An Oklahoma County judge granted a temporary injunction in favor of a medical cannabis business whose owner said authorities wrongly deactivated his license amid busts of “ghost owner” enterprises.
The judge found that the Oklahoma Medical Marijuana Authority “acted contrary to law” when it accepted Kathy Windler’s surrender of interest in numerous business licenses as grounds to deactivate a license belonging to plaintiff John Wah Ng, a Delaware County grower.
“Kathy Windler did not comply with OMMA and (Oklahoma Bureau of Narcotics and Dangerous Drugs Control) regulations governing license/registration surrender in her attempt to surrender the licenses,” the Sept. 10 order from District Judge Don Andrews states.
The judge added: “An attempt to surrender an OMMA and/or OBNDD license made without full compliance with the relevant OMMA and OBNDD regulations is a nullity.”
In signing the order, Andrews said he found that Ng would suffer “irreparable injury” before further proceedings if OMMA, OBNDD and the state Health Department show his licenses as surrendered and deactivated.
Andrews set a show-cause hearing in Ng’s case for Friday morning before District Judge Sheila Stinson.
While Ng acknowledged having worked with Jones Brown PLLC — for whom Windler was a secretary and later liaison for what she’s claimed was a side “ghost owner” business scheme — his lawsuit argues that Windler is not and has never been an owner of Ng’s company.
The term “ghost owner” describes an Oklahoma resident who claims majority ownership in a business so a nonresident can circumvent regulations mandating that cannabis businesses in the state be primarily owned by Oklahomans.
OBNDD spokesman Mark Woodward told lawmakers during an interim legislative study Aug. 31 that one “ghost owner,” whom he declined to identify, surrendered interest in nearly 300 licenses and that the OBNDD has recently denied renewal of 401 licenses.
“OBN is aware of the legal action that has been filed, and our agency’s legal division is addressing it accordingly,” Woodward said of Ng’s case on Thursday.
Windler has filed a separate lawsuit against Jones Brown over the matter, citing the likelihood of serious legal consequences in a Garvin County cultivation case after acting on advice and direction from her former employer.
The Jones Brown firm, which had a presence in Tulsa, has since updated its webpage to focus on attracting clients from the Oklahoma City area. It has declined to comment on Windler’s suit but has previously maintained that it complies with state law.
“Defendants’ spontaneous deactivation now prevents (Ng) from submitting an ownership change request and removing Kathleen Windler from its ownership qualifications,” attorney Rachel Bussett, who represents Ng, wrote in the petition. “OMMA will not agree to reactivate the licenses and has advised that (Ng’s) only option was to apply for a new license.”
Bussett said that process would take longer for the OMMA to review than the 30-day regulatory deadline, which would have passed Thursday, during which Ng would need to liquidate all his plants in accordance with the license deactivation. She argued that the deactivation occurred without due process and in violation of the Oklahoma Administrative Procedures Act.
A State Health Department spokesperson did not return a request for comment on the lawsuit by press time Thursday.
In a Facebook Live broadcast last week, Bussett said OBNDD licenses are renewed each October and that the agency has said it has “no intention” of renewing licenses it believes have possible ties to the use of “ghost owners.” But she contended that the OBNDD and OMMA should have given more timely notice to businesses whose licenses it flagged as needing review.
“In addition, without an active OMMA license, (Ng) is immediately subject to OBNDD enforcement action, including seizure and destruction of any cannabis plants or other products,” Bussett wrote in the suit. She wrote in a separate affidavit that a judge in Okfuskee County granted a similar restraining order request against the OMMA and OBNDD on Sept. 9.
Bussett said Ng moved to Delaware County last year from California and borrowed money from friends and family to create a cannabis growing business. Ng, according to Bussett, “expected that it would take two years to set up his business, obtain residency and build out his facility before he became licensed and began planting and cultivating medical marijuana plants.”
He later leased a 10-acre chicken farm in Delaware County for five years and reported investments of more than $1 million, including for two mobile homes, a warehouse, eight greenhouses, fencing and other security measures.
