‘Tokelahoma’ at the Crossroads

8 months ago 7

Alex Knight collects buds as they exit the batch trimmer in Baker Farm, Wellston, Okla. | Photos by Charlie Neuenschwander for POLITICO

MUSKOGEE, Okla. — Johnny Teehee was sworn in as police chief of Muskogee in the summer of 2018, barely three weeks after the state passed a referendum legalizing medical marijuana. Nearly five years later, as he patrols the city, he is overwhelmed by the transformation weed has wrought on this struggling eastern Oklahoma town.

A block away from the First Baptist Church of Muskogee, where Teehee is a parishioner, is a marijuana grow operation occupying what used to be the central post office. A plot of land Teehee bought with the intention of one day building a house on it now sits next to a 10-acre weed farm. Dispensaries are everywhere — The Treehouse, Big Pappa’s, Blaze-n-Bake, Natural Grass, Johnny D’s. At 420 Main St. in downtown Muskogee is a weed shop emblazoned with a giant mural featuring the likenesses of Merle Haggard and Bob Marley. “We do smoke marijuana in Muskogee,” it proclaims, cheekily refuting the opening line of Haggard’s 1969 redneck anthem “Okie from Muskogee.”

Altogether, there are 47 licensed medical dispensaries and 78 grow operations in this city of 37,000 residents, where one in four people live in poverty and the median household income barely tops $40,000. Marijuana businesses have become so pervasive, the police chief says, that they don’t have the manpower or financial resources to investigate whether they’re operating legally

“It’s an absolute nightmare,” Teehee said, during an interview in his office on a recent Saturday afternoon, noting that he’s been a police officer for nearly four decades. “It’s a different world today, without a doubt.”

The issue is personal for Teehee: Both his parents struggled with addiction, and he ended up being raised by his grandparents. “I’ve seen it; I know what it is,” he said. “I know that marijuana does nothing but lead to other drugs.”

Teehee is now working to defeat a March 7 referendum that would open marijuana sales to anyone at least 21 years old. He feels that many of the fears that he and other law enforcement officers expressed about medical marijuana legalization back in 2018, when the original referendum passed, have been vindicated by Oklahoma’s experience. A staunch Republican (Teehee finished third in a 14-candidate GOP primary last year for an open congressional seat), he isn’t particularly optimistic, however, that his fellow Oklahomans will vote down the recreational weed ballot measure.

“I like to stand on my Christian beliefs and being in the Bible Belt. But there’s just been so many votes in the last several years that’s gone opposite of that,” said Teehee.

No state in the country has been as radically transformed by marijuana legalization as Oklahoma. Long notorious for locking up a higher share of its citizens than any other state — tens of thousands of them for non-violent drug offenses — over the past five years, Oklahoma has become a free-market weed utopia. Or, as some might say: a dystopian lesson in supply and demand.

There are now roughly 12,000 licensed medical marijuana businesses in the state, including more than 7,000 grow operations and nearly 3,000 dispensaries. That includes nearly three times as many dispensaries as there are in California — which has roughly 10 times the population. The main reason for this explosion of entrepreneurial activity: There were initially no limits on how many licenses can be issued, and they cost just $2,500 to procure.

Nearly 400,000 Oklahomans are enrolled in the medical marijuana program, roughly 10 percent of the state’s population, by far the highest level of participation on a per capita basis in the country. There are no qualifying conditions for the medical program, so pretty much anyone who wants a card can get one. More than $3 billion worth of weed has been sold since Oklahoma’s program launched in late 2018, after voters backed a medical marijuana legalization referendum.

But the country’s wildest weed market has also sparked a backlash in the staunchly conservative state, especially in rural areas that have been inundated with marijuana farms. That’s been exacerbated by dozens of raids over the last two years on illegal grow operations, many of them run by Chinese nationals, with much of the product being funneled into the illicit market beyond the state’s borders. More than 800 grow operations with ties to organized crime have been shut down during the crackdown, according to the Oklahoma Bureau of Narcotics and Dangerous Drugs. Narcotics agents have seized more than 600,000 pounds of illegal weed and made nearly 200 arrests. Then, last November, police in a rural town an hour and a half northwest of the capital arrived at a pot farm where four Chinese nationals had been shot dead. The killings quadrupled the county’s annual homicide count for the past two years and instantly provided a talking point for statewide critics of the notion that further legalizing weed could ever establish a safe, taxed and regulated market.

