An Act
ENROLLED SENATE
BILL NO. 1704 By: Paxton of the Senate
and
Lowe (Dick) of the House
An Act relating to medical marijuana; amending 63
O.S. 2021, Section 427.6, as last amended by Section
1 of Enrolled Senate Bill No. 1367 of the 2nd Session
of the 58th Oklahoma Legislature, which relates to
the Oklahoma Medical Marijuana and Patient Protection
Act; authorizing the Oklahoma Medical Marijuana
Authority to revoke lice nses under certain
circumstances; amending 63 O.S. 2021, Section 427.14,
as last amended by Section 15 of Enrolled Senate Bill
No. 1543 of the 2nd Session of the 58th Oklahoma
Legislature, which relates to medical marijuana
business license; requiring licensees to submit
employees to acquire certain credentials pr ior to
employment; requiring employees of a medical
marijuana business licensee to obtain credentialing;
allowing Oklahoma Medical Marijuana Authority to
contract with third-party vendor to provide certain
services; directing Authority to determine services;
directing third-party vendor to conduct certain
functions for applicants; requiring third -party
vendor to issue certain credential; providing for
certain appeal; excluding third -party vendor from
certain liability; directing promulgation of rules;
providing for codification ; and providing an
effective date.
SUBJECT: Medical marijuana
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
ENR. S. B. NO. 1704 Page 2
SECTION 1. AMENDATORY 6 3 O.S. 2021, Section 427.6, as
last amended by Section 1 of Enrolled Senate Bill No. 1367 of the
2nd Session of the 58th Legislature , is amended to read as follows:
Section 427.6. A. The Oklahoma Medical Marijuana Authority
shall address issues related t o the medical marijuana program in
this state including, but not limited to, monitoring and
disciplinary actions as they relate to the medical marijuana
program.
B. 1. The Authority or its designee may perform on -site
inspections or investigations of a l icensee or applicant for any
medical marijuana business license, research fac ility, education
facility or waste disposal facility to determine compliance with
applicable laws, rules and regulations or submissions made pursuant
to this section. The Authori ty may enter the licensed premises of a
medical marijuana business, research facility, education facility or
waste disposal facility licensee or applicant to assess or monitor
compliance or ensure qualifications for licensure.
2. Post-licensure inspection s shall be limited to twice per
calendar year. However, investigations and a dditional inspections
may occur when the Authority believes an investigation or additional
inspection is necessary due to a possible violation of applicab le
laws, rules or regulat ions. The State Commissioner of Health may
adopt rules imposing penalties in cluding, but not limited to,
monetary fines and suspension or revocation of licensure for failure
to allow the Authority reasonable access to the licensed premises
for purposes of conducting an inspection.
3. The Authority may review relevant records of a licensed
medical marijuana business, licensed medical marijuana research
facility, licensed medical marijuana education facility or licensed
medical marijuana waste disposal faci lity, and may require and
conduct interviews wit h such persons or entities an d persons
affiliated with such entities, for the purpose of determining
compliance with Authority requirements and applicable laws, rules
and regulations.
4. The Authority may re fer complaints alleging criminal
activity that are made against a licensee to appropriate state or
local law enforcement authorities.
ENR. S. B. NO. 1704 Page 3
C. Disciplinary action may be taken against an applicant or
licensee for not adhering to applica ble laws pursuant to the terms,
conditions and guidelines set forth in th e Oklahoma Medical
Marijuana and Patient Protection Act.
D. Disciplinary actions may include revocation, suspension or
denial of an application, license or final authorization and ot her
action deemed appropr iate by the Authority.
E. Disciplinary actions may be imposed upon a medical marijuana
business licensee for:
1. Failure to comply with or satisfy any provision of
applicable laws, rules or regulations;
2. Falsification or misre presentation of any mater ial or
information submitted to the Authority or other licensees;
3. Failing to allow or impeding entry by authorized
representatives of the Authority;
4. Failure to adhere to any acknowledgement, verification or
other representation made to the Authorit y;
5. Failure to submit or disclose information required by
applicable laws, rules or regulations or otherwise requested by the
Authority;
6. Failure to correct any violation of this section cited as a
result of a review or audit of financial records or other materials;
7. Failure to comply with requ ested access by the Author ity 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 A uthority;
ENR. S. B. NO. 1704 Page 4
10. Threatening or harming a medical marijuana patient
licensee, caregiver licensee, a medical practitioner or an employee
of the Authority; and
11. Any other basis indicating a violation of the applicable
laws and regulations as identified by the Authority.
