A Lawsuit Challenging Oklahoma’s Marijuana Tax Wants Everyone To Be Reimbursed

By: Dale Denwalt – The Oklahoman

Oct. 13, 2025, 5:30 a.m. CT

Two Oklahoma residents are claiming that the 7% marijuana tax is illegal, and they want every patient who’s paid it to be reimbursed.

Adrian Keith Johnson and Tracy Neeley filed a lawsuit in Oklahoma County against the Oklahoma Tax Commission and state treasurer. The lawsuit claims that the 7% excise tax on all medical marijuana sales is unconstitutional based on Oklahoma’s strict rules about creating new taxes.

They also suggest a fix — the creation of a refund program that will return “more than one billion dollars” to patients who paid it. The lawsuit claims that, with compounded interest, Oklahoma’s Tax Commission has collected more than $1 billion from patients buying medical marijuana.

Their numbers don’t add up, though.

Each month, the OTC publishes details about medical marijuana tax revenue. From 2018 until the end of September 2025, the state has collected only $337 million from the excise tax (about one-third of what they’re asking). Excise tax is separate than the retail sales tax collected by the state and local governments.

Tulsa attorney R. Charles Wilkin filed the lawsuit for Johnson and Neeley. He did not return a call asking for comment.

How marijuana is taxed in Oklahoma

When a licensed patient buys medical marijuana from a dispensary, the dispensary is responsible for collecting three separate taxes:

• Excise tax (7%): The medical marijuana excise tax was created to offset the cost of running the state’s medical marijuana program.
• State Sales Tax (4.5%): Oklahoma currently levies a 4.5% tax on all sales, whether you’re buying marijuana, electronics, food, whatever.
• Local Sales Tax (varies): Cities and counties can implement their own sales tax rate. In Oklahoma City, it comes out to 4.125% of each purchase.

When voters first approved State Question 788 to legalize medical marijuana, the excise tax was earmarked directly for regulation of the industry under the Oklahoma Medical Marijuana Authority. Any surplus funds would be sent to education and substance abuse programs.

Lawmakers have since altered the formula twice.

Now, OMMA is funded separately by fees and fines. The 7% excise tax currently is only used for substance abuse and education programs administered by other state agencies. Those funds are to be spent at the legislature’s discretion.

Lawsuit claims tax was illegally created, collected

The main argument presented in the lawsuit is that Oklahoma’s laws and prior court rulings about creating a new tax make the 7% excise tax collection unconstitutional.

Because that money isn’t tied to a specific purpose — in this case the regulation of the industry — they claim it violates the rules.

“Its design and use demonstrate a primary purpose to raise general revenue, subjecting the levy and its legislative amendments to (the Oklahoma Constitution’s) revenue-bill requirements,” the lawsuit states.

The constitution requires that every tax “shall specify distinctly the purpose for which said tax is levied.” The lawsuit claims that by giving the legislature some discretion on how to spend the money, it violates the law.

Wilkin also argues that Oklahoma law generally exempts the purchase of medicine from sales tax.

“The state nonetheless imposes a unique, additional 7% excise tax on this class of medical purchases to fund broad governmental purposes unrelated to regulating patient purposes,” he wrote.

The petitioners have requested that the court certify the lawsuit as a class action so that patients can be reimbursed for the tax that they claim was illegally collected.

State preparing its response to marijuana tax lawsuit

The Oklahoma County District Court has given the state until Oct. 15 to file its reply.

The lawsuit specifically names the Oklahoma Tax Commission and Oklahoma treasurer. A spokeswoman for the Treasurer Todd Russ said the office does not comment on pending litigation. The OTC did not respond to The Oklahoma’s request for a comment in this article.

If the case proceeds, the court will have to determine whether to create a class of individuals who would benefit from a tax reimbursement. It would then officially become a class-action lawsuit.

Original Article Can Be Found Here: https://www.oklahoman.com/story/news/state/2025/10/13/medical-marijuana-tax-lawsuit-claims-oklahoma-passed-illegal-tax/86622900007/