Detailed Summary of the 7% Medical Marijuana Tax Class Action Lawsuit

This lawsuit, filed by Wilkin Law Firm on behalf of Oklahoma medical marijuana patients, challenges the 7% excise tax on medical marijuana sales (the “SQ 788 Excise Tax”). Plaintiffs allege the tax was illegally created, unconstitutionally amended, and unlawfully collected since it first went into effect on June 26, 2018.

Core Issues in the Lawsuit:

1. Unconstitutional Revenue Bill

   • Under the Oklahoma Constitution (Article V, § 33), revenue-raising bills must originate in the House, cannot pass in the last five days of session, and require either ¾ legislative approval or voter approval.

   • The Legislature violated these requirements when it amended the tax through measures like SB 18X (2023), which was passed on the final day of session.

   • As a result, the 7% tax functions as an unconstitutional revenue-raising measure.

2. Diversion of Funds

   • SQ 788 originally directed tax proceeds to fund the Oklahoma Medical Marijuana Authority (OMMA), with surpluses split between education and drug rehabilitation.

   • Later amendments diverted revenues into the Medical Marijuana Tax Fund for general state spending (including education programs and even the General Revenue Fund).

   • Plaintiffs argue this diversion violated Article X, § 19, which prohibits taxes levied for one purpose from being used for another.

3. Unlawful Double Taxation

   • Medical marijuana patients not only paid the 7% excise tax but were also charged regular state and local sales taxes on top.

   • Plaintiffs claim these additional taxes were never authorized under the original law until 2021, and even then, were applied improperly.

4. Equal Protection and Due Process Violations

   • Oklahoma law exempts prescription medications from sales tax.

   • Medical marijuana, however, prescribed by physicians to licensed patients, was uniquely singled out for taxation.

   • Plaintiffs argue this unequal treatment is discriminatory and violates constitutional guarantees of equal protection and due process.

5. Refunds for Patients

   • The lawsuit seeks a court-supervised refund process under state tax law (Title 68), allowing all qualified patients to recover excise taxes they paid unlawfully since 2018.

   • This could amount to more than 1 billion owed back to Oklahoma patients.

Relief Sought:

The plaintiffs are asking the court to:

• Declare the 7% excise tax unconstitutional as enacted and administered.

• Halt future collection of the tax unless brought into compliance with the Constitution.

• Order refunds of all taxes wrongfully collected since June 26, 2018, with interest.

• Enjoin the State from diverting tax proceeds to purposes other than those approved by voters.

• Ensure equal treatment of medical marijuana as physician-prescribed medicine.

In short: The lawsuit argues that Oklahoma unlawfully taxed medical marijuana patients for years, misused those funds, and violated constitutional protections. The case seeks to stop further illegal taxation and return the money to the patients who paid it.