Stiff Competition in Store for OK Growers and Dispensaries

close up of marijuana plant growing

Oklahoma's popular medical marijuana measure has surprised nearly everyone in the rest of the United States. The bill on the ballot garnered decent support with 57 percent of voters approving it. Perhaps the most shocking facet of the vote is the speed with which medical cannabis in Oklahoma is being rolled out. Where most states have floundered and been bogged down by stodgy regulations and political waffling, Oklahoma is forging forward full-steam ahead.



A Tight Timeframe

3 jars of cannabis

Six months after the medical marijuana bill passed, growers and producers are getting licensed at breakneck speeds. The state has also granted nearly 750 licenses to dispensaries. Not all of these dispensaries are up and running, and hundreds will likely fail before they ever open their doors – but the sheer number of licenses granted is a little mind-blowing. Within four months of the bill passing, a few of the first dispensaries were already up and running. In stark contrast to the process in other states, Oklahoma shops were allowed to sell flower on October 26th but most didn't even have plants ready for harvest until November. Let's take a look at some of the up and coming cannabis growers in Oklahoma.

A Glut of Cannabis Growers in Oklahoma

man tending to marijuana plants, he may be one of many cannabis growers in oklahoma

Unsurprisingly, about half of state licenses have been granted to cannabis growers in Oklahoma. More than 1,000 applications have been approved for cultivators. So far, these cultivators have avoided clustering in particular areas, and are instead spread quite evenly across the state. The majority of these growers operate small farms under 10,000 square feet, and competition among these small operations is expected to be quite fierce.

Some growers, however, have a distinct starting advantage. Sage Farms, for example, is well positioned to become one of the best cannabis growers in Oklahoma. The owner and Founder of Sage Farms, Ben Neal, entered the agricultural industry in 2014. He brought his background in aerospace manufacturing to the farm, and has focused on high-tech aeroponics to grow traditional produce such as tomatoes and lettuce. After years of hearing weed-related jokes about his grow technique, the legalization of cannabis in Oklahoma led Neal to add marijuana to the crop list. Sage Farms is now one of the leading cannabis growers in Oklahoma, and Neal was offered $2,800 per pound for his entire first crop. That's a total of $560,000, for those who are wondering.

While Neal nabbed a good deal on his first crop due to an established reputation and early start, other farmers are struggling with the start-up costs. According to local news source The Norman Transcript, the initial cost of setting up a grow operation ranges from $25 to $200 per single square foot. These costs include proper grow lighting, fans, climate control, and irrigation – not to mention the utilities necessary to run all of this.

Dispensaries for All

curing marijuana indoors on a tray

Although the number of licensed dispensaries for cannabis in Oklahoma is significantly less than the number of growers, 750 is not a small number by any measure. Although there aren’t many dispensaries up and running as of early-January 2019, competition is going to be fierce as the market for cannabis in Oklahoma becomes more saturated. Urban areas in Tulsa, Oklahoma, and Muskogee counties face especially stiff competition. It's not cheap to start a dispensary, and the number of cannabis growers in Oklahoma means supply will soon outstrip demand. If dispensary operators can't attract enough customers, we're going to see a large wipeout as time progresses.

First movers and those with a grow operation already in place have a huge advantage in the developing dispensary landscape. Cannabis in Oklahoma is still a very new concept, and residents haven't had the chance to experience the full range of experiences possible in a local dispensary. Sage Farms, for example, has the financial footing to put a lot of money into aesthetics. It goes without saying that most customers will prefer shopping for marijuana in a well-appointed, spacious dispensary, so shops with less start-up cash will find themselves having to lower prices or make other compromises.

The Wild West of Weed

outdoor landscape in oklahoma

Oklahoma is a close as it gets to lawless with their medical marijuana program. Medical cannabis in Oklahoma is subject to far fewer regulations than in other states. For instance, there is no list of qualifying conditions. That means any board certified physician who registers with the Department of Health is able to recommend medical marijuana for any condition they see fit. For this reason, over 20,000 applications have poured into state offices from individuals wishing to be approved for medical marijuana consumption.

There is also no cap on the number of licenses approved for cannabis growers or dispensaries in Oklahoma, which makes the problem of competition a serious one for the smaller businesses. The heat map for cannabusinesses in the state is quite solidly red and orange except in the most rural of locations, making cannabis in Oklahoma one of the most interesting systems in the nation.