Lax regulation and low barriers to entry have triggered cannabis’s explosive growth in Sooner State
OKEMAH, Okla. — Chip Baker surveyed a vast field on the outskirts of an old hay farm an hour east of Oklahoma City, his ponytail waving in the thick, humid air, his voice growing excited.
“This is probably the largest collection of Squirt in the world!” he boasted, pointing to an array of neatly plotted cannabis plants before him that will soon flower pounds of the popular strain.
Baker would know. From the time he planted his first marijuana plant at 13, he’s been all about growing weed. A dream formed in the Georgia fields took him to Humboldt County, California — the nation’s earliest pot epicenter — then Colorado, the country’s first recreational market.
But it’s here in rural Oklahoma, down a dusty dirt road along the banks of the North Canadian River, where true cannabis cowboys — including droves of Colorado entrepreneurs like Baker — are buying mammoth properties to grow mammoth numbers of plants, all in a quest for mammoth stacks of kush-derived cash.
It’s a place unlike virtually any other in America.
“Other states grow patches,” Baker said with a grin, taking in the 90-acre, 40,000-plant cannabis farm before him. “In Oklahoma, we grow fields.”
The Sooner State, as deeply red as the American political palette will go, has almost overnight become the hottest place in the country to grow marijuana. It’s an unprecedented look at what happens when the government stays largely out of the picture and lets the free market run wild.
And Colorado businesses are pumping their sizeable dollars and cannabis expertise into the state, hoping to cash in on what Baker and others in the industry call the next green rush.
“It’s the Wild West of weed,” he said, “in all its glory.”
Oklahoma is now America’s most unlikely bastion of bud — a law-and-order mecca that took the war on drugs to its extreme and still imprisons a higher percentage of its population than every state but Louisiana.
Contrary to most other highly regulated cannabis markets, in Oklahoma there are no caps on how many plants you can grow and no limit to how many grows or dispensaries the state can handle. As a result, Oklahoma now has the most medical marijuana patients per capita in the nation — and it’s not even close. Just three years after legalization, the state has seven times the number of growers as Colorado and twice as many dispensaries.
Land is affordable and plentiful. Doctors condcut virtual consultations that help people get medical licenses in as little as 15 minutes — no approved medical condition necessary.
These low barriers to entry make Oklahoma the new eye of the national weed storm.
“Anyone with a dollar and a dream can get started in Oklahoma,” said Brent McDonald, marketing and sales director at Apothecary Farms/Apothecary Extracts, one of the many Colorado cannabis companies competing in what has quickly become a national marijuana arms race.
The flip side to this wild west environment, Oklahoma law enforcement officials contend, is a state flooded with people — including those migrating from Colorado — looking to take advantage of the lax new laws.
Illegal growers are setting up shop in rural areas, they contend, forcing their workforce to live in squalid conditions and diverting their product out of state for massive profits. Meanwhile, land prices are going for five times their value, with eager growers paying in straight cash.
“I’m not frustrated,” said Haskell County Sheriff Tim Turner, whose deputies in rural eastern Oklahoma busted two Colorado individuals in June for allegedly operating an illicit 10,000-plant grow. “I’m madder than hell.”
Leaving Colorado for greener pastures
After getting his start in California, Baker spent a decade honing his cannabis chops in Colorado’s medical and, later, recreational scenes.
In Denver, he formed his Cultivate Colorado brand that supplies growers with the soil, lights, shovels and anything else they might need to raise plants into mature products.
But soon after Oklahomans in June 2018 voted to legalize medical marijuana, Baker noticed transportation costs for his hydroponic supplies were five times higher than normal.
All of it, Baker realized, was going down to Oklahoma.
“I didn’t even know they legalized medical,” he said.
It only took three months for Baker and his wife to sell their Denver home, buy 110 acres outside Oklahoma City and move their operations east.
“We follow the green rush,” he said. “Always have.”
In addition to operating his own farm, Baker also manages the 90-acre grow in Okemah whose owners converted an old hay farm into what Baker claims is one of the largest cannabis plots in the nation.
The Tribe Collective owners are Oklahomans from a variety of backgrounds: oil and gas, tech and even Hollywood. They ditched the old industries and went all-in on growing bud.
The sprawling farm sits on a 900-acre property, replete with multiple greenhouses, a state-of-the-art extraction lab, walk-in freezer — and that’s before you get to the outdoor grows. Driving down the dusty dirt road, it looks like it could be any rural swath of American heartland.
But then you see the plants — more than 40,000 of them swaying gently in neat rows of fields with names like “Skinny Marie” and “Lucky Day.”
On a recent, oppressively hot Oklahoma summer day, workers drenched in sweat installed rope lines to keep the plants upright. Nearby, Baker and his team strategized about the best ways to keep irritating caterpillars off the marijuana leaves, discussing plans to expand even further on the seemingly endless property.
