A Tulsa law firm has filed a class action lawsuit against the Oklahoma Medical Marijuana Authority for rejecting license renewals of medical marijuana dispensaries because of changes in state law made after the entities were licensed.
While the suit filed in Oklahoma County District Court lists three entities, the firm said its class action petition is necessary because of the potential effect on medical marijuana businesses across the state that no longer fit full compliance with state law (although they did when initially licensed in 2018) because their owners have not been Oklahoma residents for two years or because the definition of educational facilities and the method of measuring distances has changed.
Ronald Durbin, an attorney with Viridian Legal Services, said because the State Legislature did not act this year to amend changes made last year to a law created in 2018, the Oklahoma Medical Marijuana Authority (OMMA) “was forced to begin denying license renewals to hundreds of existing medical marijuana businesses” because owners or their business locations no longer fit state law. The Oklahoma State Department of Health gave control of enforcing such entities and their licensing requirements to OMMA.
Durbin, in a written statement, said attorneys have begun talking to state officials and believe the issue can be resolved amicably.
The class action lawsuit, filed on behalf of Genesis Canna-Farms LLP, KC’s Cannabis LLC and Teresa Bilyeu Inc., centers on provisions that didn’t exist when the three entities were licensed in 2018 and, as such, should not apply to businesses that are merely trying to renew existing licenses, the suit argues. Attorneys estimate at least 250 businesses would be impacted by the changes in residency and school-related requirements.
Regulations crafted in 2018 specified business license applicants must show that members, managers and board members are Oklahoma residents, but did not specify a length of time for residency (only that owners were residents at the time of application). The law also specified that in relation to medical marijuana dispensaries, retail businesses were prohibited within 1,000 feet from any public or private school entrance.
Amendments passed in 2019 include a provision that all applicants provide proof of residency in Oklahoma for at least two years proceeding the application date. The problem, according to the lawsuit, is that many people moved their families to Oklahoma and obtained business licenses to operate dispensaries under 2018 provisions, including Genesis Canna-Farms LLP. Those owners cannot renew their license because they don’t meet the two-year residency provision, which is why Genesis Canna-Farms’ business license renewal was rejected by the OMMA.
The suit argues those owners should not be denied renewal because the two-year residency requirement did not exist when they moved to Oklahoma, and that the U.S. Supreme Court has “commonly struck down length of residency requirements.”
The Legislature also amended the definition of school to include a public or private preschool or a public or private elementary or secondary school used for school classes and instruction, but neither it nor state law defines preschool, the lawsuit states.
Provisions also were changed to specify that a medical marijuana dispensary may not be within 1,000 feet of any public or private school entrance, which OMMA defines as any opening, such as a door, passage or gate that allows access to any school, including buildings, facilities or other indoor and outdoor properties.
The suit states the 2019 amendment and OMMA regulations changed the definition of entrance so dramatically that licensed dispensaries which were more than 1,000 feet from a school under 2018 definitions are less than 1,000 feet under 2019 definitions. The addition of undefined preschools, not considered schools in 2018, “has left hundreds if not thousands of previously compliant dispensary business owners subject to non-renewal through no fault of the owners,” the lawsuit states.
KC’s Cannabis LLC was granted a license in September 2018, but OMMA sought to revoke its license in December 2019. While the business is almost 2,000 feet away from a school building, it is within 1,000 feet of the entrance to a softball field dugout, an “entrance” under OMMA definitions. Teresa Bilyeu Inc. would lose its license because it is within 1,000 feet of a HeadStart facility, now classified as a preschool (it was not in 2018).
The lawsuit is seeking judgment declaring that all dispensary businesses already holding licenses from the OMMA will not have their licenses revoked or be denied renewal on the basis of the residency or school provisions.