Jason Elsasser, a Miami native turned leading cannabis cultivator in California, is looking to bring his success back to his home state following the passage of State Question 788, but says there are many issues that need to be addressed in Oklahoma's medical marijuana legalization process.

(Editors note: This article is part of an ongoing series of informative articles regarding medical marijuana legalization in Oklahoma.)

MIAMI – The rush to capitalize on Oklahoma’s recent passage of State Question 788 on the legalization of medical marijuana has brought a California legal cannabis grower and industry leader back home.

Miami native Jason Elsasser, Founder/CEO of CV Farms and Founder/President of the Coachella Valley Cannabis Alliance Network, of Desert Hot Springs, California, spent time in Miami a week ago looking at opportunities to develop here in Oklahoma in the cannabis industry.

After Elsasser’s success in the marijuana industry in California, he wants to bring his expertise and knowledge of cannabis cultivation, processing, and distribution to his hometown.

“I want to win Miami over. I want them to say if we’re going to have to have this, we want you to be involved because we trust you,” Elsasser said. “I am looking at a lot of options and meeting with people I have known for many years, Oklahoma residents I think I’m going to team up with, and turning in multiple applications across the state.”

The most recent draft of regulations set forth by the Oklahoma Medical Marijuana Authority (OMMA) for Oklahoma growers, processors, dispensaries and transporters includes certain requirements for a commercial license. All applicants must register with the Oklahoma Bureau of Narcotics by category before commencing business and must be 25 or older, an Oklahoma resident, and all entities must be held by 75 percent ownership by Oklahoma residents. All medical marijuana sold in Oklahoma must be grown in Oklahoma.

License applicant requirements also include no nonviolent felony convictions in the last two years and any other felony convictions in the last five years. Dispensaries may not be located within 1,000 feet of the entrance to any public or private school. Licenses are issued for one year and may be renewed annually. Once submitted OMMA will review the application and reply with denial or approval within 14 days of submission.

Going green

Elsasser turned to the cultivation of medical marijuana after a successful real estate career ended due to the market’s collapse in California. Elsasser has been in the medical marijuana industry since 2007 after meeting a cultivator who encouraged Elsasser to look at growing cannabis legally.

“I was going broke, the market had crashed. I went from doing very, very well to just crashing, and it was scary to me,” Elsasser said. “I hired an attorney and the attorney said, ‘Yeah, you can do it legally and here’s how you do it.’ It was what they called the ‘Gray Market,’ it was legal but there was no regulation. I operated in that realm up until 2014 when the local community where I lived allowed local licensing. I was actually one of the first people to get a license in the entire state.”

Elsasser’s growing operation grew and pulled him from financial ruin. At one time he ran one of the larger operations in the state.”

Now corporate cultivators, capable of producing marijuana more economically have begun taking over the industry in California, according to Elsasser. California legalized medical marijuana in 1994 and recreational marijuana followed in November of 2016. The state implemented rules and regulations in January of 2018.

Seeing the medical usefulness of marijuana in the success of a friend fighting terminal cancer solidified Elsasser’s commitment to the industry.

“It was a divine moment when I knew that what I was doing was not just a business venture,” he said.

Legalization

Elsasser said the issue of legalization has been handled differently and uniquely from state to state.

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Marijuana legalization in the U.S.
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“Right now the cannabis industry in California is ran by very large corporations," Elsasser said. “We’re going to make sure it doesn’t happen here. That’s what I would like to see because the way 788 was written is the exact opposite. There were almost no regulations, and of course, you can’t have a medical cannabis program without some regulations and so there’s going to be some concessions on both sides.”

Elsasser said there are many issues that need to be addressed in the legalization of medical marijuana. He is a proponent of certain regulation, but as in most other industries as an owner does not want unnecessary overregulation implemented.

“First of all there are no testing requirements in 788 and you can’t have a medical marijuana program without testing because if you’re a cancer patient or a sick person that’s using cannabis for medical reasons, you have to know that what you’re putting in your body is free of any type of pesticides, any type of heavy metals, any type of mold. They need to focus on rules and regulations that make sense, and draft regulations around testing, around packaging,” he said.

Elsasser said he was working with the authors of SQ788 to offer his support and advice.

“I was completely blown away that 788 passed, and the reason that I was blown away was because the opposition had raised a little over $1 million to fight it and the proponents had raised just a little less than $50,000,” he said. “The other interesting thing about 788 is all these other state programs were brought through at a legislative level, meaning the state legislators brought forward bills to push this through and it was probably prompted by special interest of some type. 788 is the opposite. 788 was put together by a bunch of activists. I think Oklahoma’s program is going to be unique from any other program in the United States. Being outraised 20 to one I didn’t think it was going to pass and then when it did pass and I read it, and gave it to my attorney to read it, my wife said you need to go to Oklahoma.”

California adopted and combined regulation on both medical and recreational marijuana through approval of California State Proposition 64. Elsasser and other cultivators are now looking at opportunities in other states.

