What is Happening to Florida Medical Marijuana Industry Today?

What is Happening to Florida Medical Marijuana Industry Today?

Almost a year has passed as Floridians overwhelmingly voted for the constitutional amendment to regulate medical marijuana industry in the Sunshine State.  What is happening to Florida Medical Marijuana Industry Today?

 

On October 24, 2017, Christian Bax, the head of the office of Medical Marijuana Use, was seriously grilled in the Florida Senate.   Senators Young, Book, Powell and others put a lot of pressure on Mr. Bax.  The main concern was the Department of Health (DOH) failure to implement the law that passed in the special session in June of 2017.

 

DOH was legally obliged to grant additional licenses by October 3, 2017.  Mr. Bax, however, with the help of DOH attorney explained that a legal challenge over black farmer license, filed in September of 2017, stalled the process.  The Plaintiff in the lawsuit asked the Court to issue a preliminary injunction on the medical marijuana laws implementation until after the constitutional challenge is dealt with.  This injunction has a potential to trump the application and license issuance process.

 

The Senators did not buy this argument.  Senator Young, for example, pointed out that the government entities and others are being sued every day.  It does not take too much to file a lawsuit.  Thus, just a mere fact of filing a lawsuit shall not postpone the process of licenses’ issuance.

 

Other Senators were also outraged.

 

Florida Medical Marijuana advocates and participants are split into two categories supporting one or the other of the two groups.  The law, however, is on the DOH side, and no one but the lawmakers afforded that protection to DOH.

 

The bill SB 8A became law after the Governor signed it on June 23, 2017.  In addition to the regulations part, the law provides for the defenses to DOH’s inaction.  Page 75 of the law states that a lawsuit challenging the constitutionality of the Medical Marijuana law grants DOH a defense should a lawsuit be filed due to DOH’s failure to act.

 

The said lawsuit does challenge the constitutionality of some parts of the law.  That means that DOH’s failure to issue new MMTC licenses is legally justified whether we want it or not.  DOH does not have to act until and unless all legal challenges to the law are over with.

 

This language is nowhere to be found in Senator Bradley’s leading bill (S 406) on medical marijuana amendment implementation in Florida.  However, the exact language is found in Representative Rodriguez bill (HB 1397) first registered on March 7, 2017.  The new SB 8A was a hybrid of those two bills with some modifications (for example, “citrus language” was added which is a subject to a separate article).

 

It looks like the situation with lawsuits challenging the constitutionality of the law was anticipated from the very beginning.  The lawmakers gave an absolute protection to DOH as to when to act on the law implementation should a lawsuit be filed.

 

Now, who is to benefit from DOH not issuing additional licenses?  Florida government attempting to polish the rulemaking?  DOH trying to promulgate the regulations?  Medical marijuana patients having less access to the diversity of companies, products, and prices? Or maybe the current license owners operating on the new market with less competition?

 

Seven current license owners are going full force and six more awaiting the DOH approval to join the others.  The longer DOH stalls the process of issuing new licenses, the better off are the current license owners.  This is pure economics.

 

You may ask: how can we change this situation to afford more free competition?  The only legal way to do that is to strike the above-mentioned language from the law through the legislative or judicial action.  The Florida lawmakers have all power in their hands to address this issue.

 

Stanislav A Shamayev, Esq.

Four (4) Reasons Why Florida May Impose A Bottom-Line Investment Requirement For The Medical Marijuana Industry

Four (4) Reasons Why Florida May Impose A Bottom-Line Investment Requirement For The Medical Marijuana Industry

Medical marijuana investment in Florida? A bottom-line investment requirement is something the nationwide legal cannabis industry has not seen in the past. However, things have been changing lately. One example is Pennsylvania, the State that just opened up its market for the investments to flow in. In addition to wiping off the residency requirement for the business owners, Pennsylvania set out the monetary threshold to enter the market. For a medical marijuana dispensary license it is $150,000, and for cultivation/processing license it is $2,000,000.   Is this a new trend or an isolated experiment? Below are the four reasons why Florida may follow the Pennsylvania example.

 

  1. Florida Has Already Done Something Similar

Although Florida Compassionate Medical Cannabis Act did not provide any restrictions on the investment, yet it did set the number that would limit the pool of the potential investors. By having said this, I mean the performance bond in the amount of $5,000,000 that the law required a license awardee to post with the State within 10 days after obtaining the license.

 

Moreover, the Bill Senator Jeff Brandes filed for the 2017 legislative session also provides for $1,000,000 performance and compliance bond. Senator Rob Bradley filed another bill providing for $5,000,000 performance bond that decreases to $2,000,000 after 1,000 patients register with the business.  Chances are the same language will appear in the new bill.

 

  1. Florida May Want To Protect The Industry From Failures

Statistically, 2/3 of the legal cannabis enterprises fall out within the first three years after the market opens up. There are numerous reasons for this tendency. The most important one, however, is that many cannabis businesses are not financially ready to survive the competition and the initially slow pace of the developing markets. In other words, the businesses run out of money and have to shut down. The bottom-line investment requirement, thus, provides better chances for new businesses to survive the inception of the industry.

 

Without such requirement, many businesses will wind up leaving gaps in the market and promoting the monopoly or oligopoly, which in turn will negatively affect the pricing and the quality of medical cannabis.

 

  1. Florida May Want to Ensure The Validity Of The Investment

This reason is intertwined with the previous one. Serious investors with unlimited resources are not the ones that need validation. Businessmen with fewer resources are the suspect ones. A businessman who has invested the life savings into a medical cannabis project is in the highest risk zone as there are various variables that no one has control over. If things work out, the business will be a success; if not, that businessman loses everything.