“People used to say ‘Oklahoma’ like a cuss word when we moved here,” Baker said with a laugh. “But this will prove to be the biggest cannabis state in the country.”
For New Orleans native Jeff Henderson, Colorado served as a crash course in cannabis. But it was time to take the training wheels off.
Henderson — who goes by “Freaux,” a shortened, Cajun version of “Jeffro” — did a bit of everything in Colorado’s marijuana scene. Bottom of the totem pole stuff. Trench work.
“I was trying to break into the scene, getting licenses, getting investors,” he said. “But Colorado real estate is god-awful expensive, the licenses are expensive. I kinda came up short in that realm.”
So when Oklahoma legalized medical marijuana, Henderson jumped at the opportunity to get in on the ground floor.
He and his partners, who had Oklahoma ties, didn’t have deep pockets, but some savings here, a bridge loan from a friend there, and the wide-eyed cannabis connoisseurs had themselves a boot-strapped business.
They worked 16-hour days, the four partners doing the work of 10 people.
“We’re the furthest guys from corporate,” Henderson said on a recent day inside his Jive Cannabis facility in Inola, a town 25 miles east of Tulsa. As he showed off his plants, pointing out the deep-purple coloring, Henderson took the tone of a proud father.
“We were just four guys with a hope and a dream,” he said.
Unprecedentedly low barriers to entry”
Everything changed for Baker, Henderson and the state of Oklahoma on June 26, 2018, when 57% of voters checked the “yes” box on legalizing medical marijuana.
In the months leading up to the vote, a frenzied coalition of state medical and hospital associations, district attorneys, sheriffs, the State Chamber of Oklahoma and the state’s Republican governor lined up to oppose the measure.
“This is a bad public health policy that does not resemble a legitimate medical treatment program,” Dr. Kevin Taubman, former president of the Oklahoma State Medical Association and chairman of the opposition group, told the Associated Press after the vote passed.
Then-Gov. Mary Fallin feared the proposal was essentially legalizing recreational marijuana.
Many Oklahomans, including those in the cannabis industry, wouldn’t argue. Up and down the board, there were very few restrictions put in place on who could operate a grow, how many there could be and how easy it would be to obtain a medical card.
Unlike in many states, including Colorado, patients don’t need qualifying medical conditions in order to get a card. Doctors sometimes would set up outside dispensaries, offering their services. Websites with names like NuggMD and PrestoDoctor promised customers a medical marijuana card online in 15 minutes.
Business licenses cost just $2,500, a fraction of the price in other states, making it possible for nearly anyone with a bit of cash to start a grow or dispensary.
Colorado charges roughly $7,500 for initial recreational and medical shop licenses, and renewing that license annually will run an operator thousands more each time, depending on how many plants they want to grow.
Then there’s the “finding of suitability” fee — a state check to make sure someone is allowed to actually run a business. That’s another $800 per person, or $5,000 for a publicly traded company. Not to mention, of course, the local fees that come on top of the state’s, which can run thousands more per year.
The costs quickly add up.
Additionally, Colorado companies or individuals can’t just grow as many plants as they wish on their own — they must apply with the state in order to add or subtract plants.
Cities and counties in Oklahoma, meanwhile, aren’t allowed to outlaw dispensaries or grow operations — another major break from states like Colorado, where despite legalization, the drug is still barred from being sold recreationally in many local jurisdictions.
“These are unprecedentedly low barriers to entry” in Oklahoma, said John Hudack, a cannabis expert at the nonpartisan Brookings Institution, a Washington D.C., think tank.
With typical roadblocks and red tape shoved to the side, the industry has exploded.
Nearly 376,000 Oklahomans — roughly 10% of the state’s population — have medical marijuana cards, by far the highest share in the country, according to the Marijuana Policy Project.
New Mexico, by contrast, has the second-highest number at 5.35%, with Colorado at 1.5%.
Even at the height of Colorado’s medical marijuana boom in 2011, however, the state topped out at 128,698 patients, a third of Oklahoma’s total, and just 2.5% of the state population.
The cost difference between getting in the game in Colorado versus Oklahoma is stark.
“To even think about opening a (marijuana) business in Colorado, you have to have a million dollars liquid to get the ball rolling,” said McDonald, the Apothecary Farms executive.
In Oklahoma? You can be fully vertically integrated for $7,500, Henderson said.
Cheaper land prices, building costs and license fees mean “it’s easily 10 times cheaper here than in Denver,” he said.
Those factors, combined with the state’s hands-off approach, means it’s getting awfully crowded in Oklahoma’s cannabis space.
