Oklahoma Medical Marijuana Authority Regulatory Framework and Current

Oklahoma Medical Marijuana Authority: Regulatory Framework and Current Status April 25, 2019 Melissa Miller OMMA Communications Manager Nicole Nash Assistant General Counsel

Overview ØProvide an overview of OMMA and program status ØDescribe the regulatory framework of the program ØReview the application process ØDiscuss next steps and challenges 2

Overview of OMMA 3

Oklahoma Medical Marijuana Authority ØAfter the passage of the State Question, OSDH established the Oklahoma Medical Marijuana Authority (OMMA). ØThis program area is responsible for managing the medical marijuana program, including application processing, licensing, and compliance monitoring. ØPublic information related to the program is maintained on the OMMA website, http: //omma. ok. gov, as well as Facebook and Twitter. 4

Program Beginnings The State Question mandated certain timeframes related to the implementation of the medical marijuana program. 6/26 Passage of SQ 788 30 days • 7/26 30 days Application requirements and instructions available on omma. ok. gov for patients, caregivers, growers, processors, and dispensaries • 8/25 OMMA receives applications through online system 14 days • 9/10 First approval/denial letters and licenses mailed to applicants 5

By the Numbers ØOver 1, 500 applications received by 5 pm 8/25 ØOver 2, 100 applications received by 8 am 8/27 ØOver 106, 000 applications received as of 4/15 o 101, 939 patients/caregivers o 4, 820 businesses ØMore than 94, 000 applications have been processed and approved as of 4/15 o 89, 919 patients/caregivers o 4, 466 businesses (2, 464 grower, 685 processor, 1, 317 dispensary) 6

By the Numbers Approximate Number of Applications Received by Month 100000 90000 87, 100 80000 70000 65, 800 60000 50000 47, 800 40000 33, 100 30000 20, 300 20000 10000 0 12, 800 5, 700 1600 September 2000 October 2400 November 2800 December Patient 3200 January 3700 February 4, 300 March Business 7

Oklahoma: How We Compare ØMost rapidly developed program in the nation—within 60 days of passage of SQ 788 ØNo caps on the number of licensed businesses by total number or as a ratio of population ØNo qualifying conditions—many states have a list of conditions the patient must be diagnosed with to be licensed as a patient 8

Regulatory Framework 9

State Question 788 ØMakes it legal to possess, cultivate, manufacture, and/or sell medical marijuana, medical marijuana products, and paraphernalia. ØSpecifies 8 license categories: medical marijuana (patient), caregiver, dispensary, commercial grower, processing, transportation, research, temporary (out-of-state). ØEstablishes a regulatory program under the Oklahoma State Department of Health (“OSDH”) and specifies deadlines. ØAllows inspections of processing sites and requires auditing of monthly reports from dispensaries, growers, processors, and researchers. ØCodified as 63 O. S. §§ 420 A, 421 A, 422 A, 423 A, 424 A, 425 A, and 426. 10

SQ 788 – Beyond Licensing Ø Possession of 1. 5 ounces without a license by a person who can state a medical condition is a misdemeanor with fine not to exceed $400. Ø Prohibits schools and landlords from discriminating against person based solely on status as medical marijuana license holder. Ø Requires use to be considered equivalent to any other medication and cannot be used to disqualify patient medical marijuana license holder from medical care. Ø Prohibits any presumption of neglect or child endangerment for conduct allowed under law, unless unreasonable danger to safety of minor. Ø Prohibits the unduly withholding of a state issued license based on status as medical marijuana license holder, including concealed carry permit. 11

SQ 788 – Provisions for Employers & Zoning Ø Specifies an employer may not discriminate against a person in hiring, termination or imposing any term or condition of employment or otherwise penalize a person based solely upon: • The person’s status as a license holder; • The results of a drug test showing positive for marijuana. Ø Employers may take action against a license holder if the holder uses or possesses marijuana while in the holder’s place of employment or during hours of employment. Ø Employers may not take action against a license holder based solely on the status as a license holder. Ø No city or local municipality may unduly change or restrict zoning laws to prevent the opening of retail marijuana establishments. 12

Emergency Rules Approved by the Board of Health Ø The Board of Health approved the emergency rules for the implementation of a medical marijuana program on July 10, 2018. Ø The Oklahoma Attorney General issued a letter to OSDH Commissioner on July 18, 2018 indicating that the Board of Health promulgated several rules in excess of its statutory authority. Ø The revised emergency rules were posted publicly and adopted by the Board of Health on August 1, 2018. Ø The Governor approved the emergency rules on August 6, 2018. Ø Emergency rules published in Oklahoma Administrative Code 310: 681. 13

Emergency Rules Developed by the Food Safety Standards Board Ø These rules apply to all edible medical marijuana products (produced by processors) • Infused food and beverages, tinctures Ø Requires edible medical marijuana product labels to meet the federal standards set forth in 21 CFR 101 AND requires labels to include: • List cannabis ingredients; • The batch of marijuana; • The strain of marijuana (optional); • THC dosage in milligrams per unit; and • The lot code. 14

