Isaiah N. Brydie, Esq.
Corporate Structures Medical Marijuana Businesses
Businesses established to serve the medical marijuana market in Oklahoma face all the usual considerations and issues surrounding business entity formation. For medical marijuana businesses in Oklahoma the issues only start there.
Beyond determining the best entity structure, businesses must carefully consider the implications of these decisions — not only with regard to local, state and federal tax matters and the like but also with regard to requirements under Oklahoma medical marijuana statutes along with the requirements for licensing as a medical marijuana business.
Moreover, the benefits and drawbacks of certain business entities may not apply in the context of businesses engaged in Oklahoma medical marijuana business. This web of complexity is enough to trip up even the most diligent of business operator. Medical marijuana businesses should consult a medical marijuana attorney before deciding details of entity formation. If a business entity has already been chosen, a medical marijuana lawyer should be engaged immediately to begin a compliance audit that will review and evaluate any existing or future legal issues.
What are the Requirements Regarding Business Structure?
Challenges start with who may own a business licensed for Oklahoma medical marijuana. They don’t end there. The most significant limitations include:
- All owners and officers of any business licensed under the OMMA must be fully disclosed to the Oklahoma Department of Health;
- Ownership of a licensed business must be at least 75 percent owned by owners who qualify as Oklahoma residents; and
- All owners are subject to criminal background checks. A business may be disqualified from licensure due to criminal convictions or even allegations against a single “owner.”
Furthermore, licensed businesses have an affirmative duty to continuously update the Department of Health about changes that could impact the business’ licensing status. That means that a business already licensed could be put at risk simply through a single “owner” facing a new criminal charge. The requirements and their definitions are too complex to fully address in an online article. A medical marijuana Oklahoma lawyer should be consulted about the backgrounds of all business owners.
What is an “Owner” of an Oklahoma Medical Marijuana Business?
Ownership under the OMMA statutes is defined more broadly than in other contexts. Minority investors, all business officers and even managers under certain circumstances are regarded as “owners” for purposes of determining who is subject to disclosure to the Department of Health. All owners are subject to a background check that could disqualify the business from obtaining, renewing or keeping a medical marijuana license. Loss of a license will effectively shutter any Oklahoma medical marijuana business entirely, so the stakes can hardly be higher.
Get Help with Medical Marijuana Business Formation Now
Any person seeking to set up a medical marijuana business in Oklahoma, planning to seek a license or otherwise deal in the industry can contact us for help today. Your first consultation with our medical marijuana lawyer is free: (918) 932-2879.