F. Disciplinary actions against a licensee may includ e the
imposition of monetary penalties, which may be assessed by the
Authority. The Authority may suspend or revoke a license for
failure to pay any monetary pen alty lawfully assessed by the
Authority against a licensee.
G. Penalties 1. In addition to any other penalties prescribed
by law, penalties for sales, purchases or transfers for value of
medical marijuana by a medical marijuana business or employees or
agents of the medical mari juana business to persons other than those
allowed by law occurring within any one-year time period may include
an initial fine of Five Thousand Dollars ($5,000.00) for a first
violation and a fine of Fifteen Thousand Dollars ($15, 000.00) for
any subsequent violation.
2. Penalties for grossly inaccur ate or fraudulent rep orting
occurring within any two -year time period may include an initial
administrative fine of Five Thousand Dollars ($5,000.00) for a first
violation and an admini strative fine of Ten Th ousand Dollars
($10,000.00) for any subsequent v iolation. The medica l marijuana
business shall be subject to a revocation of any license granted
pursuant to the Oklahoma Medical Marijuana and Patient Protection
Act upon a second inc ident of grossly inaccu rate or fraudulent
reporting in a ten-year period by the medical mari juana business or
any employee or agent thereof.
3. After investigation by the Authority, the Authority may
revoke the license of any person directly involved with the
diversion of marijuana.
4. If the Authority, after investigation, is able to establish,
by a preponderance of evidence, a pattern of diversion or negligence
leading to diversion, the Authority may revoke any business licenses
associated with the dive rsion and any entity wi th common ownership.
ENR. S. B. NO. 1704 Page 5
H. 1. In addition to any other penalties prescribed by law, a
first offense for intentional and impermissible diversion of medical
marijuana, medical marijuana concentrate, or medical marijuana
products for value by a patient or care giver to an unauthorized
person shall be subject to an administrative fine of not less than
Four Hundred Dollars ($400.00). The Authority shall have the
authority to enforce the provisions of this subsection.
2. In addition to any other penalties prescri bed by law, an
additional incident resulting in a second offense for impermissible
diversion of medical marijuana, medical marijuana concentrate, or
medical marijuana products by a patient or caregiver to an
unauthorized person for v alue shall be subject t o an administrative
fine of not less than One Thousand Dollars ($1,000.00), and shall
result in revocation of the license or licenses of the person.
3. Any person who shares less than three (3) grams of medical
marijuana with an una uthorized person, witho ut the transfer being
for value or other consideration, shall not be subject to criminal
prosecution but shall be subject to an administrative fine of Four
Hundred Dollars ($400.00).
I. The intentional diversion of medical marijuana , medical
marijuana concentrate or medical marijuana products by a lice nsed
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 pa tient or caregiver,
medical marijuana business or employee of a medical marijuana
business knew or reasonably should have known to be a minor person
shall be subject to an administrative fine of Two Thousa nd Five
Hundred Dollars ($2,500.00). For an additi onal incident resultin g
in a second or subsequent offense, the license d medical marijuana
patient or caregiver, medical marijuana business or employee of a
medical marijuana business shall be subject to a cite and release
citation and, upon a finding of gu ilt or a plea of no co ntest, a
fine of Five Thousand Dollars ($5,000.0 0) and automatic revocation
of the medical marijuana license.
J. In addition to any other remedies provided for by law, the
Authority, pursuant to its rules and regulations, may issue a
written order to any licensee the Authority has reason to believe
has violated Sections 420 through 426.1 of this title, the Oklahoma
ENR. S. B. NO. 1704 Page 6
Medical Marijuana and Patient Protection Act, the Oklahoma Medical
Marijuana Waste Management Act, or any rules promulgat ed by the
State Commissioner of Health and to whom the Authority has served,
not less than thirty (30) days previously, a written notice of
violation of such statutes or rules.
1. The written order sha ll state with specificity the nature of
the violation. The Authority 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 t he provisions of this section
shall become a final ord er unless, not more than thirty (30) days
after the order is served to the licensee, the licensee requests an
administrative hearing in accordance with the rules and regulations
of the Authority. Upon such request, the Authority shall promptly
initiate administrative proceedings.