 

An investment will be valid if an investor is aware of how much the State expects her to invest in order to survive the initial stages of the development. This measure, although limiting the pool of potential investors, may promote the safeguards of the industry in a long run. Protecting those investors that simply cannot afford to be a part of the industry is an important public policy consideration as well.

 

  1. Florida May Want to Protect The Patients

The last but not least is the protection of the medical cannabis consumers. Florida will want to make sure that patients will receive the highest quality of the medicine along with the most reasonable prices. This price-quality balance will only be possible if the industry is stable and develops gradually.

 

As the bottom-line investment requirement will provide better chances of survival for new business, the patients will get medical cannabis of greater quality and better prices. This is the result of more expensive equipment and sophisticated technology investors are capable of affording.

 

Plus, the industry that develops harmoniously and without shake-offs has a natural process of healthy competition for patients. More businesses means more competition for quality and prices. With lower prices and higher quality, the patients are better off.

 

Conclusion

Although there are more questions than answers, we may expect Florida to set the lowest investment requirement for the medical marijuana industry in the form of a performance bond.   To assess whether it is a good thing or not, more details needed on how exactly Florida will approach this issue. Nevertheless, the requirement will definitely leave a lot of smaller businesses out or at least push them to partner up and pool the resources in order to participate and survive.

Vertically Integrated System Medical Marijuana System In Florida

Vertically Integrated System Medical Marijuana System In Florida

At this time, Florida has a closed vertically integrated medical marijuana business system where one license owner is able to cultivate, process, transport, test, and sell the medicine. This is not the only possible way of regulating the industry. In fact, it is the most inferior way. This article discusses all aspects of the existing industry structure, other states’ experiences, and the ways Florida may modify or completely change the current limited system.

Cons and Pros of The Closed Vertically Integrated Medical Marijuana System.

The closed vertically integrated system has its pros and cons. We are going to begin this discussion by identifying the cons, as there are so many of them. First of all, one cannabis strain has a potential to affect patients’ medical conditions differently. Certain strains of medical marijuana are considered suitable for specific ailments. The larger the variety of strains, the better the chances for a patient to find the best selection for her personal condition.

Moreover, even the same strain may affect two patients differently due to each body’s unique biochemical composition. It means that patients need a great diversity of the strains cultivated. Very limited amount of licenses will lead to limited cannabis strains availability on the market. This is due to the fact that there is about a dozen of popular strains, such as Sour Diesel, that almost any grower will produce. Thus, about 70-80% of overall production will be limited to the most popular strains. The rest will constitute the “diversity” of strains. Lack of competition in the market will not induce the license holders to grow a greater variety of medical marijuana strains. And a dozen of types will not suffice.

Second, the quality of the medicine is negatively affected. In the open market, the best quality of a product is the key to success. The growers and processors strive to produce the superior quality of the medicine to make it more marketable. With a limited number of growers and processors, the quality of cannabis will decrease as the patients are forced to buy from what is available.

Third, the prices are higher. This result, of course, stems from a limited supply the oligopolistic companies provide. Combined with the lower quality of the medicine, this undermines the entire compassionate aspect of the industry and sets the limits for the patients to get so much needed relief.

Fourth, the State has less control over the flow of the medicine and money. The more businesses are involved in transactions, the larger number of them have liability and duty to report to the government.   With the implementation of a sophisticated tracking software, it becomes practically impossible for medical marijuana businesses to deal with the gray or black markets when license owners report each step. Conversely, in the case of the fully integrated licenses, the control over all transactions is in the same hands. Same people are responsible for all processes and transactions from seed to sale, making the entire process less transparent.

This is called a conflict of interest—the main reason why advanced medical marijuana jurisdictions disintegrated or significantly modified the industry. By way of an example, Florida will have to set up the regulations on the testing of cannabis quality. If a grower or processor get to conduct the testing, what are the guarantees of the properness of such testing? And who is the gatekeeper?

Fifth, the vertically integrated system hinders the expansion of the industry. This means fewer jobs, fewer investments, and low economic boost. In the disintegrated system, each type of license should be separately applied for and different locations for the facilities are generally implied, whereas the integrated license assumes the tendency to grow, process and test in the same facility. Sometimes even a retail store may be located at the same place.

Sixth, the integrated licenses are a great target for criminals. When all operations are occurring in the same location, it makes it more lucrative for criminal minds to pay their attention to this fact. Imagine, an integrated license facility is burglarized. The criminals will get flowers, extracts, and maybe even cash money at one point in time. This is not only devastating for the business, but also dangerous for the community, as the regulated medicine will become available to people without doctor’s recommendation.

Finally, what are the pros of a closed vertically integrated industry structure? Apparently, all the benefits are going to the owners of the licenses rather than the community and the State. The pros include large profits, less overhead, less money spent on branding and marketing, less money spent on competing with the others, meaning no need to improve the quality or increase the variety of the product.

At this point, many readers would want to ask, “How do the patients and the State benefit from a vertically integrated system?” The only way for all interested groups to benefit from the medical marijuana industry is to implement a disintegrated system. With the disintegrated system, Florida will have the variety of strains, better quality of medicine, lower prices, better control over the industry, boost the economy, and lessen criminal activity.

How About Other Legal Marijuana States? 

Let’s see now how other medical/adult use States implement these benefits.

