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Green Gold Rush: Illegal medical marijuana grows festering in rural Oklahoma

Illegal medical marijuana grows
Posted at 8:13 PM, May 05, 2021
and last updated 2021-05-07 00:03:47-04

TULSA, Okla. — Oklahomans and out-of-towners are jumping in to join the Sooner State's thriving medical marijuana industry, but not all of them are beginning with the best intentions.

“It’s so loose on the back-end right now. It’s very easy to divert," said Chip Paul, executive director for OK4U Approved. "It’s very easy for the black market to come in.”

"The majority are trying to do everything right," Mark Woodward, spokesperson for the Oklahoma Bureau of Nartotics, told 2 News.

Woodward said the bureau has shut down about a dozen criminal marijuana organizations operating as licensed growers. The agency recently busted black market dealers in Creek and Mayes Counties.

“Moving all of their finished products, thousands of plants, and hundreds of thousands of dollars worth in bulk qualities onto the streets," Woodward said.

He said his agency is checking into concerns of illegal grows in all 77 Oklahoma counties.

"A small fragment of what's coming down the line," Woodward sadid.

Oklahoma's medical marijuana market is a potential hotbed for criminal organizations simply because of the cost to get in. A business owner seeking a license applies through the Oklahoma Medical Marijuana Authority at a $2,500 fee, plus an additional $500 fee charged by OBN.

The $3,000 entry fee makes the Sooner State's industry the cheapest to buy in.

Woodward said it is difficult to detect the business's bad actors up front, because they strategically use Oklahoma addresses to pass an initial background check.

"They're not exclusively out of state, foreign investors, but several of them are," he said.

"Who are their new neighbors? Why are there so many people buying up property for cash money for more than the value of the property?" Rep. Scott Fetgatter, (R) Okmulgee, Oklahoma, said. "There is a legitimate concern there."

READ MORE: 'Green Gold Rush' series

Fetgatter and other state legislators just submitted one way to keep devious actors off sooner soil. Both state legislative chambers passed House Bill 2272, which allows OMMA to suspend the license of a dispensary, processor, or grower that does not disclose any foreign investment with the state within 60 days of application approval.

"Some more teeth that we can use to shut them down," Woodward said. "We do not want to be seen as a safe haven for criminal organizations to come here and try to hide under Oklahoma's medical marijuana program."

But a lot of those illegal grows may be hiding in plain sight.

Okmulgee County Assessor Ed Johnson told 2 News, he is skeptical of a handful of operations in the county, including some large-scale, out-of-state owned ones. He said, at least one business spent seven to eight times the going rate for acreage in the county.

According to Johnson, the grower bought a 20-acre property for $700,000, which equates to $38,500 per acre. Johnson said, the current county cost per acre is around $5,000.

Business owners operating by the book worry enough about turning a profit in Oklahoma's medical marijuana market — they say it's near impossible to do so competing against the black market.

"There's a lot of people that are bringing in product from out of state at a lower price," Beau Zoellner, chief operating officer of Dr. Z Leaf in Tulsa, said.

Zoellner is one of thousands of business owners in the state calling for stricter enforcement of illegal actors in the industry.

"Many of them are sinking their life savings into trying to keep their businesses afloat, and they're calling us and begging us to do something," Woodward said.

"As a dispensary trying to do things the right way, it's very frustrating to see the competition cut corners," Zoellner said.

With the potential for more state-mandated costs on businesses in the pipeline, business operators are crossing their fingers enforcement legislation is there to accompany it.

An Oklahoma County property assessor and former member of the Oklahoma Tax Commission told 2 News this spike in property prices paid by those purchasing land for medical marijuana businesses affects the real estate market. He said some Oklahomans would not be able to afford the increased appraised costs. However, he believes the market will course-correct itself once the medical marijuana market slows.

On 2 News TONIGHT at 10 p.m., Mason Mauro shows us how criminals are taking advantage of the system and how it’s affecting more than just the medical marijuana industry.

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