For Zachary Bomar, co-owner of Lost Brothers Cannabis Co., the promise of Oklahoma’s cannabis boom was straightforward: opportunity.
After 15 years in the oil field, Bomar entered the industry in 2020 following layoffs, investing his savings alongside his three brothers in what he described as “the next oil boom.”
The brothers entered the industry as cannabis cultivation spread rapidly across Oklahoma.
At first, the expectation seemed justified.
“The vision was make some good money,” he said, noting that early on, “that’s what it seemed like everybody was doing.”
But that reality has shifted sharply.
“The flooding of the market — too many grows, too much product,” Bomar said, pointing to oversupply as the defining factor reshaping the industry. The result has been a steady collapse in wholesale prices, even for high-quality product.
Prices topped $3,000 per pound at first. Now, Bomar sells his product for about $1,100 per pound, which he said is enough to pay the bills.
Unlike many states, Oklahoma initially imposed few limits on licenses, production or qualifying conditions for medical marijuana patients. The result was an economic ecosystem that stretched far beyond growers and dispensaries into real estate, construction, banking, security and local government budgets.
State data showed more than $670 million in retail medical marijuana sales in 2025, along with more than $1.1 billion in reported wholesale transactions within the regulated supply chain, illustrating the scale of Oklahoma’s cannabis economy even as the market contracts. In addition to business activity, the industry generated approximately $47 million in excise taxes and more than $60 million in state and local sales taxes during the 2025 budget year.
However, as the market contracts under falling prices and increased enforcement, the question is no longer simply whether cannabis businesses will survive. It is what happens to the network of jobs, properties and local economies that grew up around them.
That question has taken on new urgency since Gov. Kevin Stitt called this year for shutting down Oklahoma’s medical marijuana industry entirely, arguing the system had become out of control and a threat to public safety. The political shift followed years of criticism over illegal grows, interstate diversion and the rapid expansion of loosely regulated cultivation sites across rural Oklahoma.
For businesses tied directly or indirectly to cannabis, the debate is no longer theoretical. It carries implications for property values, employment, local tax revenue and entire categories of secondary businesses that grew alongside the industry.
Industry participants said uncertainty surrounding future regulation has itself become an economic force, discouraging investment and long-term planning.
The physical footprint
“I know when it first started, we were lacking a lot of warehouses, so that was high, high, high in demand,” said Krystal Deak, a commercial real estate agent with Cummins-Setters Commercial Partners and CEO of Vertical Consulting.
But the downturn has already altered deal flow. Deak worked with both leases and business sales as the industry expanded.
“Leasing was great, selling was great,” she said. But as regulatory changes and market contraction took hold, “it’s just kind of gone downhill.”
As the possibility of ending the state’s experiment with medical cannabis looms, the market for properties now used for cannabis may disappear altogether.
“So if they’re going to shut all these down, there’s going to be a large amount of warehouses that are going to be available,” Deak said.
There already are, said appraiser Darin Dalbom. His firm appraised dozens of cannabis-related properties during the industry’s early expansion.
“There’s lots of sellers,” Dalbom said. “A lot of sellers out there, very few buyers.”
The collapse, he said, has been driven by a combination of oversupply and enforcement. As wholesale prices fell, growers’ margins tightened, and demand for specialized facilities evaporated.
In many cases, owners are abandoning cannabis use altogether, stripping out specialized equipment and reverting buildings to standard industrial space. Many of the facilities were heavily customized for cannabis production, making them difficult and expensive to repurpose for other industries.
Some properties, particularly large-scale rural grow operations, may have little market appeal at all.
As an example, he cited one rural Oklahoma grow facility consisting of 24 purpose-built structures with low ceiling heights and specialized lighting and climate-control equipment.
In a more urban community, such a facility might become home to some other kind of industrial user. But for one 60 miles outside Oklahoma City, the demand just isn’t there.
“This one sits there vacant,” he said.
Supply and demand
At a system level, Oklahoma’s cannabis economy has been defined by a fundamental imbalance between supply and demand.
At the market’s peak, Oklahoma had nearly 14,000 licensed cannabis businesses, including an estimated 9,400 growers, according to state officials and national reporting. The scale of the expansion transformed not only the marijuana industry, but also the businesses that supplied it, from warehouse owners and construction firms to electricians, security contractors and local banks.
A 2023 study prepared for the Oklahoma Medical Marijuana Authority found that the state’s regulated cannabis supply exceeded patient demand by approximately 64 to 1, one of the most extreme mismatches observed in any state market.
Even when accounting for total consumption, including illicit use, the study found Oklahoma’s licensed industry could supply the state’s cannabis demand dozens of times over.
For Oklahoma State University economist Brian Whitacre, that imbalance helps explain both the boom and the contraction that followed.
“We really just let anybody who wanted to open one up,” he said, describing the state’s early approach as very hands-off, with low barriers to entry and few limits on production.
