Question Submitted By Honorable Tom Bates, Interim Commissioner of Health, 090419 OKAG, 2019 OK AG 6

Docket Nº:2019 OK AG 6
Party Name:Question Submitted by: The Honorable Tom Bates, Interim Commissioner of Health, Okla. State Dept. of Health
Case Date:September 04, 2019
Court:Oklahoma Attorney General Opinions

2019 OK AG 6

Question Submitted by: The Honorable Tom Bates, Interim Commissioner of Health, Okla. State Dept. of Health

No. 2019 OK AG 6

Oklahoma Attorney General Opinions

September 4, 2019



¶0 This office has received your request for an official Attorney General Opinion in which you ask, in effect, the following questions: 1 As part of the citizen-approved legalization of medical marijuana in 2018, the Oklahoma Department of Health ("Department") was tasked with issuing licenses for medical marijuana dispensaries. 63 O.S.Supp.2019, § 421. By statute, no such licensee may be located "within one thousand (1, 000) feet of any public or private school entrance." Id. § 425(G). In the 2019 session, the Oklahoma Legislature enacted the Oklahoma Medical Marijuana and Patient Protection Act ("OMMPPA"), which defines "school" to include preschools. 63 O.S.Supp. 2019, § 427.2(58).

1. May the Department lawfully revoke or decline to renew the properly-issued license of a medical marijuana dispensary located within 1, 000 feet of a preschool entrance once the OMMPPA becomes effective?

2. Do principles of equity, namely equitable estoppel, demand that the State renew or refrain from revoking these licenses?



¶1 Through an initiative petition approved by Oklahoma voters in June of 2018, State Question 788 ("SQ 788") established a medical marijuana program in Oklahoma. Codified in Title 63, Sections 420 through 426 of the Oklahoma Statutes, SQ 788 required a new regulatory office under the Oklahoma Department of Health ("Department") to issue patient and business licenses to applicants who met certain criteria. 63 O.S.Supp.2019, § 420(C). SQ 788 also established certain restrictions on medical marijuana dispensaries, including that "[t]he location of any retail marijuana establishment is specifically prohibited within one thousand (1, 000) feet of any public or private school entrance." Id. § 425(G). SQ 788 did not define "public or private school," but Department rules define "private school" and "public school" to mean "elementary, middle, or high school" with no mention of preschools. OAC 310:681-1-4.

¶2 In the most recent legislative session, the Legislature passed the Oklahoma Medical Marijuana and Patient Protection Act, 63 O.S.Supp.2019, §§ 427.1--427.23 (the "OMMPPA"). See 2019 Okla. Sess. Laws ch. 11. The OMMPPA established the Oklahoma Medical Marijuana Authority to handle state operations related to medical marijuana. 63 O.S.Supp.2019, § 427.3. It provided civil and criminal protections for marijuana licensees. See id. § 427.8. And it set up a robust system of rules, investigatory procedures, and administrative hearings. See id. § 427.6. In its definitions section, the OMMPPA defines "school" as" a public or private preschool or a public or private elementary or secondary school used for school classes and instruction," and specifically excludes "homeschool, daycare or child-care facilit[ies.]" Id. § 427.2(58) (emphasis added). 2

¶3 Meanwhile, the Department has been issuing licenses to medical marijuana dispensaries since late August of 2018. It is our understanding that at least some portion of those licenses were issued based on the Department's definition of "public school" and "private school"-- i.e., a definition that does not include preschools--so it is conceivable that a current licensee's location is within 1, 000 feet of the entrance of a public or private preschool. Because marijuana dispensary licenses expire one year from the date of issuance, see OAC 310:681-5-2(a), the first of these licenses are set to expire on September 1, 2019. You have asked what effect the new definition of "school" contained in the OMMPPA has on the license of a dispensary that, when the license was issued, was lawfully located within 1, 000 feet of a preschool entrance.



A. The Nature of Professional Licenses in Oklahoma.

¶4 In Oklahoma, the state's issuance of a business license does not give the license-holder an absolute right to continue in that particular profession, business, or trade forever. 3 In the alcoholic beverage context, the Oklahoma Supreme Court held that "there was no vested property right enjoyed" by the holder of a corporate distribution license because "[n]o one has an absolute or inherent right to a license to sell intoxicating liquor." Brown Distrib. Co. v. Oklahoma Alcoholic Beverage Control Bd., 1979 OK 101, ¶ 4, 597 P.2d 324, 326-27. Therefore, the license "may be extended, limited, or denied without violating any constitutional right." Id. The Court reasoned that business licenses are granted "as a matter of legislative grace" and "[t]he state maintains the inherent power to abolish all liquor traffic within its boundaries if it so chooses, anything less than total prohibition is the result of legislative prerogative." Id.

¶5 The proposition that professional licensing "confers upon the licensee neither contractual nor vested rights" is also well accepted in other states. See, e.g., Rosenblatt v. California State Bd. of Pharmacy, Dep't of Prof'l & Vocational Standards, 158 P.2d 199, 203 (Cal.App. 1945). The Utah Supreme Court made this point in no uncertain terms: [A] license is not a contract, ... it does not in itself create any vested right, or permanent right, and that free latitude is reserved by the legislature to impose new or additional burdens on the licensee, or to alter the license, or to revoke or annul it. And this is the general rule notwithstanding the expenditure of money by the licensee in reliance thereon, and regardless of whether the term for which the license was given has expired.

Riggins v. Dist. Court of Salt Lake Cty., 51 P.2d 645, 658 (Utah 1935); cf. Application of Herrick, 922 P.2d 942, 951 (Haw. 1996). Moreover, Oklahoma recognizes that the law on this is controlling and admits no equitable consideration of investment or reliance. See

Wright v. Oklahoma Alcoholic Beverage Control Bd., 1973 OK 104, ¶ 4, 516 P.2d 245, 247 (denying equitable claim based on the amount of time and money invested in licensee's business).

¶6 Central to a state's sovereignty is the police power "to regulate business and professions in order to protect the public health, morals and welfare." Hansson v. Arizona State Bd. of Dental Examiners, 985 P.2d 551, 554 (Ariz.Ct.App. 1998) (citations omitted); see also Missouri Real Estate Comm'n v. Rayford, 307 S.W.3d 686, 691 (Mo.Ct.App. 2010). "The granting of a license to practice certain professions is the method taken by the State, in the exercise of its police power, to regulate and restrict the activity of the licensee. He takes the same, subject to the right of the State, at any time, for the public good to make further restrictions and regulations." Dantzler v. Callison, 94 S.E.2d 177, 188 (S.C. 1956); see also Wright, 1973 OK 104, ¶¶ 9-10, 516 P.2d at 247. To be sure, "a professional license is a legally protected property interest and the license holder is entitled to due process before its revocation." Cities Serv. Co. v. Gulf Oil Corp., 1999 OK 16, ¶ 7, n.9, 976 P.2d 545, 548 n.9. But, in granting a license, the state "reserves the right to exercise its...

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