Tokelahoma’s Cautionary Tale: How Weed Legalization Went Wrong in a Deep Red State
Caroline MolloyAaron The Grower once believed in a land called Tokelahoma.
In November 2019, Aaron Scheiner and his wife, Shannon, bought a 12-acre slab of rocky, barren land roughly 60 miles southwest of Oklahoma City and eventually moved 1,600 miles east from California in order to start a cannabis farm.
Land and energy were far cheaper than in California. They paid just $30,000 for their property. The cost to obtain a license to legally grow weed was $3,000 — a pittance compared to most other states — and there were no limits on the number of licenses available.
Aaron constructed a modest cultivation facility — only large enough to grow 130 to 150 plants at any given time — and Shannon handled the business side of the operation, which they dubbed ATG Acres. By the end of 2022, they were selling as much flower as they could produce to more than a dozen dispensaries and turning a modest profit.
“I felt like we had somehow slipped into this perfect utopia,” Aaron recalled.
That was once a common sentiment among weed enthusiasts as the staunchly conservative state was transformed into the world’s wildest weed market in the two years after voters backed medical marijuana legalization in 2019. The freewheeling market that exploded — with no limits on the number of businesses, few regulatory requirements and lax rules that allowed pretty much anyone to enroll in the “medical” program — attracted cannabis entrepreneurs from around the country. At its peak near the end of 2021, there were nearly 14,000 licensed weed businesses in Oklahoma, far more than any other state in the country, including California.
But the state’s uniquely free market approach to weed legalization quickly manifested numerous problems. The entrepreneurs flooding into the state included many criminal enterprises — including hundreds with ties to Chinese organized crime — that used the wild west market as camouflage to operate drug smuggling operations. The proliferation of criminal activity in Oklahoma was an extreme example of a phenomenon seen in other states (such as California, Maine and Oregon) where marijuana legalization has served as a cover for rogue operators serving the still-booming illicit market. The woes became so widespread that Oklahoma became a notorious cautionary tale for other states — particularly conservative ones like Mississippi, Kentucky and Texas — considering establishing legal weed markets.
By 2023, Aaron’s Tokelahoma utopia had become a nightmare in the eyes of many residents. In March of that year, voters overwhelmingly rejected recreational legalization. Every single county in the state — even the relatively liberal strongholds of Tulsa and Oklahoma City — voted against the ballot question. It marked a rare setback for the marijuana legalization movement that has spread rapidly across the country over the last decade, with more than half of Americans now living in a state where anyone at least 21 years old can legally possess and purchase the drug.
The resounding defeat was widely seen as a repudiation of the state’s weed market and emboldened government officials to crack down on the freewheeling industry. In the ensuing months after the referendum, the business hurdles began to mount for ATG Acres and thousands of other medical marijuana businesses. Annual licensing fees increased from $3,000 to $5,000. The state started requiring cultivators to carry a $50,000 surety bond (at a cost of roughly $2,500) to cover any potential damage to the land. ATG Acres spent $15,000 on renovations — a security system, fire alarms, automatically locking doors — needed to get approved for a Certificate of Occupancy, a requirement that had long been on the books but never enforced before 2023. And it had become nearly impossible, the Scheiners found, to navigate the bureaucratic challenges without hiring a lawyer to help with the process.