Further clouding the prospects for the referendum is the timing. It will take place in a special election in early March — not a usual month for a statewide vote — with nothing else on the ballot. That means it’s pretty much impossible to predict who will show up at the polls.

“It’s all about turnout,” said Steve Thompson, vice president of public policy at the Oklahoma Farm Bureau, which is helping lead the campaign opposing legalization referendum. “I think it’s a complete wildcard.”

Legalization supporters tout the economic benefits that adult-use sales will create, particularly the potential tax revenues from Texans coming across the border to buy legal weed. The recreational market would generate $434 million in tax revenues during the first five years of operations on sales of $1.8 billion, according to an economic analysis commissioned by the Yes On 820 campaign. In the first year of adult-use sales, it’s estimated that out-of-state shoppers would spend roughly $200 million on cannabis products.

They also point out that the referendum would allow people with marijuana convictions to have their records expunged, as well as enable people currently serving time for such crimes to petition to have their sentences reduced or scrapped.

“We’ll take Texas tax dollars to help fund our schools,” said Michelle Tilley, the campaign director for Yes On 820, in an interview at the campaign headquarters in Oklahoma City. “That’s amazing.”

Legalization advocates argue that Oklahomans views on marijuana use have changed dramatically in the nearly five years since the medical marijuana referendum passed by a margin of 57 to 43 percent and dispensaries started popping up in seemingly every strip mall.

“They know people now who have medical marijuana cards, or they have them themselves,” Tilley said. “They’re realizing it’s not the big, bad, scary monster that they’ve been told it was.”

But opponents of the legalization referendum think the experiences of the last five years will push voters in the opposite direction. If the state’s medical market has proven to be wildly out of control, they argue, opening it up to recreational sales will only exacerbate the problems. They further point out that efforts to clean up the medical market by state lawmakers and regulators — including hiring more enforcement personnel and imposing a two-year moratorium on issuing new licenses — are still in their early stages.

“Expanding the marijuana marketplace in Oklahoma, whether it’s to our neighbors across the Red River or not, would only be furthering a problem,” Thompson said. “Let’s focus on fixing the problems rather than pouring gas on the fire.”

If Oklahomans do reject the legalization referendum, it would be one of the clearest signs yet of a fledgling national backlash against marijuana legalization. The movement has spread rapidly across the country since voters in Washington and Colorado backed recreational sales in 2012, with 37 states now having medical markets and 21 allowing anyone at least 21 years old to legally possess weed. But last November, adult-use referendums failed in three states — Arkansas, North Dakota and South Dakota — marking a rare setback for the legalization movement.

“There’s a cultural war going on between those who want to turn America into what they imagine to be the good old days, versus those who want a more progressive country,” said Lawrence Pasternack, a legalization advocate and Oklahoma State University philosophy professor who has written extensively about the state’s medical marijuana experiment. “This is a litmus test [for] what direction the state and what direction the country is aiming towards.”

‘Everyone’s broke and everyone’s starving’

When I first came out to Oklahoma in October 2020 to report on the state that virtually overnight had earned the nickname “Tokelahoma,” there was a palpable excitement among legalization advocates and cannabis entrepreneurs. They were proud of the free-market system Oklahoma had established, a stark contrast to most states where there are strict limits on licenses. I repeatedly heard optimistic talk that Oklahoma — with its cheap land and electricity, and heartland location — could become the epicenter of the country’s burgeoning cannabis industry. That is, if federal restrictions on the drug were ever relaxed and interstate commerce permitted, neither of which has happened.