Food Safety Standards Board Ø SQ 788 and OAC 310: 681 -5 -8 provide for the implementation of a Medical Marijuana Industry Expert Board/Food Safety Standards Board comprised of 12 Oklahoma residents. Ø Board includes individuals with environmental science, food safety, health, or other relevant expertise. Ø Approved a set of recommended standards on 8/24 that were made available 8/27. Ø The Board of Health approved the FSSB rules on 12/11/18 and Governor Fallin signed them on 12/20/18. 15

Emergency Rules Developed by the Food Safety Standards Board Ø Requires packaging to: • Contain the statement, “For accidental ingestion call 1 -800 -222 -1222. ” • Contain the Oklahoma Uniform Symbol in clear and plain sight. Ø Requires quarterly testing of one lot of each type of product for: • Microbials (yeast, mold, E. coli, Salmonella) • Solvents and chemical residue (acetone, butanes) • Metals (lead, arsenic, mercury) • Pesticide residue • Potency (levels of total THC) • Contaminants and filth Ø Provides for recall of products exceeding thresholds 16

Adult and Minor Patient Licenses (OAC 310: 681 -2 -1, 2 -2) Ø No qualifying conditions. Ø 2 -year license (or, in case of minor, when minor turns 18). Ø $100 fee, or $20 if sufficient proof they are Medicaid/Medicare eligible. Ø Requires physician recommendation; 2 for minors. Ø Application records and information for medical license applications sealed. Ø Temporary licenses for out-of-state residents who hold a valid medical marijuana patient license in another state, may be issued for 30 -days. 17

Caregiver Licenses (OAC 310: 681 -2 -3) Ø Caregiver must be Oklahoma resident. Ø Adult patient license holder may only have one caregiver. Ø Minor license holder may have two parents/legal guardians as caregivers. Ø Requires physician attestation that patient is homebound or does not have capability to self-administer or purchase medical marijuana due to developmental disability or physical or cognitive impairment. 18

Caregiver Licenses (Continued) Ø No fee. Ø Valid for duration of patient license unless withdrawn, not to exceed 2 years. Ø Patient can withdraw caregiver license at any time upon electronic notification to Department. No appeal. Ø No restrictions on number of patients a caregiver may have. 19

Commercial Establishments Ø Ø Ø 1 -year license. $2, 500 fee. 1 license per location. No transfer of licenses. Eligibility requirements: • • • Applicant must be 25 or older All members, managers, and board members must be OK residents 75% of the business must be owned by OK residents Registered to do business in Oklahoma All owners subject to background checks. No nonviolent felony convictions in past 2 years. No violent felony convictions in past 5 years. 20

Commercial Establishments – Grower Ø Licensed to grow, harvest, and package medical marijuana. Ø May sell to dispensaries, processors, or researchers. Ø May NOT sell directly to consumers. Ø Sales are wholesale and not subject to taxation. Ø Not subject to inspections by OMMA. 21

Commercial Establishments – Processor Ø Licensed to prepare, manufacture, process, and package medical marijuana and medical marijuana products. Ø May purchase from growers. Ø May sell to dispensaries, other processors, or researchers. Ø May NOT sell directly to consumers. Ø May manufacture concentrate for consumer for fee. Ø Subject to annual inspections (or more, upon complaint). 22

Commercial Establishments – Dispensary Ø Licensed to purchase and sell medical marijuana. Ø May purchase from growers and processors. Ø May sell to licensed patients, parents/legal guardians if applicable, and caregivers. Ø Not subject to inspections by OMMA. 23

Commercial Establishments – Research Ø SQ 788 authorizes OSDH to grant special research licenses. Ø Not subject to the same 30 - and 60 -day implementation deadlines for other commercial establishments. Ø Must meet same criteria established for other commercial establishments (currently). *OSDH is not currently accepting research applications at this time. 24

Commercial Establishments –Transportation Ø Transportation license issued automatically upon approval of commercial license. Ø Authorizes transportation among commercial licensees. Ø No home delivery. Ø Locked container shielded from public view. Must be labeled “Medical Marijuana or Derivative. ” 25

Commercial Establishments –Prohibited Acts Ø Ø Ø Ø Failing to submit monthly report. Filing report with gross error(s). Unlawful purchase or sale of medical marijuana. Allowing the consumption of alcohol, medical marijuana, or medical marijuana products on premises. Employing any person under age of 18. Delivery of medical marijuana or medical marijuana products to consumers. False advertising or advertising/promotion that would attract minors. Dispensaries being located within 1, 000 feet of a public or private school. 26

OMMA Business Complaint From Ø The OMMA Business Complaint Form is the preferred method to report complaints. Ø OMMA has been working closely with state and local law enforcement agencies to link their investigation results with penalties applicable under the OMMA’s authority. VIOLATION Failure to file timely monthly report Inspection violation Inaccurate/Fraudulent reporting with gross error Unlawful purchase and sale PENALTY License revocation when a licensee wholly fails to submit a report and fails to correct the violation within 30 days of notice. Written notice of violation. Failure to correct violation within 30 days of receipt of notice - $500 fine per deficiency. 1 st offense in any 2 year period - $5, 000 fine. If fine is not paid in 30 days after receipt of notice, license shall be revoked. Any additional inaccurate report findings – license shall be revoked. 1 st offense in any 2 year period - $5, 000 fine. If fine is not paid in 30 days after receipt of notice, license shall be revoked. Any additional unlawful purchase and sale findings – license shall be revoked. 27