K. Whenever the Authority finds that an emergency exists
requiring immediate action in order to protect the health or welfare
of the public, the Authority may issue an order, without providing
notice or hearing, stating the exist ence of said emergency and
requiring that action be taken as the Authority deems necessary to
meet the emergency. Such action may include, but is not limited to,
ordering the licensee to immediately c ease and desist operations by
the licensee. The order shall be effective immediately upon
issuance. Any person to whom t he order is directed shall comply
immediately with the provisions of the order. The Authority 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 Authority shall c onsider the seriousness of the violation and
any efforts to comply with applicable requirements. Upon
application to the Authority, t he licensee shall be offered a
hearing within ten (10) days of the issuance of the order.
L. All hearings held pursuant t o this section shall be in
accordance with the Oklahoma Administrative Procedures Act.
SECTION 2. AMENDATORY 63 O.S. 2021, Section 427.14, as
last amended by Section 15 of Enrolled Senate Bill No. 1543 of the
2nd Session of the 58th Oklahoma Legislature, is amended to read a s
follows:
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Section 427.14. A. There is hereby crea ted the medical
marijuana business license, which shall include the following
categories:
1. Medical marijuana commercial grower;
2. Medical marijuana processor;
3. Medical marijuana dispensary;
4. Medical marijuana transporter; and
5. Medical marijuana testing laboratory.
B. The Oklahoma Medical Marijuana Authority, with the aid of
the Office of Management and Enterprise Services, shall develop a
website for medical marijuana business applications.
C. The Authority shall make available on its websit e in an
easy-to-find location, applications for a medical marijuana
business.
D. The annual, nonrefundable application fee for a medical
marijuana business license shall be Two Thousand Five Hundred
Dollars ($2,500.00).
E. All applicants seeking licensur e or licensure renewal as a
medical marijuana business shall comply with the following general
requirements:
1. All applications for licenses and registrations authorized
pursuant to this section shall be made upon forms prescribed by the
Authority;
2. Each application shall identify the city or county in which
the applicant seeks to obtai n licensure as a medical marijuana
business;
3. Applicants shall submit a complete application to the
Authority before the application may be accep ted or considered;
ENR. S. B. NO. 1704 Page 8
4. All applications shall be complete and accurate in every
detail;
5. All applications shall include all attachments or
supplemental information required by the forms supplied by the
Authority;
6. All applications shall be accompanie d by a full remittanc e
for the whole amount of the application fees. Application fees are
nonrefundable;
7. All applicants shall be approved for licensing review that,
at a minimum, meets meet the following criteria:
a. twenty-five (25) years of age or older ,
b. if applying as an individual, proof that the applicant
is a resident of this state pursuant to paragraph 11
of this subsection,
c. if applying as an entity, proof that seventy-five
percent (75%) of all members, managers, executive
officers, partners, board m embers or any other form of
business ownership are residents of this state
pursuant to paragraph 11 of this subsection,
d. if applying as an individual or entity, proof that the
individual or entity is registered to conduct business
in this state,
e. disclosure of all ownership interests pursu ant to the
Oklahoma Medical Marijuana and Patient Protection Act,
and
f. proof that the medical marijuana business, medical
marijuana research facility, medical marijuana
education facility and medical marijuana waste
disposal facility applicant or license e has not been
convicted of a nonviolent felony in the last two (2)
years, or any other felony conviction within the last
five (5) years, is not a current inmate in the custody
ENR. S. B. NO. 1704 Page 9
of the Department of Corrections, or currently
incarcerated in a jail or correc tions facility;
8. There shall be no limit to the number of medical marijuana
business licenses or categories that an individual or entity can
apply for or receive, although each applica tion and each category
shall require a separate application and appl ication fee. A
commercial grower, processor and dispensary, or any combination
thereof, are authorized to share the same address or physical
location, subject to the restrictions set fort h in the Oklahoma
Medical Marijuana and Patient Protection Act;
9. All applicants for a medical marijuana business license,
research facility license or education facility license authorized
by the Oklahoma Medical Marijuana and Patient Protection Act, or for
a renewal of such license, shall undergo a state criminal history
background check conducted by the Oklahoma State Bureau of
Investigation (OSBI) within thirty (30) days prior to the
application for the license including:
a. individual applicant s applying on their own behalf,
b. individuals applying on behalf of an entity,
c. all principal officers of an entity, and
d. all owners of an entity as defined by the Oklahoma
Medical Marijuana and Patient Protection Act;
10. All applicable fees charged by the OSBI are the
responsibility of the applicant and shall not be higher than fees
charged to any other person or industry for such background checks;
11. In order to be considered a resident of this state for
purposes of a medica l marijuana business application, all applicants
shall provide proof of state residency for at least two (2) years
immediately preceding the date of application or five (5) years of
continuous state residency during the preceding twenty -five (25)
years immediately preceding the date of application. Sufficient
documentation of proof of state residency shall include a
combination of the following:
ENR. S. B. NO. 1704 Page 10
a. an unexpired state-issued driver license,
b. a state-issued identification card,
c. a utility bill preceding the date of appli cation,
excluding cellular telephone and Internet bills,
d. a residential property deed to property in this state,
and
e. a rental agreement p receding the date of application
for residential property located in this state.