Growers purchased equipment, paid utilities and hired workers, who in turn spent money locally in what economists describe as a multiplier effect.
“There’s a lot of other industries that are potentially impacted,” Whitacre said.
In some rural areas, Whitacre said, grow operations became significant customers for local water systems and utilities.
“Growers are paying their water bill on a regular basis,” he said, adding that some operations contributed “a pretty significant amount of money” to rural water associations.
His research also found effects in local housing markets. Counties with high concentrations of growers saw housing values rise after legalization, in some cases driven by outside investors purchasing land for cannabis operations.
“People were showing up with suitcases of cash, saying, ‘we would like to buy your property,’” Whitacre said.
Where the excess goes
The oversupply also raised a practical question: where was all the excess cannabis going? Law enforcement officials said much of that excess production has long flowed outside the regulated market.
Mark Woodward, spokesman for the Oklahoma Bureau of Narcotics and Dangerous Drugs Control, pointed to a persistent gap between production and documented sales.
“We know what’s going on,” he said. “It’s going all over the country, supplying probably just about every state.”
According to Woodward, the economics are straightforward. Illicit operators can produce cannabis at a fraction of the cost of licensed businesses, avoiding taxes, compliance costs and labor standards.
That allows them to undercut legal producers and, in some cases, to infiltrate the regulated market.
“The legitimate dispensaries were going broke because the dispensary across the street was making money selling untaxed black market marijuana that they bought cheap,” he said.
Some transactions, Whitacre said, occur through gray-market channels in which legally purchased cannabis is later resold informally, while others bypass the regulated system altogether.
“I think it’s a combination of those,” he said.
The broader economy
For industry representatives, the effects of that contraction extend far beyond growers and dispensaries.
Matthew Phillips, a board member of the Oklahoma Cannabis Industry Association, said the industry is often misunderstood as a narrow sector when, in reality, it is a network of interconnected businesses.
“I think that is actually the smaller part of the industry,” he said, referring to growers and dispensaries.
That network includes suppliers, legal and accounting firms, compliance companies and trades such as HVAC, electrical and plumbing, along with specialized services that exist almost entirely because of cannabis demand.
Some of those dependencies are highly concentrated. Phillips pointed to testing laboratories, compliance firms and legal offices that operate almost entirely within the cannabis sector.
“If the industry was to go away, those analytical testing labs are also effectively out of a job,” he said.
As the market contracts, those effects ripple outward.
In smaller communities, Phillips said, cannabis businesses became embedded in local economies.
“All those employees are eating, shopping, living in the local economy,” he said, pointing to downstream effects on grocery stores, gas stations and other local businesses.
Landlords are often among the first to feel the effect, particularly when struggling businesses fall behind on rent before closing.
“By the time they’re shut down, they may be two, three months behind,” he said.
Phillips also noted that the state itself has built regulatory infrastructure around the industry, including employees dedicated to licensing, compliance and enforcement.
“Well, industry goes away, that’s a couple hundred people that no longer need to be employed by the state,” he said.
Whitacre said proposals to eliminate the industry altogether raise difficult economic and legal questions because of how deeply embedded cannabis has become in parts of Oklahoma’s economy.
“We created this large industry and now there’s this idea, well, let’s just make it go away,” he said. “I don’t see how that’s done easily.”
Many operators, he noted, invested their life savings in businesses created under a legal framework approved by voters and licensed by the state.
“It seems like there has to be some kind of payment to the places that you said, ‘we’re going to allow you to exist and now we’re not going to allow you to exist,’” he said.
Phillips said that even if the legal cannabis industry were to be shut down, it wouldn’t eliminate the demand.
“The industry doesn’t go away,” he said. “There’s still going to be people buying it. It’s just not going to be at a dispensary.”
The state’s view
State regulators said the industry remains in transition.
According to the Oklahoma Medical Marijuana Authority, Oklahoma has nore than 2,000 licensed growers and more than 1,300 dispensaries.
OMMA officials also pointed to ongoing enforcement and compliance efforts, with 60 staff members dedicated to compliance and 25 assigned to investigations and enforcement.
While the agency confirmed that its 2023 study accurately reflected an oversaturated market at the time, officials said they are now conducting additional research to better understand current conditions. In follow-up responses, OMMA described the market as “a novel industry that is still undergoing significant and rapid change,” citing price fluctuations, enforcement activity and evolving federal policy.
Rather than offering updated estimates of the current supply-demand balance, the agency said it has commissioned additional research to track how the market evolves over time.
For operators like Bomar, that uncertainty is not theoretical.
It shows up in the price per pound, the monthly payroll and the question of whether the business can keep going.
What once looked like Oklahoma’s next oil boom has, for many, become something else entirely — a market still adjusting and a system still figuring out what remains after the growth is gone.
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.
