updated June 27, 2019
SQ 788 approved by the voters in June 2018, HB 2612 passed by the legislature in March of 2019, and SB 1030 passed by the legislature in May of 2019, all allow Medical Marijuana license holders to obtain marijuana through retail purchases or to grow the marijuana personally. These laws create a 3 tiered commercial system with Growers, Processors and Dispensaries. Growers sell to Processors. Processors prepare consumable forms of marijuana that they sell to Dispensaries (retail stores). Growers and Processors cannot directly sell to consumers (i.e. no tasting rooms on par with local breweries). To what extent can you regulate these commercial activities and/or the growing of marijuana at a license holder's home?
SQ 788 and Local Control
These laws grant municipalities the right to enact measures that increase (but not decrease) the amount of marijuana that a Medical Marijuana license holder may possess. Municipalities may only exercise authority that is granted to them by the OK Constitution or statutes.[i] Municipalities may exercise "police powers" but must "move in the same direction as the legislature but not contrary to or in opposite directions."[ii] Municipalities may enact ordinances that move in the same direction as state law, which is judged by determining whether the ordinance conforms to the provisions of state law and by ensuring that the ordinance does not restrict something that is permitted by state law.
Municipal regulatory authority recognized. All relevant local licenses and permits must be issued by the municipality, including but not limited to, an occupancy permit or certificate of compliance.
In the event that an applicant has not received the necessary permits, certificates or licenses from a municipality, but the applicant has fulfilled all other obligations required by this act, the Authority shall grant a conditional license. A conditional license shall remain valid for a period of one (1) year or until the applicant obtains the necessary local permits, certificates or licenses. An applicant shall not transfer any medical marijuana, concentrate or products to a medical marijuana business, patient or caregiver until approval is received from the Authority.
A licensed medical marijuana business premises shall be subject to and responsible for compliance with applicable provisions for medical marijuana business facilities as described in the most recent versions of the Oklahoma Uniform Building Code, the International Building Code and the International Fire Code, unless granted an exemption by the Authority or municipality.
No city or local municipality may unduly change or restrict zoning laws to prevent the opening of a retail marijuana establishment.
The location of any retail marijuana establishment is specifically prohibited within one thousand (1,000) feet from any public or private school entrance.
Zoning may not ban retail dispensaries. A city or local municipality action that “unduly changes or restricts zoning laws” means to prevent the opening within its boundaries as a matter of law of a retail marijuana retail establishment licensed by the State Department of Health as a medical marijuana dispensary.
Municipal Planning and Zoning. Municipalities may follow their standard planning and zoning procedures to determine if certain zones or districts would be appropriate for locating marijuana-licensed premises, medical marijuana businesses or other premises where marijuana or its by-products are cultivated, grown, processed, stored or manufactured.
No conditional state licenses will be issued if municipal permits, certificates, or licenses are pending.
When Ordinances Conflict with State law: Examples from Alcohol
The irony of using alcohol as a guide to municipal regulation of marijuana is deeper than it might initially seem. When Oklahoma was admitted to the union, it was required to be a "dry" state, but congress included an exception allowing the State to engage in the sale of alcohol "for medicinal purposes."[iii] Further, during an era of national prohibition on alcohol, the State sought to side-step the rules by establishing 3.2% beer as a nonintoxicating beverage - a distinction that would lead to several challenges to prohibition era municipal ordinances banning the sale of all beer, including 3.2% beer.
Banning Beer Sales: Early in our history, a City ordinance banning the sale of 3.2% beer on Sunday was held to be inconsistent with State law.[iv] 3.2% beer was a nonintoxicating beverage, and State law generally allowed the sale of food and beverages for on site consumption on Sunday. Because the ordinance prohibited a sale that the general laws of the State allowed, it was held to be inconsistent and, thus, invalid.
Banning Through Building Codes: Efforts to use highly restrictive building requirements to effectively limit (or eliminate) the ability to sell 3.2% beer were similarly invalidated.[v] The courts reasoned that the legislature established detailed requirements to be met in order to sell 3.2% beer. If municipalities could "enlarge" the requirements to engage in the sale of 3.2% beer, then municipalities would effectively have the power to deprive individuals meeting all State requirements from exercising their right to sell 3.2% beer. Once again, an ordinance was held to restrict and even prevent an activity that was permitted by State law.
