Oklahoma medical marijuana regulators sued over seed-to-sale tracking

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An Oklahoma medical marijuana operator filed a lawsuit seeking to halt the April 30 implementation of a seed-to-sale tracking program in the state, raising the question of its legality.

The suit by DR Z Leaf of Tulsa, which seeks class action status, questions whether the Oklahoma State Department of Health exceeded its legal authority in implementing a seed-to-sale program and requiring more than 10,000 MMJ licensees to pay for the program.

The suit, filed in Okmulgee County District Court this week, also questions whether the contract between the state and Florida-based Metrc “constitutes the creation of an unlawful monopoly.”

The legal challenge reflects the tension between some Oklahoma medical marijuana businesses and the state over increasing regulations and the cost of complying with those standards.

As of March 2, Oklahoma had 10,587 active medical marijuana business licenses, according to the state.

Oklahoma launched a wide-open medical cannabis market in 2018, but additional regulations have since been put in place in large part to conform with industry best practices.

Terri Watkins, spokeswoman for the Oklahoma Medical Marijuana Authority (OMMA), told Marijuana Business Daily on Friday that the state doesn’t comment on pending litigation.

Metrc spokeswoman Bronwyn Flores also declined comment on the suit, which lists only the state and OMMA as defendants.

KOKH, a Fox TV affiliate in Oklahoma City, quoted several MMJ operators complaining about the tracking program including the prices charged by Metrc.

RFID tags cost 45 cents per plant for growers and 25 cents per package for wholesalers.

Flores told MJBizDaily that Metrc’s software and plant-tag fees are standard across the 16 markets it serves.

Metrc has seed-to-sale contracts in 15 states, including Oklahoma, and in Washington DC.

Seed-to-sale tracking systems in state-legal marijuana markets are served by one software provider so there is a centralized system for inventory tracking. The contract for the provider is awarded after a competitive bidding process.

The Metrc system replaces mandatory monthly reports that Oklahoma medical marijuana businesses were sending to OMMA.

Many businesses were doing those reports on paper, so transitioning to an electronic system has been a costly adjustment for some. Metrc has been providing training on its system.

“There’s always challenges coming into a market that’s already been established with a lot of questions from (businesses), and rightfully so,” Flores said.

But from Metrc’s viewpoint, she said, the implementation has been going well.

– Jeff Smith