Oklahoma Notches Win in Fight Against Fraudulent Ownership of Medical Marijuana Businesses
OKLAHOMA CITY – The Oklahoma Medical Marijuana Authority (OMMA) earned a significant victory in the ongoing fight to eliminate bad actors in Oklahoma’s cannabis industry, and more wins are likely on the way.
An administrative law judge ruled on March 15 that Sun Light Farm LLC, a grow operation in Sayre, submitted fraudulent ownership information in its license renewal application. The ruling cleared the way for OMMA to deny the application and remove the business from Oklahoma’s medical marijuana 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,” said Gov. Kevin Stitt. “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 and OMMA rules require at least 75% of every medical marijuana business to be owned by an Oklahoma resident or residents. The judge agreed with OMMA’s legal team and investigators that the Oklahoma resident included in Sun Light Farm’s ownership documentation is not the real owner – a practice sometimes known as straw ownership or ghost ownership.
“This is a preview of what’s coming from OMMA as we continue to build our legal and investigative teams and capabilities,” said OMMA Executive Director Adria Berry. “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. This was a clear case of fraudulent ownership where non-Oklahoma residents tried to illegally work their way into our state.”
OMMA became an independent state agency with its own rules on Nov. 1, and this is the first time since then that OMMA tried a case of suspected straw ownership. Berry hailed the development as a sign of things to come.
“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.”
OMMA’s legal team and investigators are reviewing suspected cases of fraudulent ownership in more than 70 business license applications, including applications for new businesses filed before a moratorium began in August on new grower, processor and dispensary licenses.
More potential referrals for investigation are in the pipeline as OMMA scrutinizes every application.
OMMA is also focused on activity by licensed businesses to ensure compliance with state law and OMMA rules. Active investigations are likely to yield other legal actions that help rid Oklahoma’s medical marijuana industry of bad actors.
The statewide seed-to-sale inventory tracking system, along with automated analysis of the system’s data, are significant tools added to OMMA’s toolbox within the last year that help guide those investigations.