“I don’t want to paint with a broad brush and say that’s all of these Chinese growers,” Woodward said. “I can tell you though, the reason so many of them (cases) that we’ve worked are Chinese-operated and owned are because they’re all tied to the same investigation that we’re working.”
There also have been locals arrested for starting unlicensed operations. Woodward said there is some intelligence on potential Russian organizations coming to Oklahoma. “We’re getting some tips that there’s certain farms operated by Russian organizations that they’re asking us to look into,” he said. “So … they’re coming from everywhere.”
The land rush is sparked by multiple factors, Woodward said. One is Oklahoma’s low land costs compared to other states, whether those grow businesses are legal or not. People growing marijuana in California or Colorado can come to Oklahoma, pay multiple times what the land is worth, and still pay a fraction of what they were paying before.
Even with roughly 383,128 state residents now with medical marijuana prescriptions — basically one in every 10 residents of the state — there is strong evidence way more marijuana is being grown in Oklahoma than residents can inhale or consume.
Other factors include the cheap regulatory costs. A grow license in Oklahoma is $2,500 to the state’s Medical Marijuana Authority and another $500 to the Bureau of Narcotics. The state also has no cap on the number of licenses, or limits on the number of plants, per farm.
“And, so our laws are some of the least-restrictive in the United States,” Woodward said. “And those things combined, I think, are the reason why Oklahoma is so attractive for … the Chinese, Hispanic, Russians, or even U.S. citizens coming in and bringing their operations to our state.”
While it’s easy to spot as many as a half dozen medical marijuana dispensaries just sitting at a red light in Oklahoma City, the high number of grow operations are producing way more product than can be smoked or consumed in the state. Also, a pound of marijuana sold illegally outside of the state can be worth five or six times more than it can be sold for legally in the state.
“There’s just not that big of a market here in Oklahoma to support all of this,” Woodward said. “And, so we know that many of these are growing here because of our economy and land prices; but the product is all going out of state.”
FARMER CONCERNS GROWING
Last month, Oklahoma farm groups created a task force to look for solutions to the “exponential growth of the medical marijuana industry” across the state. Farmers and livestock producers have complained about inflated land values, demands on electrical and water resources and concerns that pot operations could affect the ability to spray pesticides or fertilizers on traditional field crops.
“It’s a challenge for us at Farm Bureau where we’re big on private property rights and so forth,” said Rodd Moesel, president of the Oklahoma Farm Bureau in an interview with DTN. “A lot of the things people talk about as solutions can take away rights from the farm farmers. We’re trying to be real careful. We don’t want to take long-term actions for short-term problems.”
Roughly 400,000 state residents, about 10% of the population, have a medical marijuana prescription, which surprises Moesel. “I never would have thought so many Oklahomans would get a medical marijuana card,” he said. “It’s not recreational, but you can get a two-year prescription. So the doctor can prescribe it if he thinks you need it for a hangnail. You can get your prescription for nearly any medical condition.”
At meetings around the state, Moesel said one of the biggest complaints about the marijuana rush is how it is driving up land prices, though he noted land prices are going up across the country for various reasons. Moesel said he is surprised at the volume of dispensaries and grow operations across the state, but expects eventually there will be some market corrections.
Often facilities will look like any large greenhouse operation surrounded by high fencing. Others will have several large metal buildings with multiple air conditioning units and electrical transformers. Moesel pointed to the large amounts of electrical infrastructure being run to support the grow operations.
“It’s not cheap to build the infrastructure, you know, for that kind of service,” Moesel said. “So if something’s going to be there and gone in six months or a year, you know, the rest of the ratepayers can be paying expenses for, you know, for a long time for something that doesn’t last and so there’s a lot of concern about whether they’re, whether they’re making huge capital outlays that are going to be long term or short term.”
Among the increased complaints at local meetings also has been the increased odor that comes from the proliferation of large marijuana grow operations. A rural postal carrier told DTN it is quickly obvious to recognize when a new growing facility has arrived.
NEW STATE LAW
Gov. Kevin Stitt signed a new law in late May tightening some restrictions on dispensaries and oversight of grow facilities. Some lawmakers who worked on the legislation said the proliferation of grow facilities in rural areas was becoming the top concern for their constituents. Among one of the top priorities for rural lawmakers was ensuring grow operations adhere to state law that prevents foreign ownership of land in the state. People applying for grow licenses must show that 75% of the business partners and managers are Oklahoma residents.
Woodward said farmers and business groups like local chambers of commerce want more enforcement, but he also stressed that simply because the workers may be foreign, that does not make the operation illegal. Still, he expects crackdowns on illegal operations to increase, and that could lead to property seizures as well.
“It looks like the Wild West right now because it has been kind of anything goes. But we’re really hoping to send a message and go aggressively not only with criminal charges, but eventually start seizing and forfeiting this land and auctioning it back off so there’s an opportunity for it to come back into the hands of Oklahomans.”
Chris Clayton can be reached at Chris.Clayton@dtn.com
Follow him on Twitter @ChrisClaytonDTN
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