Application Requirements 28

Patient Application Requirements ØProof of residency and identity (e. g. , driver’s license) ØPhotograph ØPhysician recommendation form dated within 30 days of application o Physicians must meet certain criteria to be eligible to recommend ØTwo-year license costs $100 ($20 for enrollees of Medicaid or Medicare) 29

Caregiver Application Requirements ØProof of residency and identity (e. g. , driver’s license) ØPhotograph ØCaregiver Designation Form signed by the patient licensee ØPhysician Certification of Need for Caregiver ØNo fee ØExpires when the associated patient license expires 30

Business Application Requirements ØAll owners must provide a background check; nonviolent felony convictions in the last two years and any other felony conviction in the last five years for any owner will disqualify the applicant. ØUnless the business is a Sole Proprietorship/General Partnership, Certificate of Good Standing from the Secretary of State is required. ØDispensaries must provide proof that they are not within 1, 000 feet of any entrance to any public or private school. ØGrower, Processor, and Dispensary applicants must register with the Oklahoma Bureau of Narcotics and Dangerous Drugs Control (OBNDD) after receiving a license from OMMA. 31

Patient Licenses and Verification 32

What is on the patient license? Ø Ø Ø Ø Digital photograph Patient Name Parent/Legal Guardian name, if minor Patient DOB City and County of residence Type of license Expiration date Unique 24 -character control number • Used in OMMA verification system to confirm validity of license 33

License Verification 34

License Verification https: //ommaverify. ok. gov/ 35

Next Steps and Challenges 36

Permanent Rules Ø Public comment period for permanent rules ended March 20 Ø Permanent rules do not make statutory changes to the language of SQ 788 but rather make operational and regulatory changes and clarifications to more effectively run the program Ø License verification required at point of sale Ø Copies of business and transportation licenses required during transport Ø Outlines process for patient surrender of license Ø These rules have been sent to the legislature and the Governor for approval Ø Will be effective upon Governor’s signature, likely in late spring/summer 37

Unity Bill Policy Changes ØHB 2612– “Unity Bill” – comprehensive bill that expands licensing categories: • Stand-alone transporter licenses • Transporter agent licenses • Testing laboratory licenses • Education facility licenses • Allows growers to sell seeds/flower/clones to other growers • Allows dispensaries to sell to other dispensaries. 38

Unity Bill Policy Changes ØBusinesses: • Expands OMMA inspection authority to all businesses with 24 hour notice/twice per year • Requires all relevant local licenses and permits before licensure; conditional licenses can be granted • Requires inventory manifest for transport • Changes how Oklahoma residency is established • Exempts financial and private business information for the Open Records Act • Adds preschools to the definition of school 39

Unity Bill Policy Changes ØPatient/caregivers: • Adds requirements regarding growing by patients/caregivers and extracting in residential areas (butane, propane, carbon dioxide prohibited) • Prohibits municipal and county governing bodies from enacting guidelines/permits/licenses that restrict licensed patients and caregivers from possessing, purchasing, cultivating, or transporting • Caregiver limited to growing for only 5 patients • Adds language regarding “safety-sensitive” jobs • Explicitly states that license holders shall not be denied the right to own, purchase, or possess firearms due to their status as licensee 40

Unity Bill Policy Changes ØPhysicians: • Removes board certification requirement for recommending physicians • Allows physician to notify OMMA if patient no longer meets the requirements for a patient license and triggers revocation • Allows OMMA to contact the recommending physician to verify applicants’ need for license 41

Impact of Potential Legal/Legislative Action • Pending lawsuits, any resulting orders, and other pending legislation could potentially change certain aspects of the program or delay implementation. • HB 1389 and SB 765 would amend the “Smoking in Public Places and Indoor Workplaces Act” to include medical marijuana smoking and vapor. • HB 2601 and SB 887 would authorize counties to establish system to approve possession by patients/caregivers above state limits for fee of $250. 00. 42

Contact Information Sam Mc. Clendon OMMA Compliance Manager Complaints, inspections Samuel. M@health. ok. gov 405 -271 -9444 ext. 49430 Adrienne Rollins, OMMA Director Operations and enforcement inquiries Adrienne. R@health. ok. gov 405 -271 -9444 ext. 57907 Scott Chisholm OMMA Commercial Services Manager Business license verification, applications Scott. C@health. ok. gov 405 -271 -9444 ext. 43554 Nicole Nash OSDH Assistant General Counsel Policy and legal inquiries Nicole. N@health. ok. gov 405 -271 -9444 ext. 56053 43

Contact Information Oklahoma Medical Marijuana Authority Website: http: //omma. ok. gov Facebook/Twitter: @OMMAOK 44