Notably, the current structure of the Florida cannabis industry is one of its kind after the passage of the Amendment 2.   It is not clear whether the lawmakers took another state’s model and modified or tried to create something new. For instance, New York is also a closed vertically integrated system. There, the State allocated five licenses. However, New York was developing its industry parallel to Florida. So there was neither statistics nor raw data available on how successful that system was. Even more surprisingly, Florida legislature has created the system, which the older cannabis jurisdictions have been trying to significantly modify or get rid of.

Colorado is one of them. In the past, Colorado also pushed the businesses to obtain a license that allowed them to grow, process, and sell medical marijuana. Nevertheless, the State, as time progressed, modified the system and added multiple separate types of licenses while still keeping the old ones.

California, the oldest medical marijuana jurisdiction in the US, allowed vertical integration in the past. The State is taking a different approach now. Under Medical Marijuana Regulation and Safety Act (the “MMRSA”), the State offers 17 types of licenses. At the same time, under some limited exceptions, California allows the integrated licenses that existed before July 1, 2015.   Moreover, MMRSA expressly creates a restriction to prevent vertical integration: a licensee cannot hold more than two separate types of licenses.

Hawaii and Arizona are fully integrated systems. Hawaii has, just like Florida, closed vertically integrated system. There is no data on Hawaii yet as the industry is not operational as of now. Arizona cannabis industry, although vertically integrated, is not a closed system. Arizona has issued about 80 licenses that can grow, process, transport and sell medical marijuana. 31 out of those 80 licenses have been issued recently.

Washington disallows vertical integration.

A lot of smaller states, like Connecticut, Maryland, and New Hampshire, also have vertically integrated systems but those states are so small in comparison to Florida that using the data from them for our analysis is quite questionable.

What Florida Will/Should Do With Its Medical Marijuana Industry As The Amendment Passed?

We do not know exactly how lawmakers will approach this issue.   So, all we can do at this point is to try and analyze the plain language of the Amendment 2 and see if the authors left any tips or guidelines on how it should be implemented.

First of all, let’s see how the amendment defines the Medical Marijuana Treatment Center (MMTC). MMTC “means an entity that acquires, cultivates, possesses, processes (including development of related products such as food, tinctures, aerosols, oils, or ointments), transfers, transports, sells, distributes, dispenses, or administers marijuana, products containing marijuana, related supplies, or educational materials to qualifying patients or their caregivers and is registered by the Department.”

So MMTC is an organization that grows, processes, transports, or sells medical marijuana to registered patients and registered by the Department of Health (DOH).  The conjunction “or” is there for a reason.

Further, within 6 months after January 3, 2017, the DOH should promulgate “[p]rocedures for the registration of MMTCs that include procedures for the issuance, renewal, suspension and revocation of registration, and standards to ensure proper security, record keeping, testing, labeling, inspection, and safety.”

Let’s combine the two. By July 3, 2017, DOH must promulgate the rules for registration of organizations that may grow, process, transport, or sell medical marijuana to registered patients.

Following the plain language of the Amendment, it mandates the expansion of the medical industry providing new licenses for all types of activities in the medical marijuana market.

The way to disintegrate the current system of licensing is the topic for a new article.

Leave the Terpenes Alone

Leave the Terpenes Alone

To Smoke or Not to Smoke

The current limited medical marijuana laws in Florida do not allow consumption of medical or low-THC marijuana by means of smoking the flowers. The logic behind such prohibition is understandable. The Department of Health (DOH) considers inhaling the smoke from burning medical marijuana unhealthy. DOH allows other alternative forms of medical marijuana like oils and tinctures. Such products are suitable in many cases, especially in those where medical marijuana administered to children with epilepsy or muscle spasms.

 

Statistically, the smokable forms of medical marijuana are leading the industry with over 55% of the market in the nation. This data shows that there is a huge demand among the patients for cannabis flowers. Over a half of the patients nationwide prefer “old school” method of cannabis consumption through smoking.

 

There are multiple reasons for that. First of all, it is simple. Second, the relief comes almost immediately. Third, many patients report that smoking the flower produces a significantly different medical effect in comparison to consuming an extract. The last point actually brings us to the main topic of this article.

 

The flavor, smell, taste and some other characteristics of cannabis are the results of the presence of different kinds of terpenes in a plant. Terpenes are organic chemical compounds that give those numerous properties to medical marijuana. Terpenes are produced in the resin glands of the cannabis plant.   However, the sensory effects are not the main function of the terpenes.

 

Terpenes act synergistically with cannabinoids like TCH and CBD—the main chemically active compounds of cannabis—to produce the relief the patients need. This happens by means of terpenes attaching to cannabinoid receptors in a brain and affecting the chemical output. Terpenes may also modify how much cannabinoids pass through blood-brain barrier—the mechanism that protects the brain from infections. Moreover, it has been proven that terpenes are capable of suppressing the toxic effect caused by THC. Terpenes are also believed to affect the production rate of the hormones like serotonin or dopamine. These mechanisms enhance the medical effects or relief from medical marijuana. The scientific studies prove that the medical effects and relief largely depend on terpenes.

 

However, all these positive effects may be significantly weakened. This happens during cannabis processing. In other words, when cannabis is turned into oil, extract or any other concentrated medium, the process of conversion rids the final product of terpenes. As a result, the medical effects of cannabis can be seriously damaged due to terpenes vaporization. Therefore, the ultimate effect of the medicine is negated.

 

Many States, such as Colorado, California, or Washington, allow patients to smoke or vaporize marijuana flower. The example of a State that does not allow it is Pennsylvania. There, the legislature has already prohibited the smokable form of cannabis for its future industry.