A year later when I returned, the mood had darkened. The number of licensed cannabis businesses was still growing — ultimately hitting a peak of nearly 14,000 in December 2021 — even though it had become abundantly clear that the market couldn’t support anywhere near that many businesses. Police were raiding illegal grows on a seemingly weekly basis, and people complained bitterly about retailers selling products outside legal channels. The constant refrain: There needed to be clearer legal guardrails around the industry and more stringent enforcement.

In some ways, the situation has improved heading up to the March 7 referendum. Oklahoma Medical Marijuana Authority Executive Director Adria Berry — who was appointed to the post in August 2021 — earns high praise from most lawmakers and industry officials for beefing up enforcement and implementing a seed-to-sale tracking system to make it harder to divert products into the illicit market.

A two-year moratorium on new licenses took effect last August, but roughly 2,600 new license applications were received by state regulators beforehand. It has only added to the long string of failed or marginally successful businesses.

“They often hire like their brother-in-law, their fraternity brother, all of their alcoholic friends that need a new start in life,” said Chip Baker, who has been growing weed — legally and otherwise — for decades and moved to Oklahoma from Colorado shortly after voters passed the legalization referendum in 2018. “But they’re not the best people to hire to run your business, and it really becomes this ‘Bad News Bears’ type of scenario.”

But in many other instances, entrepreneurs are struggling to run viable businesses simply because there’s too much competition and prices are too cheap. That’s why they say, somewhat counterintuitively, it’s crucial to pass the recreational legalization referendum. More customers, they say, would boost demand; higher prices and profits would naturally follow. It would also allow the state’s ramped up enforcement efforts time to take effect, they argue, and push some of the quasi-legal and financially shaky operators out of the market.

Blake Cantrell sold off his previous business venture, a meal-delivery service, just as Oklahoma’s medical marijuana market was launching in 2018. At the time, it seemed like a fortuitous development as he searched for the next entrepreneurial opportunity.

“I have the risk tolerance for what this space is, at least I initially thought, and I knew that other players wouldn’t until there’s federal legalization movement,” Cantrell recalled thinking.

He is now CEO of the Peak Dispensary, which has three retail outlets in Oklahoma City and Edmond. But the glut of weed in the market, Cantrell says, has led to freefalling prices and a surge in illegal activity.

In his eyes, two things need to happen in order to create a viable market for cannabis entrepreneurs: Enforcement needs to continue to ramp up, particularly on the retail side, and the recreational legalization referendum needs to pass. Peak is selling joints to support the Yes on 820, with $1 of each purchase going toward that effort.

“We can’t compete with illegality, which is rampant in the market,” said Cantrell during a recent interview at one of Peak’s Oklahoma City locations. “We’re white knuckling it until there’s meaningful enforcement.”

Travis Smith, co-founder of Oklahoma City grow Smokey Okie’s, said he’s seen a ramp up in enforcement activities, but that it’s still only targeting businesses that are operating in plain sight.

“We got inspected three times last summer, but we’re right here in the middle of the city,” Smith said. “It’s time for them to hit some gravel roads and go out to where the real crime is.”

But he believes passage of the recreational legalization referendum is the single most important change that could bolster the market and provide an economic lifeline to businesses.

“Everyone’s broke and everyone’s starving,” Smith said. “This industry is literally crumbling as we speak.”

But not all legalization advocates and cannabis industry officials are behind the legalization campaign. Some favored efforts to enshrine legalization in the state constitution, but a pair of petitions in support of that failed to collect enough signatures to make the ballot. The schism among pro-marijuana forces in the state that could dampen turnout on March 7.

I met Tom Spanier back in 2020 at the Oklahoma City dispensary that he operates with his wife Tracy, Tegridy Market (yes, inspired by “South Park”). At the time, he was thrilled with Oklahoma’s free market approach to weed. But the illegal activity has convinced him that there needs to be more stringent enforcement.

Even so, he’s only lukewarm on further legalization. He worries about what lawmakers will do if it passes, particularly the prospect of adding potency caps or establishing market regulations that will drive out mom-and-pop retailers like Tegridy.

