Court: Pot law creates ‘oligopoly’

Appellate judges uphold part of ruling backing grower

TALLAHASSEE — Florida’s law requiring pot operators to grow, process and distribute cannabis and related products created an “oligopoly” and runs afoul of a constitutional amendment that broadly legalized medical marijuana in the Sunshine State, an appellate court ruled Tuesday.

The 1st District Court of Appeal’s decision sent shockwaves through the state’s rapidly growing medical marijuana industry, in which licenses are routinely selling for upwards of $50 million.

The three-judge panel’s ruling upheld in part a decision issued last year by Leon Circuit Judge Charles Dodson, who sided with Tampa-based Florigrown in a lawsuit alleging a state law, passed during a 2017 special legislative session, did not properly carry out the amendment.

Tuesday’s ruling is “a good thing for the state of Florida,” said Joe Redner, a Tampa stripclub operator and one of Florigrown’s owners.

“If the Legislature can create oligarchies in any field, it’s crony capitalism. They’re picking winners and losers. And that’s not fair. It’s not right. It’s not constitutional,” Redner said.

Florigrown CEO Adam Elend called the ruling a “game-changer.”

“It drops a bomb on the current licensing scheme. It’s just changing the whole regime,” Elend said. “People are not getting medicine. The dispensaries are out of stock all the time. The products are limited, and the prices are high. That’s what happens in an oligopoly and that’s what we have.”

Dodson issued a temporary injunction requiring state health officials to begin registering Florigrown and other medical-marijuana firms to do business, but the judge’s order was put on hold while the state appealed. Dodson’s ruling also struck down a portion of the state law that set a cap on the number of medical marijuana operators in the state, which Tuesday’s appellate decision supported.

The statute “creates a vertically integrated business model which amends the constitutional definition of MMTC (medical marijuana treatment centers) by requiring an entity