Florida has begrudgingly operated the nation’s most exclusive medical marijuana market since voters approved Amendment 2 in 2016. It is exclusive by design, offering licenses only to a select handful of well-endowed business interests. Now, Florida must minimally expand this good ‘ole boys club of licensees to bring the state back into compliance with its laws.
The Florida Department of Health, which oversees the state’s medical marijuana program, published emergency regulations last month announcing that it will make 22 additional licenses available to operate a medical marijuana business in Florida. That would double the existing number of medical marijuana business licenses and satisfy statutory provisions requiring the number of licensees to grow in proportion to the population of registered medical marijuana patients in the state.
Florida is years behind schedule in making these new licenses available. Last September, a state appeals court judge admonished the Department of Health’s delay tactics, insinuating that agency lawyers had misrepresented their intentions to the court. The judge also noted that nearly five years had passed without the department making new licenses available as it should have.
Unfortunately, the agency foot-dragging seems destined to continue. The new emergency regulations declare that the new medical cannabis licenses will be awarded in so-called “batching cycles,” in which the state can choose to make as few as one license available at a time. Any applicants applying for that single license would need to pay a non-refundable application fee of $146,000 and have five days to prepare an exhaustive license application detailing security, operational and staffing plans, facility designs, and financial holdings of all proposed owners and operators.
Florida’s Office of Medical Marijuana Use estimates that 150 applicants will seek a license. Those that do not win a license in the first batching cycle would need to re-apply in a subsequent batching cycle and submit another non-refundable application fee of $146,000. The agency reserves total discretion to establish its timing for opening any batching cycle.
This move continues years of medical marijuana obstructionism by Florida’s political class. Amendment 2 required Florida to adopt implementing regulations within six months of its 2016 passage. But the legislature elected to provide no guidance during its spring 2017 session, although then-Gov. Rick Scott called lawmakers into a special session to debate the issue that June.
The legislature adopted a statute that prohibited smokable marijuana products—a provision the state courts later ruled violated the intent of Amendment 2. The legislature also limited the initial number of medical marijuana licenses to 10, allowing wealthy owners of citrus processing facilities to secure two of the licenses.
Perhaps most significantly, the statutory provisions prohibit the state’s medical cannabis licensees from wholesaling any products amongst each other. In most states with legalized medical marijuana, a licensee can operate a cannabis cultivation facility at any scale and can manage and wholesale their products to other manufacturers or dispensaries. In Florida, however, full vertical integration is required, which means a medical marijuana business must have large amounts of money needed to build out multiple types of facilities in an industry where federal law still prohibits access to bank loans and other traditional sources of financing. This requirement effectively established barriers for smaller businesses wishing to operate in Florida.
Current Gov. Ron DeSantis has furthered medical marijuana opposition. DeSantis recently noted the pent-up demand for medical marijuana licensees and said he wants to charge more for the privilege of doing business in the state.
“I mean, these are very valuable licenses,” Gov. DeSantis said. “I would charge them an arm and a leg. I mean, everybody wants these licenses.”
The DeSantis administration also issued a new fee schedule for renewing existing cannabis licenses that raises the two-year fee by more than 2,000 percent, from about $60,000 to $1.33 million.
“Why wouldn’t we take the opportunity to make money for the state based off those [licenses]?” DeSantis asked rhetorically before the increase. At the time, he elaborated, “I do think that would require a statutory change, and I don’t think that’s something we could just do through administrative rule.” Yet, his administration is doing it through an administrative rule.
The amendment to legalize medical marijuana in Florida got over 71 percent of the vote in 2016. Nearly seven years later, Florida’s politicians should finally stop using red tape, fees, and bureaucracy to block businesses that want to provide legally prescribed medication to patients in need.