In Oklahoma, illicit growing operations are dominating the medical cannabis market, and it’s taking a toll on local growers.
"When Oklahoma passed the State Question 788 [the Medical Marijuana Legalization Initiative] in June 2018, really for about the first two and a half years, we had very little, criminal activity that worked its way into our lane," says Mark Woodward, the public information officer at Oklahoma Bureau of Narcotics (OBN). "But in the last six to eight months, we’ve seen an influx of both legal and criminal organizations pouring into Oklahoma and applying for a license."
Woodward says the OBN has shut down more than two dozen criminal growing operations between April and June, and the organization currently receives about 30 to 100 tips a week of suspicious farms.
There are a few standard methods of illicit cannabis operations the OBN is recognizing, he says.
"We’ve got some dispensaries that are selling out-of-state [illicit] market products from places like Nevada and California coming here," he says. "We’ve got some criminal organizations that come here, and they just start growing. They never get a license, and they think because it’s so overwhelming in Oklahoma, nobody will notice as we’ve got over 7,300 licensed growers."
The operations that are growing without a license have been relatively easier to crack down on, Woodward says. If the OBN gets a tip on a suspicious operation, runs the address, and no active license is registered, they can immediately go to a judge and get a warrant and file cultivation, he says.
However, nine out of ten times, this is not the case, and the situations are much more complex.
To apply for a license in Oklahoma, 75% of the ownership must be owned by someone who has lived in the state for a minimum of two years; however, these illicit companies are finding a way around that through hiring "ghost owners," he says.
"They’re working with local attorneys and others who can pop up fraudulent paperwork to find somebody who will agree to be the quote-unquote ‘owner,’" he says. "They’re having these ghost owners put their names on sometimes over a hundred licenses. When in reality, they know nothing about the farm, other than they go to the mailbox once a month for a $5,000 check."
"So that fraudulent business structure is set up, so they get their license, and they cross every ‘T’ and every ‘I’ so that they don’t draw attention to themselves," he adds. "But a hundred percent of their product is being moved off the farm in box trucks in the middle of the night to the East coast and the money is laundered all over the U.S. and outside of the U.S."
Woodward says these situations involve a thorough investigation to "peel back" all the layers of fraudulent ownership to discover who is moving the workers and plants and who is laundering and wiring the money all over the world.
"Through our criminal investigation and through working with federal partners, we’re tracing their product all over the U.S., and one hundred