“When that passed, they reconverted it to the Medical and Adult Cannabis Use Regulation and Safety Act, so now it’s all combined,” Elsasser said. “It created a lot of bureaucracy; the Bureau of Cannabis Control (BCC) governed by the Department of Consumer Affairs. The BCC regulates and licenses all the retail dispensaries, all the distribution centers, and all the testing facilities.”

In Oklahoma, regulation and licensure fall under the Oklahoma State Health Department and OMMA.

“I don’t think they will follow California here, I think they will be in line with Ohio, Pennsylvania Texas and New Jersey,” Elsasser said.

Regulation will help push out the black market as well, Elsasser believes.

“Marijuana is four times as expensive in Oklahoma on the street as it is in California,” he said.

Opportunity to grow

In California, growers pay 15 percent excise tax that combined with local and sales taxes for close to 40 percent in total taxes paid. Oklahoma growers will pay only 7 percent excise tax. Like many industry cultivators, Elsasser sees great business opportunity’s available in Oklahoma.

“I like it to the point that we’re willing to go their way quite a bit. Let’s get testing requirements in, let’s put some type of inventory control system in place, packaging requirements to make sure there’s no packaging enticing to children. There’s lots of possibilities here,” Elsasser said. “I’m looking at property in strategic places all over the state. I want to vertically integrate. I want to have several dispensaries, I want to have a large cultivation facility and manufacturing facility, and licensed transport.”

Manufacturing facilities would produce edibles, vape pens, topicals, oils, tinctures and more packaged and branded products to be transported to retail shops.

“So it’s all one closed operation,” Elsasser said. “I have to have several Oklahoma partners because I can only own 25 percent of each license.”

Elsasser said he is in communication with locals interested in research and other business opportunities. He wants to change how opponents see the cannabis industry in Oklahoma.

“I came out here with low expectations but things are really starting to take shape. What I want to do right here in Miami, Oklahoma would create probably 50 jobs, well paying, skilled labor jobs,” he said.

Growing green

Elsasser gave an overview of how cannabis is grown in three different types of cultivation methods, advanced indoor cultivation, greenhouse growing, and outdoor growing. Advanced indoor cultivation takes place in a warehouse with 100 percent control over the environment, temperature, humidity, CO2.

“Indoor cultivation is the most expensive. It’s the most expensive to build, to operate because it’s all artificial lighting, but it produces the highest content of THC, and the absolute highest quality cannabis,” he said.

With greenhouse growing technological advances can now produce higher quality marijuana.

“You can produce unbelievable cannabis in a greenhouse environment. That is a much less expensive model because your costs are much less because you’re taking advantage of the natural light,” Elsasser said.

Elsasser compared outdoor cultivation to growing a corn crop.

“In California most is grown in greenhouses, but there’s an oversupply because there’s just too many growers,” he said. “Here’s what’s going to be interesting in Oklahoma, you could theoretically supply the whole state market with 20 grows.”

Marketplace competition will come down to the quality and price of the product, according to Elsasser.

“Quality and high yield are key to success in a competitive cannabis industry. It’s like a race to the top. California’s a race to the bottom, Oklahoma’s a race to the top,” he said. “They’re going to be looking for the quality.”

Elsasser has built respect in his California community even among opponents of the issue by being upfront and becoming a community partner, and supporter. He says he has worked with city officials, law enforcement to ensure the industry is respectfully and professionally operated.

“I just come out and say, ‘I grow pot. I’m a pot grower and I don’t want to hide anymore.’ I joined the Rotary Club, and they respected me for the honesty, and that’s what I’m going to do here,” he said. “To open a dispensary you have to grow the cannabis first, so the growers will open first. I know the science, and I can produce three times what the normal grower can produce and higher quality because I’ve had to compete."

Ideally, Elsasser would like to establish a 22,000 square feet greenhouse, manufacturing facility, and a couple dispensaries for each license.

“Maybe one down by Grand Lake, maybe get one in Miami, one closer to Tulsa. It has the opportunity to be small business friendly as well. I can tell you if I open a dispensary in Miami, it’s going to be a beautiful location, hardwood floors, you’re going to have massage treatments, classes for senior citizens, educational programs, it will be gorgeous.”

Oklahoma opportunity

In Oklahoma, applications for medical marijuana cultivation are now being accepted.

“Applications are $2,500 in California it would cost you $25,000. In California a growing operation would cost $3 or $4 million, in Oklahoma I think I can get it done for under $1 million, and the profitability is higher,” Elsasser said. “It’s just amazing to see the state of Oklahoma take shape and embrace this industry. I think that it’s going to be a good opportunity to establish additional economic development as well as workforce development. This will create jobs, and skilled labor jobs such as associate cultivation technicians, cultivation managers, master growers, marketing specialists, human resources people, accountants, attorneys, engineers, plumbers, concrete work, it will encompass so much economic workforce development.”

More information on current rules and the application process can be found on the Oklahoma Medical Marijuana Authority website at OMMA.OK.gov.

Melinda Stotts is the associate editor of the Miami News-Record. She can be emailed at mstotts@miaminewsrecord.com or followed on Twitter @MelindaStotts1.