Applicants that were issued a medical marijuana business license
prior to August 30, 2019, are hereby exempt from the two-year or
five-year state residence requirement menti oned above;
12. All license applicants shall be required to submit a
registration with the Oklahoma State Bureau of Narcotics and
Dangerous Drugs Control as provided in Sections 2-302 through 2-304
of this title;
13. All applicants shall establish their identity through
submission of a color copy or digital image of one of the following
unexpired documents:
a. front of a state-issued driver license,
b. front of a state-issued identification card,
c. a United States passport or othe r photo identification
issued by the United States government, or
d. a tribal identification card approved for
identification purposes by the Department of Public
Safety; and
14. All applicants shall submit an applicant photograph.
F. The Authority shall review the medical marijuana business
application; approve, reject or deny the application; and mail the
ENR. S. B. NO. 1704 Page 11
approval, rejection, denial or status-update letter to the applicant
within ninety (90) business days of receipt of the application.
G. 1. The Authority shall review the medical marijuana
business applications and conduct all investigations, inspections
and interviews before approving the application.
2. Approved applicants shall be issued a medical marijuana
business license for the specifi c category applied under, which
shall act as proof of their approved status. Rejection and denial
letters shall provide a reason for the rejection or denial.
Applications may only be rejected or denied based on the applicant
not meeting the standards set forth in the provisions of the
Oklahoma Medical Marijuana and Patient Protection Act and Sections
420 through 426.1 of this title, improper completion of the
application, or for a reason provided for in the Oklahoma Medical
Marijuana and Patient Protectio n Act and Sections 420 through 426.1
of this title. If an application is rejected for failure to provide
required information, the applicant shall have thirty (30) days to
submit the required information for reconsideration. No additional
application fee shall be charged for such reconsideration. Unless
the Authority determines otherwise, an application that has been
resubmitted but is still incomplete or contains errors that are not
clerical or typographical in nature shall be denied.
3. Status-update letters shall provide a reason for delay in
either approval, rejection or denial should a situation arise in
which an application was submitted properly but a delay in
processing the application occurred.
4. Approval, rejection, denial or statu s-update letters shall
be sent to the applicant in the same method the application was
submitted to the Authority.
H. A license for a medical marijuana business, medical
marijuana research facilit y, medical marijuana education facility or
medical marijuana waste disposal facility shall not be issued to or
held by:
1. A person until all required fees have been paid;
ENR. S. B. NO. 1704 Page 12
2. A person who has been convicted of a nonviolent felony
within two (2) years of the date of application, or within five (5)
years for any other felony;
3. A corporation, if the crimina l history of any of its
officers, directors or stockholders indicates that the officer,
director or stockholder has been convicted of a nonviolent fe lony
within two (2) years of the date of applicati on, or within five (5)
years for any other felony;
4. A person under twenty-five (25) years of age;
5. A person licensed pursuant to this section who, during a
period of licensure, or who, at the time o f application, has failed
to:
a. file taxes, interest or penalties due related to a
medical marijuana busines s, or
b. pay taxes, interest or penalties due related to a
medical marijuana business;
6. A sheriff, deputy sheriff, police officer or prosecuting
officer, or an officer or employee of the Authority or municipality;
7. A person whose authority to be a ca regiver, as defined in
Section 427.2 of this title, has been revoked by the Authority; or
8. A person who was involved in the management or operations of
any medical marijuana business, m edical marijuana research facility,
medical marijuana education facility or medical marijuana waste
disposal facility that, after the initiation of a disciplinary
action, has had a medical marijuana license re voked, not renewed, or
surrendered during the f ive (5) years preceding submission of the
application and for t he following violations:
a. unlawful sales or purchases,
b. any fraudulent acts, falsification of records or
misrepresentation to the Authority, medical marijuana
patient licensees, caregiver l icensees or medical
marijuana business licensees,
ENR. S. B. NO. 1704 Page 13
c. any grossly inaccurate or fraudulent reporting,
d. threatening or harming any medical marijuana patient,
caregiver, medical practitioner or employee of the
Authority,
e. knowingly or intentionally refusing to permit the
Authority access to premises or records,
f. using a prohibited, hazardous substance for processing
in a residential area,
g. criminal acts relating to the operation of a medical
marijuana business, or
h. any violations that endanger public health and safety
or product safety.
