Is Texas missing out? A deep dive into Oklahoma's booming marijuana market

HOUSTON, Texas (KTRK) -- While you can still get arrested for possessing pot in Texas, cross the Red River, and it's like entering another world, at least when it comes to medical marijuana.

"I literally had no experience growing anything at all," said Ellie McDaniel, who ran a laundromat until 2018. "I had no idea what I was doing."

That all changed four years ago, when Oklahoma voters passed State Question 788, which legalized medical marijuana with very few limits. McDaniel's cousin Travis Smith remembers that moment.

"I was an attorney. She had a laundromat and we started talking about, could we pull off a business if this thing passes?" recalled Smith. "When it passed in June, the next week we were in Colorado consulting, talking to consultants, talking to grow operations."

The cousins quickly launched Smokey Okie's, a wholesale grow operation. They built out a warehouse in the small town of Spencer, just outside of Oklahoma City. In the early days, the cousins were learning however they could.

"I had a lot of failures," admitted the company's now head grower. "I mean, we didn't come out of this doing fantastic. You know, we came out of this like stumbling through, you know, and learned from every mistake that we made."

"At least it was at the beginning when we weren't making money anyway. So, it didn't really matter."

The business now has brought on several family members as well as around two dozen full-time employees.

Smokey Okie's had plenty of company. Seemingly overnight, a new land rush was on in Oklahoma.

"As soon as I knew it was going to pass, for sure. I was on the first flight, you know, that, that's how it all started," said Josh Camden, who watched the Oklahoma business from California.

As soon as it passed, he moved his entire family to Edmond, a suburb of Oklahoma City. He now runs a grow operation on a few acres of rural land, in addition to owning several dispensaries under the Emerald Fire brand.

"It was shocking to see how fast this little team state changed. You know, it's like, there was no traffic when I got here," Camden said with a chuckle. "You go out to dinner at time and get right in. Not anymore. Oklahoma's booming. It's shocking."

Mike Girocco also moved from the West Coast. The 62-year-old now runs Releaf Laboratories, which provides just about anything containing THC that's not a raw, dried flower.

"This is kind of, if we're Coca-Cola this is our sugar cane," said Girocco as he scooped up a handful of dried flowers. "What we do is we process it into various products. So, we don't do beverages, but we do, you know, vape cartridges. We do gummies, we do dabs, we do concentrates."

"My father was an opioid addict for 20 years and was never able to kick it," said Girocco, his voice trailing off as he recalls what brought him to Oklahoma.

That pursuit led him to building a $2 million processing facility. But making a profit isn't easy.

"It's crazy. It's like having a tiger by the tail every day. So that's the only thing. So, it, you know, working 24-7, 365 is, is tiring," admits Girocco, who has had to slash wholesale prices because there is so much competition.

"Oklahoma is the cheapest place to get started," said Adria Berry, the Executive Director of the Oklahoma Medical Marijuana Authority (OMMA), the agency that regulates all things cannabis. "We have a $2,500 license fee."

Because Oklahoma has such a low price for entry into the business and no limits on the number of licenses it hands out, the profit margin for those already in business is really squeezed. It's among many growing pains the industry is seeing.

"It was, so it was such an explosive growth in such a short period of time that we, we basically left this open invitation to across the United States, or the world, to basically come to Oklahoma," said Berry. "You know, it's pretty cheap to get a license here. It's pretty cheap to own land here. Uh, and they felt for a while that no one was watching, and that's kind of true."

Enforcement against illegal growers as well as those who seek to transport marijuana across state lines are increasing, but has not caught up with the exponential growth.

Currently, there are more than 8,000 growers, 2,300 dispensaries, 100 processers and about 150 other cannabis-related businesses licensed in Oklahoma.

Around 400,000 Oklahoma residents, approximately 1 in 10, have medical patient cards. You can see the full data in statistics kept by OMMA.

"Yeah, we have a very big oversaturation problem," mused State Representative Scott Fetgatter, a Republican lawmaker dubbed 'The Godfather of Marijuana.'

"You know, I was opposed to the legalization of marijuana, like adamantly opposed," said the lawmaker, in between floor votes at the Oklahoma State Capital.

However, after State Question 788 passed, Fetgatter has led the way in passing various marijuana-related legislation in order to manage the burgeoning industry.

"My job is not to necessarily always inject my personal feelings into my job. Sometimes my job is to listen to what my constituents want as well," said the lawmaker about his change in perspective. "I would say Republicans enjoy marijuana and use it for medicinal purposes as much as Democrats do, or, you know, at least in Oklahoma."

Since legalization, OMMA has collected $90 million in tax revenue with more than $67 million going to the state's education fund. Whether that's a huge windfall for supporters of public education or just a drop in the bucket is up for some debate.

However, Blake Cantrell, a lawyer turned CEO of Peak Dispensaries, says his home state is clearly benefiting. "No question it's a missed opportunity for Texas. It's certainly not too late, but I mean, it's somewhere in the mid-thirties percentage of states who have a meaningful program in some regard. Texas is too big a state to be in the minority in that."

Cantrell, who briefly lived in Dallas before moving back to Oklahoma to fully embrace the medical marijuana industry, now leads a trade organization on the issue. He and others have learned that being fully involved in the political process is integral to make sure the industry survives.

"I should have expected it, but essentially every year since we passed, it, there's anywhere from 20 to, no exaggeration, 60 bills working through the House or the Senate, both which impact the industry, in many cases, a negative way," said Cantrell.

"It's become increasingly a larger part of my role as CEO is to make sure or that, you know, the industry's voice is being heard and there is common sense legislation is being enacted so that we don't just end up having to deal with whatever's decided without any industry input."

When you hear Cantrell talk, he could be talking about any major tax-generating industry in the state. Clearly in Oklahoma, the business has moved far beyond a backyard grower. Billions of dollars and thousands of livelihoods are at stake.

"Cannabis is not controversial in Oklahoma," Travis Smith, the Smokey Okie's owner, is quick to point out. "It is a new sector. We're a job creator. We employ lots of people. I mean, we have health insurance for our employees. We have 401K options. We are a real company."

And what these real companies are pushing for is full legalization of recreational marijuana to pass in Oklahoma. Currently, you still need an Oklahoma driver's license and a doctor's card to access marijuana. If full recreational use passes, producers hope it would attract significant cannabis tourism from Texas.

"We have 4 million people in this state. I'd love to have access to their 27 million, if they come across the border, and buy our product," said Girocco.

For now, crossing the Red River going south, means no marijuana for anyone.