Some states that legalized marijuana created a small, set number of licenses. Arkansas, for example, allows for only 40 dispensaries in the state. Connecticut has just four cannabis producers and 18 dispensaries nearly a decade after legalizing medical marijuana.
But Oklahoma decided to let the free market run unencumbered. As a result, the state is now home to nearly 12,600 marijuana business licenses, including more than 8,600 growers and upwards of 2,300 dispensaries.
That’s more than double Colorado’s combined recreational and medical stores — despite the fact that Oklahoma has some 1.8 million fewer people. The Centennial State has more than 1,200 cultivation operations, per state data, nearly seven times fewer than Oklahoma.
The town of Bristow, a 4,200-person community nestled between Oklahoma City and Tulsa, used to thrive on oil and cotton. Its downtown strip along historic Route 66 has a few restaurants, a host of vacant buildings — and three dispensaries.
That’s the story all over Oklahoma, where small towns from the panhandle to the Missouri border boast more pot shops than grocery stores. Meanwhile, Oklahoma County, which is home to Oklahoma City, now sports 530 dispensaries — three times as many as Denver.
“People see this as an opportunity to enter a market that’s costly elsewhere and so there’s this rush of people who think they’re going to make it rich,” Hudack said. “We know how this story plays out. We saw a less permissive system operate in Oregon and they ended up with hundreds of thousands of pounds of excess inventory.”
McDonald called it the “Armageddon stage” for Oklahoma cannabis.
“There are serious windfalls that come with barriers being so low,” he said. “The market is so oversaturated in Oklahoma. What this has done is make it a true buyer’s market. Things are so competitive, it’s a race to the bottom.”
Industry watchers predicted a bloodbath in the near future as companies peter out, selling for pennies on the dollar.
The freedom to operate has been the driving force bringing companies to Oklahoma — but some are finding that the lack of regulation is hurting those trying to do things the right way.
On the surface, the Oklahoma market seemed incredibly enticing for Clear Cannabis Inc., a legacy cannabis company headquartered in Denver: a plethora of clients, endless shelves to stock its products.
But without the regulator framework, “it makes it challenging for a compliant business like us to truly succeed,” said Seth Wiggins, the company’s president.
Oklahoma marijuana regulators still lack an important tool to ensure compliance: a seed-to-sale tracking system used in nearly every other state with a medical or recreational cannabis program. The system lets regulators track a plant’s movement anywhere, so if it’s found, say, in New York, they know exactly where it came from.
The state tried rolling it out — only to be met with a lawsuit alleging the company, Metrc, acted as a monopoly since businesses were not given any other options to track their plants. The matter is still working its way through the legal system.
Without seed-to-sale tracking, Wiggins and other industry workers said, less compliant individuals can more easily divert weed elsewhere without detection. Plus, companies skirting the rules are offering prices that Wiggins and other legitimate competitors can’t touch.
“Folks doing it right are getting penalized right now,” Wiggins said, noting that the company’s sales are “substantially lower than we would have anticipated” in Oklahoma.
Oklahoma’s medical marijuana regulators are rapidly staffing up to meet the demand of the burgeoning industry — even recruiting some of their top people from Colorado.
Taylor Hartin, the state’s deputy director of compliance and enforcement, who came from Colorado’s private sector, said the agency paused field inspections during the COVID-19 pandemic, but is now increasing its work.
“We’re not going to tolerate it”
That lack of regulation is also frustrating state and local law enforcement officials, who say the drug’s hasty legalization ushered in an alarming rise in illicit grows and other criminal activity.
While it’s difficult to put a number on a market that lives in the shadows, officials say anecdotal evidence points to out-of-staters, including people from Colorado, coming into Oklahoma to operate unregulated operations.
Nearly every week brings another news story about large raids conducted across Oklahoma, where, authorities allege, people are growing and shipping vast quantities of marijuana for sales out of state.
The illicit grows also bring in other ancillary crime, including prostitution, harder drugs like ketamine and labor trafficking, said Mark Woodward, spokesman for the Oklahoma Bureau of Narcotics.
When the agency saw how the new marijuana law was written three years ago, they knew people would come to the state to take advantage, he said.
But law enforcement didn’t realize just how many people it would be — and how quickly they would set up shop.
“This was a Trojan horse,” Woodward said. “We let this into our village because it looked really good on the surface.”
The Bureau of Narcotics simply can’t keep up with the number of illicit grows, he said. In response, Oklahoma has asked for $4 million in federal funding to battle the unregulated marijuana market, with the state legislature promising additional money to fund a unit dedicated to the issue.
“What we will be concentrating on is drug trafficking organizations that are transnational and national drug organizations that have infiltrated Oklahoma,” Donnie Anderson, the agency’s director, told local reporters in July as he announced the federal aid request. “They’re here in Oklahoma and they’re not going away anytime soon.”
