The number of retail licenses in Oklahoma’s marijuana market dipped 8% last year, from 2,238 licenses in 2019 to 2,057 licenses in 2020.
Oklahoma’s Medical Cannabis Program: By the Numbers
In 2020, Oklahoma joined states like Colorado and Illinois in posting record cannabis sales for the year. Oklahoma patients bought a whopping $830 million-plus worth of medical marijuana, more than doubling the $345 million amassed across 2019.
The boost in sales is likely due to the vast increase in Oklahomians registered for the state’s medical marijuana program—up from 220,000 patients in January to over 365,000 patients by December 2020. And those new patients generated a considerable amount of tax revenue for the Sooner State. While cannabis retailers generated about $30 million in state and local taxes in 2019, that number shot up to $71.6 million in 2020.
Despite the Oklahoma marijuana market’s projection-shattering year, the overall number of dispensary licenses in the state declined for the first time since medical cannabis was legalized in 2018. Even though the Oklahoma Medical Marijuana Authority issued over 550 new permits across 2020, overall retail licenses fell by 181.
Though that seems to be about the only downtrending statistic in the bunch, as Oklahoma still led the nation in retail licenses last year, with a reported 2,057 licenses in the state. Colorado trailed over a thousand licenses behind, at a reported 1,024. According to Cannabiz Media, a cannabis marketing platform and licensing database, the remainder of the top seven rounds out like this:
3. California – 719 licenses
4. Oregon – 710 licenses
5. Michigan – 540 licenses
6. Washington – 483 licenses
7. Florida – 307 licenses
Oklahoma’s decline in license numbers goes against trend with other legal cannabis markets throughout the United States. Leading markets like California, Colorado, and Oregon continue to add licenses at a consistent rate, so why the unusual drop in Oklahoma? Looking at the amount of inactive retail licenses in the state can provide insight into the issue.
Between 2018 and 2020, 835 retail licenses have gone inactive in Oklahoma, with 21% of those licenses going inactive last year. While licenses may go inactive for a multitude of reasons, the most common issue is extreme competition and saturation within the market. Looking at the number of retail licenses by city in Oklahoma, it appears that local competition is fierce among retailers:
1. Oklahoma City – 371 retail licenses
2. Tulsa – 191 retail licenses
3. Norman – 63 retail licenses
4. Edmond – 60 retail licenses
5. Lawton – 57
6. Blanchard – 46
7. Ardmore – 41
8. Muskogee – 34
9. Broken Arrow – 34
10. Moore – 32
Looking at the oversaturation of the market, cannabis industry experts are saying that contraction was inevitable.
What Industry Experts Are Saying About Oklahoma’s Decline in Weed Dispensary Licenses
“There are more licensed dispensaries in Oklahoma than Walmart, McDonald’s and Starbucks combined,” said Bud Scott, the Executive Director of the Oklahoma Cannabis Industry Association. “To say there is retail saturation is an understatement.”
With such a large amount of dispensaries opening in such a short amount of time, there’s bound to be a correction at some point. Many leaders in the cannabis industry, including Co-Founder and Chief Data Officer at Cannabiz Media Ed Keating, believe that market correction started with 2020’s decline in licenses.
“Since watching the Oklahoma licensing juggernaut, we knew that there would be a rightsizing at some point,” said Keating. “The market can only sustain so many businesses.”
Dispensary owners are fully aware of the saturated state of the marijuana market. Denise Mink owns the Med Pharm medical dispensary in Tulsa—an area that’s home to nearly 200 retail licenses. Her facility has a number of dispensaries nearby that act as healthy competition, but Denise has seen even more close since she opened Med Pharm’s doors in 2019.
“A dispensary will close, and within a month, a new one will pop up in the same location,” Denise said. And industry experts predict that the landscape of Oklahoma’s marijuana market will continue to rapidly change. As the market matures and expands, franchise operators and multi-state businesses will surely become more prominent, and independent dispensaries will have an even more difficult time competing. But until then, Oklahoma remains the wild west of legal marijuana.
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