 

The effect of such prohibition is profound. Because of this limit, the State had to integrate the growing and processing licenses into one type of a license. This, in turn, limits the business opportunities and skips one step (transaction) in the industry. This can also lead to the conflict of interest that manifest itself in the vertically integrated license States (licenses that allow growing, processing, testing, and selling cannabis just like in Florida at the moment).

 

In case a prohibition of medical marijuana flowers occurs in Florida in the future, there will be a significant impact on the patients, businesses, and the State. The patients may not have the most effective means of consumption. The medical marijuana businesses will lose the opportunities for investment. Finally, the State will encourage the creation of the black market within the industry and have less transparency combining the cultivation and processing licenses.

Five Reasons Why Florida Medical Marijuana Industry Is A Mess

Five Reasons Why Florida Medical Marijuana Industry Is A Mess

Medical Marijuana in Florida

Floridians have spoken loudly and 71% of us voted Yes on 2. After the excitement over the passage dissipated, we started facing issues of Amendment 2 implementation. As it turns out, Florida is a big mess. There is a conflict between the existing low-THC regulations (2014 laws) and a fully blown medical marijuana industry of the future (2017 laws).

 

A slowly-ticking bomb was set in 2014, when the Governor signed Compassionate Care Act into the law. The act provided for issuance of the five vertically integrated medical marijuana licenses in the five geographical regions in Florida.   The law allowed the license holders to grow, process, and sell low-THC/high-CBD cannabis. The sixth and seventh licenses were issued through the judicial proceedings.

 

The timer for the bomb began ticking faster after the passage of Amendment 2. As this article is being written there are five medical marijuana dispensaries (retail stores) in Florida. Those dispensaries can sell low-THC and high-CBD cannabis to the patients with cancer, epilepsy, and muscle spasms. They can sell full force marijuana to terminally ill patients that would die within a year if a doctor does not intervene. On January 3, 2017, the constitutional amendment went into effect and the Department of Health issued preliminary regulations. Below are five reasons why there is a big mess for the lawmakers to clean up.

  1. Amendment 2 Provides For More Qualifying Symptoms.

Under the Amendment 2 language, a lot more ailments will allow qualifying patients to access medical marijuana. Diseases such as HIV, Glaucoma, PTSD and others will qualify a patient for the medical marijuana identification card. Florida Department of Health will promulgate the laws by July 3, 2017, on how such cards can be obtained.

 

Now, the question is how Florida will balance out 2014 and 2017 laws?  Just adding the new ailments to the old program will definitely contradict the language and spirit of the constitutional amendment, as it provides for a free and competitive market. The current dispensaries can sell only for the ailments enumerated in 2014 laws.

 

Does the constitutional amendment automatically allow the current license holders to sell medical marijuana (with high THC content) to the patients with debilitating symptoms listed in the Amendment 2 text? There is a good argument that yes they can. There is a counterargument that they cannot as the current sales are regulated by 2014 law with 2016 modifications.  The current DOH regulations impose 90-day hold on issuing of the medical marijuana cards for any condition even terminal illness.

 

The Florida legislature is trying to be dealing with this issue through the bills currently filed with the Senate.

  1. Florida Cannot Run Two Medical Marijuana Programs Parallel.

This option is possible but not really feasible. Back in 2014, when the law was signed, it was done, in part, to prevent Amendment 2 from passing. The main argument of pro-regulation groups was that Florida did not have any program allowing cannabis to be grown and sold legally. The legislature answered with Charlotte Web law (2014 law). It looked and felt like a logical move then. However, today we see this issue differently.

 

An awardee of the license under 2014 regulations had to be able and ready to post $5 million performance bond to actually obtain the license after the selection. This bond is in no way an investment itself but rather an additional expense. The requirement significantly limited the pool of the potential applicants.

 

Now, whoever sets aside $5 million and invests X amount of money into building the infrastructure for operations expects to make much more money than that. The reasonable profit margins to cover these costs will be possible only after the fully blown industry is in place. Clearly, no reasonable investor will invest large amounts of money solely out of compassion.

 

Charlotte Web licenses were applied for and intended to get a head start in the opening market. Amendment 2 brings the expansion to the market, and there is no doubt that the current license holders will get a piece of the pie.

 

The issued licenses will have to be incorporated into the new regulatory system. The lawmakers should try hard to avoid the monopolization of the free market although certain bills are directly doing this.  This means issuing more licenses to grow, process, transport, test, and dispense medical marijuana while allowing the current license holders to be a part of the new industry.

  1. No One Knows How Florida Will Integrate the Old and the New Medical Marijuana Program.

Even the Florida lawmakers do not. State Rep. Katie Edwards, D-Plantation, who was the sponsor of the 2014 legislation, pointed out it should be the model going forward, “I think that people need to understand that the system is vertically integrated, so you need to look at the existing framework for cultivation, processing and dispensing.”  Senator Rob Bradley filed the bill that will reflect this quote and monopolize the Florida medical cannabis market.

 

Senate President Joe Negron said the legislature should take the text of the amendment and implement verbatim what the voters approved when the session begins in March.

 

State Senator, Jeff Brandes, R-St. Petersburg, favors the system where anyone can apply for the medical marijuana business license and allows dispensaries or processing labs operate separately from growers. This will allow smaller investors to set up medical marijuana businesses.

 

This philosophical conflict has already escalated during the period right before the legislative session began.  We have views from the both sides of the spectrum. Allowing either extreme to manifest will subject the industry to multiple lawsuits and slow down the implementation of the regulations.   Lawmakers will have to compromise.