“We think we’re sustainable. We don’t have any partners. We don’t owe anybody any money,” Spanier said. “We think we’re going to come out on the other side in a good position, whether rec passes or not.”

‘Bang, bang, bang, bang’

Perhaps no single event over the last five years has created more damaging perceptions about marijuana legalization in Oklahoma than what transpired down a red dirt road in rural Kingfisher County on Nov. 20, 2022.

Shortly before 7:30 p.m., a 911 call came in reporting a hostage situation at a roughly 10-acre licensed marijuana farm just north of Lacey.

When Kingfisher County Sheriff’s Deputy David Roller arrived on the scene about 30 minutes later, an Asian man started banging on his passenger side window, according to the officer’s incident report. After Roller rolled down the window, the man — who spoke little English — made his hands into a pistol shape and said, “Bang, bang, bang, bang.”

Using an app to translate, Roller was able to ascertain that five people had been shot at the farm, but he didn’t know where the shooter was or whether he was alive.

A short time later, Deputy Jonathan Riedlinger discovered another Asian man lying on the back seat of a black F-150 pickup truck covered in blood. That man was eventually taken by helicopter 80 miles to a hospital in Oklahoma City.

Officers then entered a garage on the property and discovered a grisly scene. Deputy Riedlinger called out the body count as he made his way through the garage: three dead men and one woman, each shot multiple times. Three other men were discovered that night hiding from the shooter. The next morning, a fourth man was found hiding in one of the dozens of marijuana hoop houses on the property. All were Chinese nationals.

Three days after the initial 911 call, and more than 1,500 miles from the crime scene, Miami Beach police pulled over a vehicle after it was flagged by a license plate reader and detained 45-year-old Chen Wu. He was charged with four counts of first-degree murder and one count of assault and battery with a deadly weapon and is awaiting trial. Prior to the shootings, Wu had allegedly demanded the return of $300,000 that he had invested in the weed farm, according to court records. (Wu’s attorney did not return a call seeking comment for this story.)

Three months after the quadruple homicide, the property in Kingfisher County still contains the rudiments of a marijuana grow. Dozens of hoop houses are situated on the southwest corner of the property. Wooden pallets and pieces of tubing litter the grounds. The front door of a brick house near the entrance to the property sits ajar. But nobody surfaced as I cautiously inspected the property along with Republican state Rep. Mike Dobrinski and a photographer.

I had reached out to Dobrinski, who represents the area, to get his take on the referendum and the potential impact of the killings on voter sentiment. He offered to take me to the scene of the grisly crime. Dobrinski told me he wasn’t entirely surprised when he learned about the executions. He’d been hearing concerns about unfamiliar individuals associated with marijuana farms, often carrying firearms, from residents in the sprawling district since he’d launched his first political campaign in 2020.

“All at once we look up and they are everywhere,” Dobrinski recalled. “It happened relatively quickly and kind of blew up before we knew what was going on.”

Dobrinski didn’t support the 2018 medical legalization referendum and was surprised when it passed by a double-digit margin. But his beliefs about marijuana legalization have evolved in the ensuing years as he’s seen so many of his neighbors get involved in the program as patients or business owners. Dobrinski says he now supports a medical program if it’s truly limited to people who are using the drug for therapeutic purposes and medical professionals are involved.

“If it can give you some pain relief, if your doctor hadn’t been able to give you anything that worked and this worked for you, why not let you have that?” he reasoned. “And if that’s the true essence and the extent of it, nobody would have a problem with it.”

But Dobrinski thinks legalizing recreational sales would be a big mistake, especially given the spate of criminal operations tied to the medical market that have surfaced in the state over the last five years. He has supported efforts at the Legislature to put tougher guardrails around the current medical program, including the two-year moratorium on new business licenses that took effect last August, and wants to see how those adjustments play out before considering additional changes.

“I’ve moved a long way on this deal in a couple of years. I would think that a lot of people have,” Dobrinski said. “I know what my preference is, but I won’t be shocked if it passes.”

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