In June, authorities in rural eastern Oklahoma arrested two Colorado individuals for allegedly operating an illicit 10,000-plant grow as part of a larger transnational money-laundering operation. When officers raided the property, they also found 100 pounds of processed marijuana.
“I would say 60% of the grows in Haskell County are from Colorado residents,” said Turner, the Haskell County sheriff — though he didn’t provide any hard data.
A tour through the 12,000-person county, located 100 miles southeast of Tulsa, showed old chicken coops being converted into grow houses on vast parcels of land, their white tops visible through a thicket of trees lining the roadway.
As Undersheriff Terry Garland drove slowly past grow houses, he glanced over to see the license plates in the driveways. Some had Minnesota tags, others showed Washington and Oregon.
“I’m gonna run those plates later,” he said as he inspected one car.
For Garland and Turner, legal marijuana has upset their rural slice of life.
“The price of our land has gone up, and citizens can’t swim in their pools because they have to smell marijuana growing every day,” Turner said. “Folks here growing are not even residents of Oklahoma. They come here because it’s the Wild West — well, we’re not going to tolerate it.”
When it first started, Garland said, people in the county would laugh when they smelled weed coming from next door.
“Now they’re not laughing,” he said, pausing to point out a new grow operation that seems to have sprung up overnight. “A lotta people hate the idea that it’s in our county.”
Gary Coyle just can’t believe what the influx of pot farmers has done to real estate in this rural community.
A former welder, Coyle was forced out of his old career as his health declined and needed a new source of income. One day two years ago, his brother suggested he open up one of those marijuana dispensaries.
“I didn’t know a damn thing!” he said regarding his previous cannabis knowledge. Coyle never smoked himself, abiding by his father’s old axiom that the drug “puts you in prison or puts you in the grave.”
If the grows are legal in town, Coyle said he doesn’t mind, but he wishes sales were better in his shop. After the 10th of the month, when everyone in town has spent their paycheck already, sales slow to a trickle.
He and Garland swapped stories about land prices inside Coyle’s G&C Dispensary in Keota, expressing disbelief at what some of their friends and family were being offered. Since legalization, out-of-towners have been showing up to people’s doorsteps, offering four, five, eight times the value for their land — and the ability to pay in cash, they said.
“I said, ‘You done fell out the well and hit your head!’” Coyle said after reciting a story about one particular offer.
“Oklahomans are outlaws”
But despite the wishes of some Oklahomans, marijuana is here to stay. And the people it’s attracting would surprise even themselves.
Ten years ago, Billy Moon would have thought you were crazy if you told him he’d one day be operating a professional cannabis business.
The former Oklahoma City police detective spent his career dealing in the dark world of cartels and narcotics, his nights occupied taking down meth houses.
But after being diagnosed with a form of blood cancer, the doctor told him to try cannabis. The cancer caused Moon to feel burning sensations in his hands and feet, but he realized that smoking and taking edibles would make the pain disappear.
“That was it,” he said. “I thought, ‘We’re missing (out) on something.’ There’s some obvious benefits to this plant.”
Moon partnered with Rich Cardinal, a Colorado cannabis lifer, to set up a grow operation called Canna Culture on a family-owned piece of property in Chickasha, a small town 45 minutes southwest of Oklahoma City.
The former police detective is selling Cardinal on the Oklahoma way of doing business.
“Oklahomans don’t want that lazy, hippie vibe,” Moon said next to an outdoor field full of cannabis. “Oklahomans are outlaws. It’s a ‘(expletive)-the-government’ kind of attitude.”
But the fact that a state as red as Oklahoma is leaning into legal cannabis should no longer be surprising, said Ricardo Baca, a former Denver Post journalist who was the country’s first cannabis editor and founder of the Denver-based Grasslands marketing agency.
The turning point, he said, came in 2016. When most of the country had its eyes peeled on the presidential upset, eight states — including deeply conservative ones like Arkansas, Montana and South Dakota — were quietly legalizing some form of marijuana, a precursor to places like Oklahoma turning from red to green.
“Cannabis is no longer a partisan issue,” Baca said. “And we need to stop treating it as such.”
Back in Okemah, Baker studied the drip irrigation system — a technique perfected in the Israeli desert — now used to grow tens of thousands of marijuana plants.
“We’re looking at two tons of weed right here,” he said, smiling.
Last year, the Tribe Collective crew raked in 50,000 plants — the equivalent of 63,000 pounds of pot.
“That’s what’s beautiful about Oklahoma,” Baker said. “They call it the Wild West. Well, we’re a little wild here. It’s a business-friendly state. They don’t overregulate any business here.
“For good or for bad,” he said, “that’s what capitalism is supposed to be.”
Original Article by Denver Post
Written by Sam Tabachnik
Image by Gerson Repreza