Oklahoma Supreme Court declines challenge to Marijuana license fee increases
Oklahoma Supreme Court Defers Challenge to Medical Marijuana License Fee Hikes.
The Oklahoma Supreme Court declined this week to consider a challenge to a bill dramatically raising fees associated with medical marijuana licenses, kicking the lawsuit down to district court in Oklahoma County.
The decision not to exercise jurisdiction at this point was contained in a brief order and supports the position of the Oklahoma attorney general’s office. Seven justices concurred, one dissented and one did not vote.
The case was filed in June, when a law went into effect raising license fees for medical marijuana dispensaries, growers, processors and testing laboratories.
The fees for all had been a flat $2,500. The new law established fee structures for growers that can top $50,000 a year based on the size of the operation.
A new fee schedule for processors set the maximum at $20,000, while dispensary license fees could reach up to $10,000 based on annual sales. The fee for testing lab licenses rose to $20,000.
The lawsuit, filed by a grower, a dispensary, a processor and the founder of Oklahomans for Responsible Cannabis Action, claims the Oklahoma Legislature violated constitutional provisions required for the passage of revenue, or tax, bills.
The bill, which was approved in the final days of the 2022 legislative session, was enacted too close to the end of the session and lacked the required supermajority for revenue bills, the lawsuit says. Also, in “arbitrarily” setting various fees for businesses in the same broad industry, the bill is discriminatory and falls into the unconstitutional category of a special law, the lawsuit claims.
The Oklahoma attorney general’s office argued that the bill was not a revenue measure subject to the constitutional provisions cited by the marijuana businesses, primarily because it was approved not to raise money — the state had a huge budget surplus already — but to increase public safety by decreasing the oversupply of marijuana.
What to know about Oklahoma's medical marijuana license fees at issue
The fees are licensing fees meant to compensate the Oklahoma Medical Marijuana Authority for regulating the industry, the state attorneys told the Supreme Court, and “this court has never held that a license fee paid by a regulated industry is a tax.”
The businesses challenging the law “raise the specter of fees potentially increasing from $2,500 to $50,000, but it is likely that the vast majority of marijuana businesses will not see an increase in fees — and especially not an increase that large,” the state attorneys argued.
“The only growers, processors, and dispensaries that will see increases are those that produce a disproportionately large amount of marijuana. Those businesses place greater strains on OMMA.”
The attorney general’s office said the argument that the law discriminates among businesses in the medical marijuana industry was meritless because the new law applies equally to all businesses within the distinct categories.
And, even if that were not the case, the law would pass muster because the fee structure has a valid legislative objective — decreasing the oversupply of marijuana, the state attorneys said.
“The tiered system ensures that growers and processors that inject the most marijuana into the market pay more for the resulting regulatory strain,” the state argued.
