{"id":224212,"date":"2020-05-15T17:45:03","date_gmt":"2020-05-15T23:45:03","guid":{"rendered":"https:\/\/cannabisindustrylawyer.com\/?page_id=224212"},"modified":"2024-06-11T06:40:36","modified_gmt":"2024-06-11T12:40:36","slug":"is-the-florida-cannabis-license-market-about-to-open-up","status":"publish","type":"page","link":"https:\/\/cannabisindustrylawyer.com\/is-the-florida-cannabis-license-market-about-to-open-up\/","title":{"rendered":"Is the Florida Cannabis License Market About to Open Up?"},"content":{"rendered":"\t\t
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Is the Florida Cannabis License Market About to Open Up?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tLast week, the Florida Supreme Court heard oral arguments in the highly publicized case of Florida Department of Health v. Florigrown, LLC<\/em><\/a>.<\/strong> The Florigrown case has been getting a lot of attention<\/a> for several months now, and for good reason. If Florigrown is successful, the entire Florida cannabis market could be completely upended and major portions of the state\u2019s highly regulated cannabis regime could get thrown out entirely. This could open the floodgates for cannabis entrepreneurs in the nation\u2019s third most populous state. To make matters more interesting, the entire case could turn on one word: \u201cor.\u201d\r\n

\"FloridaThe Compassionate Medical Cannabis Act<\/h4>\r\nIn 2014, Florida created a limited program for certain patients to use low-THC cannabis. The Florida Department of Health authorized five \u201cdispensing organizations\u201d defined as \u201can organization approved by the department [of health] to cultivate, process, AND dispense lowTHC cannabis.\u201d \u00a7 381.986(1)(a), Fla. Stat. (2014). The way the program worked, dispensaries had to be vertically integrated. That is, they had to handle cultivation, processing, \u201cand\u201d dispensing of low THC cannabis.\r\n\r\nSince the initial five dispensaries were first licensed in 2015, the Department of Health has never accepted applications for a medical marijuana business. This sounds impossible, right? How can Florida go five years without a single dispensary application when licenses in Florida are selling for literally tens of millions<\/a> of dollars?\r\n

The 2016 Florida Medical Marijuana Amendment<\/h2>\r\n

Flash forward to November 8, 2016. With 71% of Floridians voting in favor, the state passed a constitutional amendment<\/span><\/a> for the legal \u201cUse of Marijuana for Debilitating Conditions\u201d, codified at Article X, Section 29 of the Florida Constitution. The Amendment also created a new kind of dispensary, known as a \u201cmedical marijuana treatment center\u201d or MMTC. MMTCs have a much more expansive definition than dispensaries, and are defined as \u201can entity that acquires, cultivates, possesses, processes (including development of related products such as food, tinctures, aerosols, oils, or ointments), transfers, transports, sells, distributes, dispenses, <\/span>OR<\/i><\/b><\/span> administers marijuana, products containing marijuana, related supplies, or educational materials to qualifying patients or their caregivers and is registered by the Department.\u201d Art. X, \u00a7 29(b)(5), Fla. Const.<\/span><\/p>\r\n

The Amendment also requires the Department to promulgate regulations to begin “registering” MMTCs, including “procedures for the issuance, renewal, suspension and revocation of registration, and standards to ensure proper security, record keeping, testing, labeling, inspection, and safety.” Art. X, \u00a729(d).<\/span><\/p>\r\n\r\n

Florigrown Enters the Market, Goes to the Supreme Court<\/h2>\r\n

In January 2017, Florigrown sought registration with the Department of Health as an MMTC. As the Department of Health explains in its brief<\/span><\/a>, Florigrown essentially sent a short letter to the Department, prior to any regulations even being in place. It was, to say the least, not the most thorough application<\/span><\/a>. The Department told Florigrown to come back after the Department implemented the required regulations.<\/span><\/p>\r\n

Before the Department could do so, the Florida Legislature imposed several requirements. Most notable and relevant to the Florida market, the Legislature required that Florida MMTCs be fully vertically integrated and also directed the Department to issue the limited MMTC licenses to certain entities, including those that were suing the Department after their dispensary applications were rejected earlier. Moreover, the legislature imposed a strict cap on the number of licenses in Florida. Shortly after, Florigrown filed its lawsuit.<\/span><\/p>\r\n

Florigrown won its challenge to the Department\u2019s licensing scheme at the district and appellate court levels, and the case made it all the way up to the Florida Supreme Court. The arguments\u00a0 <\/span>before the Florida Supreme Court came down to a few issues:<\/span><\/p>\r\n\r\n