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Medical marijuana fees generate millions, but agency can’t touch it yet

The Journal Record

October 1, 2018

OKLAHOMA CITY – Oklahoma’s medical marijuana licensing fees have generated more than *$4 million so far, including business and patient license fees.

Because there is an $80 discount to Medicaid patients, Oklahoma State Department of Health officials couldn’t immediately nail down an exact number for how much money patient license fees have raised, said agency spokesman Tony Sellars.

That revenue would more than cover the amount of money that agency officials siphoned from a bailout fund to establish the program. However, those officials, as well as some in the state’s finance department, decided that the money should go into a fund that can’t be spent immediately. State Question 788 specified what the state government must do with the sales tax revenue that marijuana generates, but it doesn’t address the money that fees generate.

Revenue from licensing will go into an existing public health fund, said Shelley Zumwalt, the spokeswoman for the Office of Management and Enterprise Services. It’s called the Public Health Special Fund and holds money for the Health Department’s general operations.*

Although SQ 788 was placed on the ballot during the legislative session, lawmakers allotted no money to the state Department of Health to establish the program in case of passage.

Read more about State Question 788.

Officials spent about $4 million to set up the program. About $1 million was spent on information technology to host the application process, Interim Commissioner Tom Bates said during a legislative hearing in August. The department spent $2.6 million to hire personnel and some temporary workers to expedite the regulatory process and meet the deadlines in SQ 788. Bates said at the time he anticipated printing licenses would cost $100,000, as would establishing a call center for resident assistance. Bates said it was likely the agency would pay about $400,000 for vendor materials and marketing.

Department officials had to pull the money from somewhere without damaging other services. The Department of Health spent months in a massive financial scandal under previous commissioners. Under Commissioner Terry Cline’s administration, Deputy Commissioner Julie Cox-Kain and her staff hid tens of millions of dollars in a falsely named account to prevent lawmakers from raiding the agency’s revolving fund, investigators found this year.

Before that investigation was completed, that staff was ousted, and a new one came in. New executives believed that money was really missing instead of hiding. They requested a $30 million bailout that was later found unnecessary. The agency still has that money and has been using it to pay for the medical marijuana program’s setup.

Editor’s note: This story was updated at 9:59 a.m. Oct. 2 to correct the revenue figures and to address in error in what authority the Oklahoma State Department of Health has to spend it.

 

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