthorized person with the intent or kno wledge that the
unauthorized person was to engage in the distribution or tr afficking
of medical marijuana, medical marijuana concentrate or medical
marijuana products.
K. In addition to any other remedies p rovided for by law, the
Department, pursuant to its rules and regulations, may issue a
written order to any licensee the De partment has reason to believe
has violated Sections 420 through 426.1 of this title, the Oklahoma
Medical Marijuana and Patient Prot ection Act, the Oklahoma Medical
Marijuana Waste Management Act, or any rules promulgated by the
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State Commissioner of Heal th and to whom the Dep artment has served,
not less than thirty (30) days p reviously, a written notice of
violation of such statutes o r rules.
1. The written order shall state with s pecificity the nature of
the violation. The Department may impose any disciplinary action
authorized under the provisions of this section including , but not
limited to, the assessment of monetary penalties.
2. Any order issued pursuant to the provisions of this section
shall become a final order unless, not more than thirty (30) days
after the order is served to the licensee, the licensee requests a n
administrative hearing in accordance with the rules and r egulations
of the Department. Upon such request, the Department shall promptly
initiate administrative proceedings.
L. Whenever the Department finds that an emergency exists
requiring immediate a ction in order to protect the health or welfare
of the public, the Department may issue an order, without pr oviding
notice or hearing, stating the existence of said emergency and
requiring that action be taken as the Department deems necessary to
meet the emergency. Such action may include, but is not limited to,
ordering the licensee to immediately cease and d esist operations by
the licensee. The order shall be effective immedia tely upon
issuance. Any person to whom the order is directed shall comply
immediately with the provisions of the order . The Department may
assess a penalty not to exceed Ten Thousand Dollars ($10,000.00) per
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day of noncompliance with the order . In assessing such a penalty,
the Department shall consider the seriousness of the vio lation and
any efforts to comply with applicable requiremen ts. Upon
application to the Department, the lice nsee shall be offered a
hearing within ten (10) days of the issuance of the order.
M. All hearings held pursuant to this section shall be in
accordance with the Oklahoma Administrative Procedures Act.
SECTION 2. This act shall be come effective November 1, 2022.
Passed the Senate the 23rd day of March, 2022.
Presiding Officer of the Senat e
Passed the House of Representatives the ____ day of __________,
2022.
Presiding Officer of the House
of Representatives