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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
COMMITTEE SUBSTITUTE
FOR ENGROSSED
SENATE BILL NO. 1704 By: Paxton of the Senate
and
Lowe (Dick) of the House
COMMITTEE SUBSTITUTE
An act relating to medical marijuana; amending 63
O.S. 2021, Section 427.6, which relates to the
Oklahoma Medical Marijuana and Patient Protection
Act; clarifying penalties for certain unlawful acts;
increasing fine amounts; authorizing the Oklahoma
Medical Marijuana Authority to revoke licenses under
certain circumstances; and declaring an emergency .
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 Section 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 a ctions
as they relate to the medica l marijuana program.
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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 facilit y
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 business, 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 entities, for the purpose of determining
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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,
conditions and guidelines set forth in the Oklahoma Medical
Marijuana and Patient Pr otection 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 impeding entry by authorized
representatives of the Department;
4. Failure to adhere to any acknowledgem ent, verification or
other representation made to the Depart ment;
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5. Failure to submit or disclose information required b y
applicable laws, rules or regulations 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;
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 licensee, 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 In addition to any other penalties prescribed by
law, penalties for sales or, purchases, or transfers for value of
medical marijuana by a medical marijuana business or employees or
agents of the medical marijuana busin ess to persons other than those
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allowed by law occurring within any two-year time period may include
an initial administrative fine of One Thousand Dollars ($1,000.00)
Five Thousand Dollars ($5,000.00) for a first violation and a an
administrative fine of Five Thousand Dollars ($5,000.00) Fifteen
Thousand Dollars ($15,000.00) for any subsequent violation occurring
within any two-year time frame.
1. Penalties for grossly inaccurate or fraudulent reporting
occurring within any two-year time period may include an initial
administrative fine of Five Thousand Dol lars ($5,000.00) for a first
violation and a an administrative fine of Ten Thousand Dollars
($10,000.00) Fifteen Thousand Dollars ($15,000.00) for any
subsequent violation occurring within any two-year time frame.
2. After investigation by the Authority, the Authority may
revoke the license of any person d irectly involved with the
diversion of marijuana.
3. If the Authority, after investigation, can show by a
preponderance of the e vidence a pattern of diversion or negligence
leading to diversion, the Authori ty shall revoke the bus iness
licenses associated with the diversion and any entity with common
ownership.
4. The medical marijuana business may be subject to a
revocation of any license granted purs uant to the Oklahoma Medical
Marijuana and Patien t Protection Act upon a showing that the
violation was willful or grossly negligent second incident of
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grossly inaccurate or fraudulent reporting in a ten -year period by
the business or any e mployee or agent thereof.
H. 1. First offense for intentional and impermissible
diversion of medical marijuana, concentr ate, 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 shall not be punished under a crimina l 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, medic al
marijuana concentrate or medical marijuana products by a licensed
medical marijuana patient or caregiver, medical marijuana business
or employee of a medical marijuana 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
of guilt or a plea of no contest, a fine of Tw o Thousand Five
Hundred Dollars ($2,500.00). For a second or subsequent offense,
the licensed medical marijuana patient or caregiver, medical
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marijuana business or employee of a medical marijuana business shall
be subject to a cite and release citation an d, 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 presen tation of evidence and a
finding beyond a reasonable doubt, of a licensed medical marijuana
patient or caregiver, medical marijuana business or em ployee of a
medical marijuana business who has diverted medical marijuana,
medical marijuana concentrate or me dical marijuana products to an
unauthorized person with the intent or kno wledge that the
unauthorized person was to engage in the distribution or trafficking
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 D epartment 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
State Commissioner of Hea lth and to whom the Department has served,
not less than thirty (30) days previously, a written notice of
violation of such statutes o r rules.
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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 assessmen t 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 an
administrative hearing in accorda nce 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 action in order to protect the healt h 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 th e order. The Department may
assess a penalty not to exceed Ten Thousand Dollars ($10,000.00) per
day of noncompliance with the order. In assessing such a penalty,
the Department shall consider the seriousness of the violation and
any efforts to comply wi th applicable requiremen ts. Upon
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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 Administrati ve Procedures Act.
SECTION 2. This act shall be come effective November 1, 2022.
COMMITTEE REPORT BY: C OMMITTEE ON ALCOHOL, TOBACCO AND CONTROLLED
SUBSTANCES, dated 04/14/2022 - DO PASS, As Amended.