If you saw Tulsa for the first time today, with its proliferation of cannabis ads and businesses, you might be shocked to learn that only a year ago our state had some of the strictest cannabis laws in the country. The new market is a gold rush for entrepreneurs; the Oklahoma Medical Marijuana Authority has approved licenses for 323 growers, 155 processors and 265 dispensaries in Tulsa alone, as of press time.
Staying afloat amid so much competition can be difficult. The Oklahoma cannabis industry is regulated by the Oklahoma Medical Marijuana Authority. Getting a business license from the OMMA is expensive and time-consuming, and opening a dispensary challenging without access to a large amount of starting capital. Prospective dispensary owners are required to turn in a Certificate of Compliance from local authorities, submit to a background check, prove that their business would not be within 1,000 feet of a school and pay a yearly fee of $2,500. Some applicants would have to obtain a Certificate of Good Standing from the Secretary of State.
However, plenty of locals have managed to remain competitive. Wellness Pharm, a Tulsa dispensary, shares ownership with their grower in an arrangement called “vertical integration.” Doing so confers a number of advantages.
The biggest advantage is Wellness Pharm, 1414 E. Third St., has a high degree of familiarity with their product. Cannabis contains a complex array of compounds known to cause different effects, with proportions varying between strains. While all cannabis sold in Oklahoma legally must be tested in a lab, OMMA regulations for these testing facilities do not yet exist, meaning that the quality of testing can vary, and consumers can’t always be sure what strain they’re really getting.
Shared ownership with their grower allows Wellness Pharm to have greater knowledge about their product, and help their clients find the right strain. “We’re all still learning,” says Wellness Pharm Manager Dani Felty. “I mean there’s so much information, and that’s really how people can fine-tune and find what really works for them. But it takes work.”
Another of the challenges facing marijuana businesses right now are tax complications. Because cannabis is federally illegal, dispensary owners are unable to claim business expenses as a write-off, drastically increasing their costs of doing business. The vertical integration approach used by Wellness Pharm allows them to mitigate this somewhat. “We don’t get to write off expenses, we don’t get to write off labor, all those things that happen in normal businesses,” Felty says. “The grow side is where, from a business standpoint, we’re able to have the deductions and breaks that the dispensary doesn’t get.”
Staying competitive in the ongoing swell of cannabis entrepreneurship is no easy task, especially for locals without a major corporate sponsor. Partnering with other locals can help level the playing field — and benefit Oklahoma cannabis patients.