  1. The Vertically Integrated System Does Not Limit The Medical Marijuana Dispensaries’ Count.

Trulieve, one of the six (seven) licenses under 2014 law, has already opened two dispensaries and several more are on the way. The other six license holders can do (and are doing) the same. Rob Bradley’s MMJ Bill does not limit the amount of dispensaries on the State level leaving it up to the municipalities to decide.  This approach is dangerous as local governments are easily lobbied by special interest and soon we may see the flood of dispensaries all over the place.  Senator Jeff Brandes, on the other hand, sets the limit on the dispensaries’ count: 1 per 25,000 persons in the county.

 

It is not clear how the lawmakers will compromise this issue.

 

Allowing one dispensary per county for 2014 license is probably the most reasonable resolution, if the new industry will provide for a limited amount of dispensaries per license.

  1. The Doctors’ Role Will Have to Change.

Now, in order for a patient to register with the Office of the Compassionate Use registrar, the patient needs to be under the supervision of a doctor for 90 days. Under Amendment 2 language, no such restrictions apply. Moreover, a doctor can recommend medical marijuana after a full examination and full assessment of the medical history.

 

Clearly, there is a conflict between very strict 2014 laws and more liberal text of Amendment 2. For example, Nevada implemented a new requirement for issuance of the medical marijuana cards within 48 hours after the doctor recommended the natural medicine to the patient.

 

It is still unclear how lawmakers will implement Amendment 2 language in that respect provided that DOH included the language in the preliminary regulations that contradicts the language of the constitution.  DOH requires the Board of Medicine to determine whether similar debilitating conditions will qualify a patient for medical cannabis.

Conclusion.

At this point, we have more questions than answers. Florida lawmakers and the Department of Health will have to act first, as the legislative session has 1.5 months to go.   The collaboration of these two entities should implement the will of the overwhelmingly large amount of Floridians who supported the change.

Stanislav A Shamayev, Esq.

How Florida Should Regulate #1: Medical Marijuana Reciprocity

How Florida Should Regulate #1: Medical Marijuana Reciprocity

What Is Medical Marijuana Reciprocity?

On November 1, 2016, DC Council approved reciprocity for medical marijuana cardholders from other states. This measure will allow patients that use medical marijuana for their ailments to have access to the medicine while traveling in or visiting Washington DC. Allowing the patients from other states to buy medical marijuana in Washington DC not only makes the capital more welcoming but also shows to the nation the progressive thinking and change of attitude in the medical marijuana policymaking.

Washington DC changed its current medical marijuana laws through “Medical Marijuana Reciprocity Act of 2015.” However, Washington is not the first state to do so.  Maine, Arizona, Nevada, Michigan, Pennsylvania New Hampshire, Rhode Island and some other states also have implemented some kind of medical marijuana reciprocity in their legislation.

Why Should Florida Do Medical Marijuana Reciprocity?

There are different reasons why Florida should add a similar provision in the future regulations. The most important are as follows.   Florida has over 100 million tourists visiting the State every year.  No doubt, among tourists and snowbirds, there are some who possess medical marijuana cards from their states or countries.   The cardholders should not risk violating federal laws trying to carry the medicine on the plane board.  Instead, they should be able to buy the medicine in the local dispensaries.

By allowing the tourists and visitors access to the Florida dispensaries, the State will expand the local market, which is already estimated to be $1.5 billion by 2020.   The money tourists spend in Florida stay in Florida. The governments further receive more taxes in the budget in the form of excise/sale or income taxes.

Compassion is the third one. The entire industry is built on compassion. In Florida, the department in charge of the current limited medical marijuana program is called The Office of Compassionate Use. We are as humans do care about other people.  Especially, if those people need the natural medicine a doctor recommends.   Prohibiting out-of-state patients from access to medical marijuana in Florida would contradict the very principle the entire industry builds on.

What Issues Will The Lawmakers Face With Medical Marijuana Reciprocity?

However, a few issues may arise as to the method of implementing such an important provision into the law. Florida should take best practices from other states and leave out the unsuitable ones.  Below are the main five (5) issues needed to be addressed.

  1. Possess and Buy or Just Possess Medical Marijuana?

First of all, should reciprocity only recognize the medical marijuana cards from other states or also allow making purchases in the local dispensaries. Arizona took the path where reciprocity only decriminalizes possession of marijuana for medical purposes for out-of-state patients with cards. In a sense, such regulation encourages black market activities as patients must buy medicine somewhere but cannot do it legally.  Nevada and Michigan give an out-of-state patient access to the local dispensaries with certain limitations. No doubt, Florida should allow the medical marijuana reciprocity that will grant entry to the dispensaries along with decriminalization of possession.

  1. Nationwide or International?

Florida should make it clear whether reciprocity is nationwide or international.  For example, Washington DC allows purchases in the local dispensaries if a qualified patient “is a patient from another jurisdiction who possesses a valid medical marijuana card from that jurisdiction.” It is not clear whether another country is contemplated in this phrase.

Nevada has done a much better job defining this issue. The laws there specifically recognize nonresident medical marijuana cards. But most importantly, the laws define a nonresident card as “issued by another state or jurisdiction.” This makes it clearer that international patients visiting Nevada will be able to lawfully buy medical marijuana. Nevertheless, the words international or another country would make the meaning of the law completely unambiguous, if used.

The only wrinkle with having international medical marijuana reciprocity is a verification process. Florida needs to make sure that the medical marijuana identification cards are legitimate, unexpired, and issued for the purpose of treating medical conditions. Medical marijuana cards from other countries may be difficult to verify, as there is no unified system in the world where dispensaries can send a request. The language barrier can also be a problem. A medical marijuana card from Germany will likely be in German. International travelers will be able to abuse the system. Apostille certification can resolve this issue. Attesting affidavit to the validity of the card can be a way to go as well, just like in Nevada.

