It’s no secret that Oklahoma’s medical cannabis market is well saturated. There are now approximately 12,000 licensed medical cannabis businesses in the state, nearly three times the dispensaries in California which has about 10 times the population.
However, a new supply-and-demand report by the Oklahoma Medical Marijuana Authority (OMMA) revealed further insights about Oklahoma’s dense cannabis market, specifically that the state has no less than 32 times more regulated medical cannabis than is necessary to meet patient demands.
“The supply-to-demand ratio of regulated medical marijuana supply to regulated medical cannabis demand is 64:1,” the report reads. “Using a general assumption that units of supply should not exceed two times the units of demand, the medical marijuana program has no less than 32 times more regulated marijuana necessary than licensed patient demand.”
The report used data from a series of two survey timepoints, conducted in March and April 2023, with a participant pool of 1,322 past-year cannabis users from 68 of Oklahoma’s 77 counties. Researchers also said that the percentage of survey participants residing in each county almost perfectly correlated with the actual percentage of Oklahoma residents in each county, “which suggests that our recruitment of Oklahoma residents is geographically consistent with actual county populations in the state,” the report notes.
Looking at specific subregions within the state, researchers said that key differences in supply and demand suggest potential out-of-state diversions, though researchers admit that further study is needed to verify those claims. The study also noted that the large oversupply suggests that licensed operators contributing to oversupply are “very likely” adding to an illicit market, at the point of cultivation and the point of retail sale.
The sheer volume of dispensaries and low barriers to market entry also pose an issue, according to the report. Authors said the combination suggests that unlicensed or illicit cannabis cultivation operations are “unlikely to be observed” across the state. Rather, the Oklahoma illicit cannabis market could be hiding in plain sight.
Authors also noted that the lack of production management tools in the law has aided to the growth and development of the oversupply issue.
“First and foremost, OMMA is steadfast in our commitment to serving the needs of Oklahoma medical marijuana patients,” Executive Director Adria Berry said. “It is essential that we address this oversupply head-on, not only to ensure the integrity and sustainability of our medical marijuana market for our patients but to promote public safety and mitigate dangers that coincide with illicit marijuana activity for all Oklahomans.”
The report also looked into trends in cannabis sourcing, finding that most patients (55%) accessed cannabis from a mix of regulated and illicit sources. Still, 44% of patients reported they obtained their cannabis solely from regulated sources and just 1% said they exclusively accessed cannabis from illicit sources. Patients also purchased an average total of 16% of cannabis from illicit sources, according to the report.
“Through strategic partnerships, rigorous oversight, streamlined compliance monitoring, advancements of smart policies and stakeholder engagement, we can foster an environment that promotes safety and prevents large-scale diversion,” Berry said. “At OMMA, we understand the importance of transparency and will be providing updates on our progress.”
Earlier this year, Oklahoma Gov. Kevin Stitt renewed a moratorium on new medical cannabis businesses. He originally signed legislation for the ban in May 2022, which took effect in August 2022 and was set to expire in August 2024. After signing HB-2095 earlier this month, the moratorium was updated with an extension through Aug. 1, 2026.
It’s possible that the saturation of dispensaries is also hurting the state’s efforts to usher in a recreational cannabis program. Only 38% of voters were in favor of State Question 820, Oklahoma’s recreational cannabis measure.
“I don’t think anybody expected it to be defeated that bad, but as I was traveling the state, I knew Oklahomans didn’t want it,” Stitt said. “They were so tired of a dispensary on every single corner.”