I. In investigating the qualifications of an applicant or a
licensee, the Authority and municipalities may have access to
criminal history record information furnished by a criminal justice
agency subject to any restrictions imposed by such an ag ency.
J. The failure of an applicant or licensee to provide the
requested information by the Authority deadline may be grounds for
denial of the application.
K. All applicants and licensees shall submit information to the
Authority in a full, faithful, truthful and fair manner. The
Authority may recommend denial of an application where the applicant
or licensee made misstatements, omissions, mis representations or
untruths in the application or in connection with the backgrou nd
investigation of the applicant. This type of conduct may be grounds
for administrative action against the applicant or licensee. Typos
and scrivener errors shall not be g rounds for denial.
L. A licensed medical marijuana business premises shall be
subject to and responsible for compliance with applicable provisions
consistent with the zoning where such business is located as
described in the most recent versions of the Ok lahoma Uniform
Building Code, the International Building Code and the International
ENR. S. B. NO. 1704 Page 14
Fire Code, unless granted an exemption by a municipality or
appropriate code enforcement entity.
M. All medical marijuana business, medical marijuana research
facility, medical marijuana education facility and medical marijuana
waste disposal facility licensees shall pay the relevant licensure
fees prior to receiving licensure to operate.
N. A medical marijuana business, medical marijuana research
facility, medical marijuana education fac ility or medical marijuana
waste disposal facility that attempts to renew its license after the
expiration date of the license shall pay a late renewal fee in an
amount to be determined by the Executive Director of the Authority
to reinstate the license. Late renewal fees are nonrefundable. A
license that has been expired for more than ninety (90) days shall
not be renewed.
O. No medical marijuana business, medical marijuana research
facility, medical marijuana education facility or medical mari juana
waste disposal facility shall possess, sell or t ransfer medical
marijuana or medical marijuana products without a valid, unexpired
license issued by the Authority.
P. A medical marijuana business license holder shall require
all individuals employed under their license to be issued a
credential pursuant to the provisions of Section 3 of this act prior
to employment.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 427. 14a of Title 63, unless
there is created a duplication in numbering, reads as follows:
A. Beginning January 1, 2024, the Oklahoma Medical Marijuana
Authority shall require employees of a medical marijuana business
licensee to apply for and receive a credential authorizing the
employee to work in a li censed medical marijuana business.
B. The Authority may contract with one or more third-party
vendors to provide the credentialing services necessary to carry out
the provisions of this section.
ENR. S. B. NO. 1704 Page 15
C. The Authority shall determin e the services to be provided by
such third-party vendor and shall establish costs and prices. If
contracted for credentialing services, a third-party vendor shall on
behalf of the Authority conduct the background checks and verify
eligibility and suitability for any employees of a medical marijuana
business license holder to obtain a credential .
D. Upon successful completion by the third -party vendor of the
statutorily required background checks and verificatio n of
eligibility and suitability for a n employee, the third-party vendor
shall issue a credential to the employee. The results of background
checks and verificat ions shall be provided to the Authority by the
third-party vendor.
E. If the third-party vendor determines that an employee of a
medical marijuana business holder does not meet the minimum
statutory requirements for a credential, the applicant or employee
shall have no recourse against the third-party vendor but may appeal
such adverse determination to the Authority.
F. The third-party vendor shall not be civilly liable to an
applicant, licensee, or employee of a licensee for any acts taken in
good-faith compliance with the pr ovisions of Section 420 et seq. of
Title 63 of the Oklahoma Statutes and the Oklahoma Medical Marijuana
and Patient Protection Act and the rules promulgated by the Oklahoma
Medical Marijuana Authority .
G. The Executive Director of the Authority may promulgate rules
to implement the provisions of this section.
SECTION 4. This act shall beco me effective November 1, 2022.
ENR. S. B. NO. 1704 Page 16
Passed the Senate the 17th day of May, 2022.
Presiding Officer of the Senat e
Passed the House of Representatives the 19th day of May, 2022.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _______________________________ __
Approved by the Governor of the State of Oklahoma this _____ ____
day of _________________ __, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY O F STATE
Received by the Office of the Secretary of State this _______ ___
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _______________________________ __