  1. What Is The Extent of Medical Marijuana Reciprocity?

Further, whether Florida should allow out-of-state patients use medical marijuana only for the qualified conditions outlined in the Florida law or even those that are not enumerated in Florida but allowed in other jurisdictions. For example, Florida will not allow a use of medical marijuana for a migraine as a separate condition.  Some other states have that condition on the list.  The question is: should a nonresident patient be allowed to buy medicine in Florida for a migraine or not. From the financial and compassionate standpoints, the answer is obviously yes. From a policymaking standpoint, the answer is no.   Rhode Island will not recognize medical marijuana cards issued for a condition other than those listed in the State’s law.  New Hampshire does not limit the reciprocity.  Florida should, of course, take into consideration many other qualifying debilitating symptoms other states provide for, just like Rhode Island.  Apparently, intractable pain is the most controversial condition.  It is expressly allowed in some states (Pennsylvania) and not explicitly allowed in Florida.  However, the condition may still qualify certain patients for the medicine even in Florida.

  1. Time Limitation.

Another issue to be pointed out is the time limitation on the access.  For how long will an out-of-state patient have access to medical marijuana in Florida after entering the state without obtaining a local card? There are a few options.  For example, Maine and Michigan set 30 days limit for visitors to access the local dispensaries.  Nevada, on the other hand, does not set out any limit.  In Florida, many visitors stay over 30 days.  Some of them may be in the State for as long as six months.

The trend in the states is at least 30 days.  Should Florida follow this limit, or have no limits, or pick a different limit like 90 days?  The answer to this question will depend on what kind of regulations Florida Department of Health will impose on the process of obtaining an identification card.  Should it be as fast as within a week, there will be no problem in setting lower limits.  Should it take 90 days (as of right now), maybe any kind of limits will be unreasonable.  In my opinion, the process of registering new patients should be fast and easy as in Nevada (48 hours).  In such case, the issue of time limitation will be moot.

  1. The Principle of Mutuality.

Lastly, should reciprocity be mutual or can it be unilateral to be valid. In other words, should a patient from New York (does not provide for reciprocity) and a patient from Hawaii (will have reciprocity in 2018) be treated the same way if Florida has medical marijuana reciprocity?  This problem should be treated the opposite way Florida treats other states’ bar licenses.  Although many states recognize Florida bar licenses with certain requirements satisfied, Florida does not recognize a single state’s bar license.  All out-of-state attorneys must take Florida bar exam in order to practice law on a regular basis.  In terms of legal licensing, the rule makes sense (decreasing competition among attorneys), however, when we talk about medical marijuana card from other states, mutual reciprocity is not something that should prohibit nonresident patients to purchase the medicine.  Be it New York or Hawaii, Florida should allow medical marijuana patients to have free access to medical marijuana.

Conclusion

At this point, no bills filed with the Senate in Florida do provide for medical marijuana reciprocity. Nevertheless, this issue is of a great importance for Floridians and State visitors and should be addressed in the final version of the bill that will pass.

Medical Marijuana in Florida: Everything You Did Not Dare to Ask

Medical Marijuana in Florida: Everything You Did Not Dare to Ask

Medical Marijuana in Florida: Everything You Did Not Dare to Ask.

 

On November 8, 2016, the Florida residents will decide whether Floridian Constitution will adopt the text of so-called Amendment 2. This amendment will allow the patients with qualifying medical conditions to have access to medical marijuana in the State of Florida.

 

What are the qualifying conditions under the Amendment 2?

 

There is a lot of anti-regulation propaganda that suggests that medical marijuana dispensaries will be on each corner after the regulations pass. This is not true. The main reason for that is the fact a patient should have “physician certification,” qualifying debilitating medical condition and a valid qualifying patient ID card. So what are those ailments that the State will qualify as debilitating? Here is the full list of them:

  • Cancer;
  • Epilepsy;
  • Glaucoma;
  • HIV;
  • AIDS;
  • Post-traumatic stress disorder (PTSD);
  • Amyotrophic lateral sclerosis (ALS);
  • Crohn’s disease;
  • Parkinson’s disease;
  • Multiple sclerosis; or
  • Other debilitating medical conditions of the same kind or class as or comparable to those enumerated, and for which a physician believes that the medical use of marijuana would likely outweigh the potential health risks for a patient.

 

That is it. Compare to almost 50 qualifying diseases in the upcoming ballot initiative to regulate medical marijuana in Arkansas. The last sentence in the list provides for other medical conditions that will qualify a patient for medical cannabis. The severity of such condition should be comparable to the ones listed above. Likely symptoms as severe and intractable pain, severe anxiety, deep depression, autism and like will be implied in this law. The doctors will be able to recommend (certify) the use of medical marijuana in such instances. As the experience of the past shows, the States’ legislature can (and usually do) add more ailments to the list, as necessity appears.

 

In order for a patient to be able to buy the medicine in the dispensary, she will have to get (in addition to other requirements mentioned above) a medical marijuana card from the government.  The registry of all Florida patients will be kept by the State.  Also, any business that enters the medical marijuana field will have to provide all the date about the business to the government.  That is called seed-to-sale system.  In other words, the government will know how many seeds were planted in the particular location, how much flowers by weight was harvested from those seeds, how much of that was ever transported and sold.  This is done via scanning code bars attached to seeds, plants, and then packages with flowers.  This way, the State ensures there are no criminal activities involved.  There will be serious fine for not compliaing with these regulations.  The most serious violations may cause the revokation of the license.