Banning Through Zoning Codes: Challenges to zoning ordinances contained some nuance. A municipality could determine where grocery stores would and would not be allowed within their community. But if a grocery store was located in a proper zoning district, the City could not, by ordinance, ban the sale of 3.2% beer at that store via a "within 300 feet of a school" ordinance if the sale of 3.2% beer at that location would be permitted under State law.[vi] It is noteworthy, however, that the Court signaled that a City could ban grocery sales in an area without offending State law. The issue was only that the City sought to allow grocery sales while disallowing the sale of a nonintoxicating beverage that could be sold under State law.
Banning Through Business Codes: One final example comes in the form of an attempt to ban 18-20 year old citizens from working for or entering nude establishments that sold 3.2% beer. The ordinance was invalidated as conflicting with State statutes that authorized a person of the age 18-20 to patronize and be employed by establishments that only sold 3.2% beer.[vii] Once again, an ordinance prohibited an activity that was expressly permissible under State law.
As noted above, municipalities may enact zoning regulations related to Growers and Processors so long as their regulations are not inconsistent with State law. Put differently, the only tier of the 3 tier system for marijuana distribution that is subject to an affirmative restriction by state law is the retail sale tier.
Municipalities cannot impose, through zoning or other ordinances, restrictions on who may open a Grower or Processor operation. Such a restriction would very likely be invalidated if it prohibited a person from engaging in a business if they met all state law requirements. Further, municipalities cannot restrict by ordinance how much marijuana a Grower may grow at any time since 63 O.S. §422A(D) expressly states that "there shall be no limits on how much marijuana a licensed grower can grow.”
As for zoning ordinances, municipalities have broader authority to regulate where Growers and Processors could locate within the jurisdictional limits. It is recommended that you not completely ban such activities outright as such a ban would likely be challenged and a strong argument could be made that you are prohibiting an activity that is legal under State law.
As for proximity restrictions, in particular buffer zones between Growers/Processors and, say, churches or schools, this is a harder issue. §425A(G) expressly prohibits retail establishments within 1,000 feet of a public or private school entrance. By implication, the only commercial operation prohibited within 1,000 feet of a school is a retail establishment. If proximity was not addressed in state law, it would be easier to argue that municipalities could enact any proximity restriction they deem necessary and proper for the promotion of the health, safety and welfare of their citizens. But since state law addresses proximity, at least as to schools, and applies the restriction to only retail sellers, the argument would follow that Growers and Processors can locate as close to a school as they wish. Municipal ordinances which impose proximity restrictions (at least as to schools) arguably would prohibit an activity that is legal at State law.
State law prohibits municipalities from "unduly" changing or restricting their zoning laws to prevent the opening of a retail marijuana establishment. As noted above, this is not a grant of authority but, rather, a restriction on an existing municipal right. The restriction includes two key words: "unduly" and "prevent". SB 1030 helps define these terms as preventing the opening within its boundaries as a matter of law of a retail marijuana establishment licensed by the State Department of Health as a medical marijuana dispensary.
The Oklahoma Supreme Court has interpreted the term "undue" when used to qualify some statutory power or authority as meaning excessive or exceeding what is appropriate or normal.[ix] Minor changes in municipal zoning codes would thus seem to be permissible. Overhauls to municipal zoning codes may garner strict review by the Court to determine whether the impact has the effect of preventing retail establishments from opening in the municipal limits.
OMAG's advice to our members is that there is express statutory authority to amend your zoning codes so long as those amendments are not excessive and geared toward preventing retail establishments from opening within your jurisdictional limits.
Additional areas of concern include attempts to restrict who may engage in retail sales above and beyond what state law has established. As with Growers and Processors, municipalities cannot impose greater restrictions on who may engage in the lawful sale of Medical Marijuana if it would have the effect of prohibiting a person from engaging in that activity who would otherwise meet all State law requirement.
Another area of concern would be proximity ordinances that are more restrictive than 63 O.S. §425A(G). State law prohibits the retail sale of marijuana within 1,000 feet of an "entrance" of a school. Municipalities cannot enact proximity restrictions that would prohibit the opening of a retail establishment that would otherwise meet the requirements of state law. So, for example, a municipal ordinance prohibiting retail establishment within 1,000 feet of the property line for a school would be more restrictive than §425A(G) and would likely be invalidated in a legal challenge. So too would ordinances that increased the 1,000 foot proximity to a school entrance restriction. As to other proximity restrictions, state law is silent, which arguably grants municipalities broader authority to enact other proximity restrictions.
