Oklahoma Cannabis Regulator Wins Case Against a Fraudulent Cannabis Business
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Oklahoma’s cannabis regulator has denied a business application to a company following a judge’s ruling that the business submitted fraudulent ownership information.
On March 15, an administrative law judge ruled that Sun Light Farm LLC, a cultivator in Sayre, Oklahoma, had given false data to the Oklahoma Medical Marijuana Authority (OMMA) when renewing its license with the regulator.
The OMMA has since denied Sun Light its application and removed the business from the state’s medical cannabis industry.
“I’m pleased the Oklahoma Medical Marijuana Authority was able to investigate and hold bad actors in our state accountable, quickly bringing this straw ownership case to a close,” Oklahoma Governor Kevin Stitt said in a statement.
“I look forward to many more wins like this one as we work to crack down hard on illegal operations. Drug cartels, organized crime and foreign nationals working for the Chinese Communist Party have no place in Oklahoma, and we will continue to do everything we can to bring these bad actors to justice.”
State law requires that at least 75% of every medical cannabis business in Oklahoma be owned by a state resident or residents.
The judge reportedly agreed with OMMA’s legal team and investigators that the Oklahoma resident included in Sun Light’s ownership documentation is not the real owner – a practice sometimes known as straw ownership.
“This is a preview of what’s coming from OMMA as we continue to build our legal and investigative teams and capabilities,” OMMA Executive Director Adria Berry said in a statement.
From November 1, 2022, the OMMA has been an independent state agency. The suspension of Sun Light Farms marks the first time its agency has used its new authority to suspend a business due to straw ownership.
“Within weeks of becoming a standalone state agency, OMMA took swift action against people harming the medical marijuana industry by operating outside of our rules and state laws,” Berry continued. “This was a clear case of fraudulent ownership where non-Oklahoma residents tried to illegally work their way into our state.”
OMMA’s legal team and investigators are reportedly reviewing suspected cases of fraudulent ownership in more than 70 business license applications.
“We’re just getting started,” said Berry. “There are dozens of other cases of suspected fraudulent ownership that we’re reviewing right now. This won’t be the last time we take action on someone trying to harm Oklahomans through illegal business practices.”
Since 2018, Oklahoma has had one of the largest medical cannabis sectors in the US. The state has nearly three times (2,877) as many licensed cannabis dispensaries as California (roughly 1,000), despite having a tenth of that state’s population.
And the scale of the state’s medical marijuana industry seems to be more than enough for residents. Voters in Oklahoma recently, decisively, rejected the option of a legalized recreational cannabis market.