Fraudulently licensed marijuana grows may soon plateau, state narcotics bureau spokesman says

Mark Woodward, the OBN’s public information officer, told a state House of Representatives committee he expects hundreds of OBN grower licenses will be rejected for renewal or allowed to expire in the coming months.

“A lot of these folks will not be back,” Woodward said. “Their whole intent was to get what they call a burner license — get it, grow, profit and get of here.

“Some of them will come back,” he said. “They’ll try. But it will be difficult for them to get past the 75% ownership requirement.”

Under state law, at least 75% of a medical marijuana business must be owned by Oklahoma residents for it to be licensed. The past year, though, has seen a flood of new grow license applications, many of which seem to originate from other states and even other countries, officials say.

Woodward and others said Tuesday that these interests found ways to circumvent the law, at least temporarily, through what Woodward called “fraudulent business structures.”

These generally involve the use of a front who meets the residency requirement to pose as the majority owner while the real money remains in the background.

The result is that Oklahoma has issued more than 8,300 grow licenses, far more than any state in the union and far more than needed to supply Oklahoma’s 2,300 dispensaries.

Law enforcement officials say many of the licensed grow operations are used to legally grow but illegally sell marijuana, primarily to the East Coast.

Woodward said OBN has identified some criminal networks of hundreds of grow operations within the state, often hiding behind legitimate licenses.

Woodward said OBN recently raided a farm in Latimer County whose operations trace to a Bulgarian crime organization.

Rep. Anthony Moore, R-Clinton, the interim study’s leader, said a Bulgarian group recently contacted the city of Weatherford about acquiring a shuttered manufacturing plant with the intention of converting it to a marijuana processing plant.

“They’re convinced they’ve done nothing wrong,” Woodward said. “They agreed to these fraudulent business structures, and they’re convinced now that they have a structure in place that is ironclad and the law can’t touch.”

Woodward said more than 400 license applications have been rejected over the past few months, and 600 already issued have been identified as illegal.

“Any kind of business that’s operating in this way, a lot of them are going to come up for renewal in the next month, and they will have to come to us and explain this structure,” Woodward said. “It’s going to be pretty apparent to them and anybody else thinking of coming to Oklahoma … that this is not an ironclad” way of getting around the residency law.

Tuesday’s hearing was billed as a study of foreign ownership of Oklahoma farmland — an issue connected to the rapid rise of marijuana grows in the state — but also touched on law enforcement concerns, water usage and pollution, prostitution, labor trafficking and money laundering.

In fact, hard data was scarce on just how much farmland has been bought up by foreign interests in violation of state law and the state constitution.

Woodward said many of the operations are controlled by foreign interests, mostly from China and Mexico, and Sequoyah County Commissioner Jim Rogers said ownership of at least one grow in his county has been traced to the Philippines.

Some witnesses grumbled about what they said has been medical marijuana’s impact on their community, but Adria Berry, the new director of the Oklahoma Medical Marijuana Authority and a critic of the state question that legalized it, said there is no point in looking back.

“I don’t think there’s any secret that I had problems with the language of that state question, but we cannot go backwards,” Berry said. “It’s here. It’s legal. We’ve got to work together going forward to fix this.”

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