State law is silent on whether municipal zoning regulations can be used to attempt to regulate or prohibit Medical Marijuana license holders from growing marijuana plants at home. State law does grant a right of a license holder to possess plants for personal use. As discussed above, since state law is silent as to where this activity may take place, municipalities arguably have broader authority to regulate the activity. A municipality may regulate what properties may be used for residential purposes but, having done so, municipalities would be hard pressed to prohibit a resident from engaging in the lawful growth of marijuana pursuant to their license.
The Department of Health voted July 10, 2018, to adopt emergency rules implementing SQ 788.[x] The Proposed Permanent rules were promulgated by the Department of Health in January of 2019. [i] The Permanent Rules marks as “Reserved” rule 310:681-2-13 previously applicable to the home growth of Medical Marijuana. . OMAG would recommend that, if any ordinance is to be adopted, it should require compliance with State law and Department of Health rules and regulations.
Lastly, while there are likely limits on your ability to regulate personal marijuana growth by license holders, there assuredly will be disputes between landlords and tenants over the issue. 63 O.S. §425A(A) prohibits landlords from making decisions based on a person being a license holder. That does not mean, however, that landlords must allow tenants to grow marijuana on the landlord's property. The prior rule that required written consent from the landlord before a tenant may grow marijuana has been withdrawn. The growing of marijuana may not be desirable to the landlord. Further, landlords would rightfully be concerned about being in unlawful possession of marijuana should a tenant vacate the premises without ensuring that all plants were removed (and would not return).
[i] The website link for the proposed Permanent Rules is https://www.ok.gov/health2/documents/310-681%20Permanent%20Medical%20Marijuana%20Packet.pdf.
i. Elias v. City of Tulsa, 1961 OK CR 59, ¶ 4, 364 P.2d 678, 680; Okla.Const. art. VII, § 1.
ii. 3 McQuillin on Municipal Corporations §894; Ex parte Johnson, 1921 OK CR 202, 201 P. 533; Ex parte Johnson, 1917 OK CR 3, 161 P. 1097.
iii. see the 1906 Oklahoma Enabling Act, https://www.loc.gov/law/help/statutes-at-large/59th-congress/session-1/c59s1ch3335.pdf last visited July 29, 2018
iv. Sparger v. Harris, 1942 OK 418, 131 P.2d 1011; Ex parte Pappe, 1948 OK CR 128, 201 P.2d 260.
v. Ex parte Gammel, 1949 OK CR 81, 208 P.2d 961.
vi. 7-Eleven, Inc. v. McClain, 1967 OK 7, 422 P.2d 455.
vii. Fancy's Entertainment L.L.C. v. City of Enid, 2007 OK CIV APP 112, 171 P.3d 928
viii. Sub-F could have been worded "A city or local municipality may enact zoning laws related to the retail sale of marijuana so long as such laws do not unduly restrict the opening of retail establishments." Instead of using an affirmative grant of authority, the drafters of SQ 788 worded Sub-F as a restriction on an already existing right: "No city or local municipality may unduly change or restrict zoning laws to prevent the opening of a retail marijuana establishment."
ix. Young v. Macy, 2001 OK 4, ¶15, 21 P.3d 44, 48
x. The Department is set to adopt amended rules in response to the advice of the Attorney General. A summary of the proposed revisions, as well as the proposed new rules, are available online. The residential growth rules are not the subject of any proposed amendments.
DISCLAIMER: OMAG has reviewed SQ 788, existing OK statutes and case law as well as statutes and case law from other states that have legalized marijuana to some degree. OMAG cannot predict how our Legislature or Courts will respond to SQ 788 and can only offer our best advice on the subject. OMAG members seeking legal advice on SQ 788 should be aware that there may not be clear-cut answers on some of the issues for some time. OMAG offers this guidance to help your municipality make informed decisions about policies and procedures, directly or indirectly related to medical marijuana, until some of the issues can be decided by the Legislature or the Courts.