At trade shows, members of the Cannabiz Media team are often tested with hard to answer questions from people who want to find information on cannabis industry professionals, licenses, and companies from all the data that we track. We usually have the answers they’re looking for, and we learn a lot about what the market values in these conversations.

For the last six months or so, we’ve been flipping the question over and asking people which state has the most dispensaries and other license types. The answer we almost invariably hear is California or Colorado.

But that is not right. Neither California nor Colorado has the most licensed cannabis dispensaries‍

Oklahoma, the Panhandle State, took that mantle this spring when it surpassed California. The differences in numbers of licensed cannabis dispensaries in Oklahoma compared to California are astonishing, especially given the population differences.

The numbers above are drawn from the Cannabiz Media License Database and include only active licenses. This is an important distinction as California has had many of their temporary licenses expire throughout 2019.

What is even more astonishing is that California’s population is ten times the size of Oklahoma’s! This translates into one dispensary for every 2,356 people in Oklahoma versus one for every 67,972 people in California.

How Did We Get Here?

There are a number of trends driving this disparity in the number of licensed cannabis dispensaries in Oklahoma versus California. History and regulatory complexity are both at play here.

California has had a medical marijuana program/infrastructure officially for over 20 years. The state legalized cannabis in 1996, and as a result, the state became famous as a place where it’s easy to obtain cannabis. However, when adult use was approved, the state had the very challenging task of trying to harness this enormous marketplace.

The scheme regulators came up with had over 100 different license types with distinct designations for temporary, provisional, and annual variations. Covered activities included the standard four of testing, cultivation, manufacturing, and dispensing along with delivery, distribution, and microbusiness licenses.

Oklahoma has a much shorter history in terms of cannabis regulation. The state started to issue the first state licenses in August 2018, 10 months after California. Oklahoma only issued them for cultivation, manufacturing, and dispensing.

Furthermore, the complexity of the licenses was less than what was required in California, and the fee was only $2,500. The chart below illustrates the differences between the two states showing Oklahoma fees versus the highest possible fee in California.

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Also, the Oklahoma Medical Marijuana Act explicitly restricts cities from taking action in relation to the implementation and regulation of activities related to medical marijuana in the state. This is quite different than in California where whole counties have opted out of having licensed businesses within their borders

So What Does it Mean?

We doubt there are many businesses that are deciding whether to enter the cannabis industry in California or Oklahoma, but the analysis above does highlight the patchwork of rules and regulations that can create anomalies like Oklahoma having more licenses than California.

Many of these Oklahoma businesses will probably not survive and some have suggested that lots of newly purchased grow light systems and other hardware will be for sale on Craigslist and eBay before too long.

In addition to the differences in the licensing program’s fees and complexities, there are also vast differences in populations. California’s 34 million people is roughly ten times the number of people in Oklahoma. Patient counts show similar disparities where Oklahoma has 153,000 patients to California’s 1.2 million - and that doesn’t even count all the adult-use consumers in California.

To Oklahoma’s credit, it is creating regulatory structures to support the program that include requiring certain license holders register with other regulators like the Office of Narcotics & Dangerous Drugs Control and the Department of Health

Looking Ahead

Industry consultant Avis Bulbulyan recently commented online about the healthy number of applications received in the state of Missouri for its upcoming program. He thought the groundswell was in line with other states that receive, “7-10 times the number of applications compared to licenses available.”

Although Oklahoma has no limits to its cannabis licenses, will the population settle down to 1/7 to 1/10 the licenses that have been issued, which would translate into 167 to 250 dispensaries? We think it's a possibility and also note that the multi-state operators didn’t rush into the Oklahoma licensing frenzy.

Cannabiz Media will continue to track the licenses in Oklahoma, and everywhere else, to help our customers track the expansion and contraction in markets worldwide. Schedule a demo of the Cannabiz Media License Database to see how the included data, insights, CRM, and marketing tools can help you reach your business goals.