 

What is Going to Happen after Voting Floridians Pass the Amendment 2.

 

We hear a lot of rumors and whispers about when the legalization is going to be fully implemented in Florida. There can be no definite answer to this question; however, I forecast that early 2018 is a strong possibility. Let’s actually look at the text of the Amendment that we are going to vote for.

 

The Amendment provides for the duties of Health Department in subsection (d). The Department must no later than six (6) months after the effective date of the amendment promulgate (put the law in effect) the following regulations:

 

  1. Procedures for issuance of qualifying patients ID cards.
  2. Regulations for caregivers.
  3. Procedures for registration and licensure of MMTC.
  4. Regulations on supply of the product for the patients.

 

Now, a few question should arise in your mind: what is MMTC, when is the effective date of the amendment, and why did you underline #3? Let’s start in that order.

 

MMTC is medical marijuana treatment center “means an entity that acquires, cultivates, possesses, processes, transfers, transports, sells, distributes, dispenses, or administers marijuana, products containing marijuana, related supplies, or educational materials to qualifying patients or their caregivers and is registered by the Department.” In other words, any type of business that deals with medical marijuana.

 

All these businesses entities will have to first get medical marijuana licenses for their activity. It is still early to speak about how many types of licenses Florida will be issuing, but it is likely four (4) distinctive licenses will exist:

  • Dispensing (selling)
  • Cultivating (growing)
  • Processing (extracting and infusing products)
  • Testing labs.

Transporting license is also a possibility.

 

For example, California is going to have 17 types of licenses in 2018. Conversely, Pennsylvania will provide for 2 types of license (dispensing and growing/processing). Regardless of the type, the number of licenses will be limited in Florida. That fact alone means that the State will issue the licenses only to the best applicants based on the merits.

 

Now, let’s see which dates the new law will set to implement the regulations. The Amendment says that the Department should create regulations on licensing within six (6) months after the amendment goes into effect. The logical question is when does the law go into effect: at the referendum results release or some time after? To figure this out, let’s look into the Florida Constitution. Article XI Section 5 subsection (e) provides:

 

Unless otherwise specifically provided for elsewhere in this constitution, if the proposed amendment or revision is approved by vote of at least sixty percent of the electors voting on the measure, it shall be effective as an amendment to or revision of the constitution of the state on the first Tuesday after the first Monday in January following the election, or on such other date as may be specified in the amendment or revision.

 

The Amendment itself does not provide for the effective date. So we need to refer to the default constitutional language that says: on the first Tuesday after the first Monday in January following the election.   The language is quite confusing but we can deal with that. The first Monday of January falls on January 2. So the first Tuesday follows that date. That is January 3, 2017. That is the date when the amendment to the Florida constitution goes into effect.

 

Six months from that date the Health Department must establish the body of laws to regulate the industry. Thus July 3, 2017, is the time when all laws will be in place.

 

The Next Milestone in the Industry.

 

The text of the Amendment further provides: “The Department shall begin issuing qualifying patient and caregiver identification cards, and registering MMTCs no later than nine (9) months after the effective date of this section.” Boom!

 

Adding three months to July 3, 2017, gets us to October 3, 2017. That is the date when the Health Department must start issuing the medical marijuana cards, caregiver licenses, and, of course, licenses to the businesses.

 

When should I start preparing to invest into the Florida Medical Marijuana industry?

 

I would say it depends. However, my personal opinion is that anyone who is serious about this industry shall start preparing for it now. My company is the leader in Florida to deal with medical marijuana businesses where I personally control and participate in each step of application preparation. The team of over 10 people will work on your medical marijuana business project. The law firm guarantees the highest possible chance to obtain the license in Florida.

 

I will address the timing issues with more details in one of my next articles.

 

Feel free to contact me at ss@greenspectrumglobal.com or via phone at 954-361-1222.

 

 

Stanislav A Shamayev, Esq.

GreenSpectrum’s Medical Marijuana News Weekly #3

GreenSpectrum’s Medical Marijuana News Weekly #3

GreenSpectrum’s Medical Marijuana News Weekly #3.

Florida.  Another Legal Battle Over Medical Marijuana Is On.

 

Another lawsuit is heating over the limited licenses under the Compassionate Care Act of 2014 that allowed non-euphoric marijuana to be grown, processed and distributed. Five licenses were awarded in November of 2015. The sixth license was awarded later in 2016 after one of the applicants filed and won a successful lawsuit against the Department of Health (DOH) in the Southeastern region.

 

This time, the lawsuit is going one in the Central Florida. A panel of three members was allocating points for and then ranking the applications submitted by applicants. There were 7 candidates for a single license in the central region including McCrory’s Sunny Hill and Lake Mary-based Knox Nursery. Of the seven applicants in the Central region, a three-member panel gave McCrory’s an aggregate score of 5.5417, just a fraction below Knox, which received a score of 5.5458. The difference between two applications was 0,0041.

 

Administrative Law Judge Elizabeth MacArthur granted the DOH’s request that asked not to allow the evidence whether Knox posted $5 million bond and whether Knox delivered on what was promised in the application. The main argument McCrory brings up is that 2 out of 3-panel members chose his application over Knox’s.

 

Regardless of the outcome of this lawsuit, Knox will keep his license.

 

Marijuana-Infused Wine. 

 

In ancient China, marijuana wine was used to bring relief to people in pain. Nowadays, this so-called canna vine is making its come-back to the marketplace. A commercial marijuana-laced wine winery in California started producing marijuana-infused wine. As such, California is the only place where this wine can be purchased and only with medical marijuana card. Other states with regulations on marijuana disallow infusing alcohol with THC. Cali’s legislation is silent on that issue.