The petition claims that Jones Brown representatives wrongly told Ng during meetings that he did not need to wait two years before he could apply for a grow license because Windler “could act as a consultant and stand in as the lawful Oklahoma resident to meet the residency requirement.”
After being told the arrangement did not mean Windler would have the power to make business decisions on his behalf, Ng said he paid Jones Brown $6,500 in legal fees and licensing expenses. He also gave $2,000 for Windler’s consulting fee.
Bussett also claimed there was evidence to show that Jones Brown was “specifically targeting individuals of Chinese descent for licensing” whose primary language is not English. Ng’s first language is Cantonese.
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Framed by State Question 788, passed overwhelmingly by state voters three years ago, Oklahoma’s medical marijuana laws tried to favor small, local operators by limiting out-of-state ownership stakes, setting license fees low and putting no cap on the number of business licenses that could be issued.
10 things that are still illegal under Oklahoma’s medical marijuana laws
Can’t get a prescription for marijuana
Marijuana is listed as a schedule 1 controlled substance in federal law, so it cannot be prescribed, only “recommended.”
A Ninth Circuit Court ruling ensures protection for doctors who issue recommendations to patients who may benefit from cannabis-based treatments, but federal law precludes doctors from “aiding and abetting” patients obtaining marijuana. This means doctors and patients cannot discuss dosages, strains or specific cannabis products for treating a specific ailment. Doctors instead fill out a form indicating they have discussed the risks of marijuana use with the patient and feel the benefits are worth the treatment.
Some patients who see physicians for pain and are treated with opioids also may not be able to do so and use medical marijuana as a licensed patient.
Can’t use marijuana in the workplace or be impaired on the job
State Question 788 says only that an employer may not discriminate against an employee simply because of their status as a medical marijuana patient. This means that simply having a license cannot be grounds for termination or discipline. That employer can still, however, write and enforce rules that restrict the use of marijuana by employees just like any other controlled substance. No patients would be protected if they come to work high, use marijuana in the workplace or attempt to do their job while impaired.
Can’t transport marijuana across state lines
Patients who obtain medical marijuana cards in other states may purchase from dispensaries there, but the products may not be brought back to Oklahoma. Nor could a patient travel to a state with a recreational marijuana law and bring any legally obtained products back to Oklahoma. Those patients who plan to cultivate marijuana at their own homes would also not be permitted to obtain seeds from another state.
Can’t get a doctor’s recommendation inside a dispensary
A change to the law made it illegal to post a physician inside a medical marijuana dispensary, as this one did, for customers to sign up as patients inside the retail business operation.
Can’t try the product while shopping
The use of any cannabis product is prohibited inside a licensed medical marijuana business, so patients should not expect samples like what some CBD shops have been able to offer.
Can’t smoke marijuana where tobacco also prohibited
The law makes cannabis like tobacco when it comes to public consumption by falling under the Smoking in Public Places and Indoor Workplaces Act.
Can’t give marijuana away
Nothing in the law allows for patients to transfer ownership of marijuana. Patients cannot donate or sell marijuana, even to other patients. Licensed patients may cultivate marijuana on their own residential property or, with written permission, on rented property. They cannot grow outdoors unless the plants are surrounded by a locked 6-foot fence. If the yield of the plants at harvest surpasses the legal amount that may be in a patient’s possession, the marijuana must be either processed or destroyed. Patients may process their own marijuana for concentrates or edibles but would not be permitted to perform extractions using butane.
Can’t drive while impaired on marijuana
Although it is legal for patients to have a certain amount of marijuana on their person, if that patient is behind the wheel, a law enforcement officer will evaluate whether the person is at all impaired. Driving while under the influence remains illegal even for medical marijuana patients.
Can’t possess an excessive amount of marijuana
A patient remains within the legal guidelines if they possess no more than 3 ounces of marijuana on their person and 8 ounces at their residence, 1 ounce of concentrated marijuana, and 72 ounces of edible marijuana. If caught exceeding those limitations, a patient would lose their license and could face criminal charges including intent to distribute or trafficking.
Can’t smoke where you’re told not to
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