Florida finally adopts new rules for awarding medical-marijuana licenses
the better part of a decade, the Florida Department of Health’s rules on how businesses can enter the state’s medical-marijuana industry are finally here. Sort of.
On Monday, the Department of Health released two emergency rules that indicate, in broad strokes, the application process for companies seeking a medical-marijuana treatment center license, which permits them to cultivate, process and dispense medical marijuana.
One of the rules released Monday says the state will hand out the licenses by “batching” them — meaning not all of the new licenses will be available at once. But the new rule did not specify when the applicense cation window will open or exactly how many licenses will be up for grabs with each batch. It’s also not clear how far apart the batches will open.
In an email, a spokesperson for the Department of Health said the new rules also incorporate the “citrus preference,” which gives preference to applicants who own at least one facility used to process citrus and who will use that facility to process marijuana.
Because of protracted litigation and regulatory inaction on the part of the state, just 22 companies are currently licensed to operate in Florida’s medicalmarijuana industry. Just 19 medical-marijuana providers have set up a store.
State law requires regulators to create four new treatment-center licenses for every 100,000 new patients who enter the market. But the state has awarded just one new liAfter through the application process since 2015. With the state reporting more than 776,000 patients as of last week, the state is required to bring 22 additional operators online.
ONE NEW LICENSE IN 2022
The state awarded a license this year to Gwinn Brothers Medicinals as a part of the application process for Black farmers. A 2017 bill passed by the Legislature required the state to set aside one license for Black farmers, who alleged in lawsuits known as the Pigford cases that they were discriminated against by the U.S. Department of Agriculture.
But like seemingly every other marijuana license awarded by Florida, that decision has been subject to litigation. The business that scored the highest on the application, Hatchett Creek Farms, was not awarded the license because its majority stakeholder died during the application process, a lawsuit alleges. Now, the man’s family is suing, arguing it should have been awarded the so-called Pigford license.
Sally Kent Peebles, a cannabis-law attorney, said the state’s “batching” of licenses might be an attempt by the state to avoid the heavy litigation that came with the application cycles of years past.
For applicants who spent thousands of dollars putting together a team and carefully curating an application only to be denied, the new rules could assuage them to know they have another opportunity, Peebles said.
”It kind of takes the wind out of the sails of their argument if they can just apply in the next batch,” Peebles said.
Most applications, even if they are resubmitted, will require a non-refundable $146,000 fee. (This is not the case for the businesses that were denied the Pigford license.) Once awarded, medical-marijuana licenses can be resold for tens of millions of dollars.
NIKKI FRIED CRITICAL OF NEW RULES
Agriculture Commissioner Nikki Fried, who has long advocated for a more open marijuana market, said she expects the state’s new rules to further hinder businesses from entering the market. Her office does not oversee the state’s medical-marijuana program.
Fried, a Democrat, said she expects the application process will be based on the idea of “need,” and that the state will determine there is none. Before being elected, Fried was a lobbyist and lawyer specializing in cannabis. Her term in office expires Jan. 2.
“If that is their end game, to not hand out new licenses, then they’re going to work backwards to figure out what is the equation necessary,” Fried said.
Josephine CannellaKrehl, a member of the Florida Cannabis Action Network’s Legislative Leadership team, said more applications mean more competition, which makes for better patient access.
But she’s concerned that smaller farmers might be priced out because of the application fee.
”I kind of wish that it was more open to the general public because you really have to have a lot of money to be able to even qualify for the license,” she said.
With about only two dozen companies serving the needs of so many patients, there’s not enough competition in the marketplace, Sen. Joe Gruters, R-Sarasota, said.
“There should be as many players in the market as possible,” Gruters said.
The second new rule makes it more expensive for marijuana businesses to renew licenses every two years, raising the cost from about $60,000 to more than $1 million.