 

 

Marlboro Will Enter Marijuana Marketplace

 

The world’s largest cigarette producer announced that they would join the recreational marijuana bandwagon and begin the sale of marijuana cigarettes in the states where marijuana is legalized recreationally. The sales will start on May 1, 2017. The brand name for the marijuana cigarettes will be Marlboro M and will available in the marijuana dispensaries.

 

Only one pack can be bought at the time. The price will be starting $89 a pack. You must be 21 and older with a valid ID to buy.

 

 

Sun-Sentinel Endorses Yes on 2 Campaign

 

Sun-Sentinel has already endorsed Yes on 2 campaign in the past. The newspaper is distributed in Broward county and surroundings and has a large readers pool.   This time, the newspaper also provided the video of the debates between proponents and opponents of the medical marijuana legalization. As always, such social-political issues are very emotional.

 

As a side note, many other local newspapers endorsed Yes On 2 campaign including Tampa Bat Times.

 

UK Government Concedes that Medical Marijuana Has Medical Effect.

 

UK government’s Healthcare Department has found that CBD has a “restoring, correcting or modifying” effect on “physiological functions” when administered to humans.  This move was in response to the filed petition, earlier this year, to legalize medical marijuana.  This new evidence will likely spark the new businesses in the field of CBD after new laws are in effect.

Stanislav A Shamayev, Esq.

GreenSpectrum Weekly Mail #2

GreenSpectrum Weekly Mail #2

Cannabis Industry News.

Pets and Cannabis.

 

Who would think that medical marijuana helps our pets to fight their diseases?  In New York, Lisa Mastramico treats her 12-year old kitty from arthritis.  The cat used to hide in the closet, where the owner built a comfortable bed for the pet.  However, on learning that medical marijuana helps to give relief to humans with arthritis, Lisa decided to give some marijuana in an edible form to her cat.  The change was immediate, the cat is now taking her sunbaths, playing with the other cat.  She is hiding no more.

 

Pompano Beach, Florida, Maria Perez is treating her domesticated female skunk named Ricochet with hemp oil.  Ricochet limps and has cataracts.  She was refusing to eat.  However, after application of cannabis oil, Ricochet is back to her normal activities.  She is lively and happier.

 

There are many other documented events where pets got their relief from pain and other symptoms through medical cannabis.

 

Germany is on the move to Legalize.

 

Germany is currently the country where medical marijuana regulations are very tight and limited. For example, for the first six months of 2016, only 66 kilos of marijuana were legally sold to medical marijuana cardholders in the entire country. Compare to 3 tons of pot sold in Oregon alone in July of 2016.   All the medical marijuana sold was imported from Holland.

 

Now, however, Germany is going to create its own regulated industry, where cannabis is going to be grown locally. The patients will be allowed to grow their own medicine in some cases.

 

Currently, there are 647 patients in the entire country. That number is expected to grow drastically after the new laws are in place.  Germany will be hosting the largest cannabis expo in Europe in June of 2017.

 

Arizona Shows All Signs of the Snowballing Marijuana Industry.

 

Out of the 747 applications submitted for the lucrative licenses in Arizona, only 31 were awarded.  Each applicant had to file $5,000 fee, the large part of each, $4,000, was non-refundable.  Arizona has had medical marijuana program for a few years with around 100,000 patients. In November, the residents of the state will be voting whether to legalize adult use of marijuana.  The latest polls show 50% support for the initiative.  In Arizona, 50% will be enough to pass the constitutional amendment.

 

Stanislav A Shamayev. Esq – cannabis attorney.

Floridians Support Medical Marijuana Regulations

Floridians Support Medical Marijuana Regulations

Floridians Support Medical Marijuana Regulations.

Floridians support medical marijuana regulations overwhelmingly.  The ballot initiative is commonly known as Amendment 2 and placed on the November ballot. In 2014, a similar initiative was proposed to the Florida voters. It narrowly failed. This time around, the Amendment 2 language has been changed to address the criticism coming from the opposition.

 

UNF’s Public Opinion Research Laboratory just released the poll of the public opinions on the ballot questions. About 77% of likely Florida voters will vote for the amendment, whereas only 18% said they would vote against it. Interestingly enough, even over 60% of republican voters will give the support for the amendment. The age of the supporters also shows how the attitude changed with the older population. 72% of supporters were above 45 years old.

 

We also see the stance reversal of some local newspapers. Jacksonville’s Florida Times-Union, the Fort Myers News-Press, and the Panama City News Herald expressed their endorsement of the amendment. The Florida Supreme Court approved the language of the amendment 7-0, while last time it was 4-3. No briefs opposing the amendment was filed this time, while over 200 pages of briefs were submitted in 2014. The State Attorney General remained silent this year, whereas last time she was strongly against it. All these factors serve the proof that this time, Floridians support medical marijuana regulations and will pass the amendment with flying colors.

Stanislav A Shamayev, Esq. – medical cannabis attorney.

Vintage Posters of Marijuana Demonization

Vintage Posters of Marijuana Demonization

Vintage Posters of Marijuana Demonization.

Back in the 1930s, 40s, and 50s, there were a lot of parties interested in the criminalization of any form of cannabis, medical marijuana and hemp.   Pharmaceutical companies, paper production companies, nylon production companies, alcohol and tobacco companies, and many others lobbied the government hard to keep the profits high and downgrade the new industry.   A lot of money has been invested into posters that were disseminated in the society.  Below are some of these posters that demonized cannabis.

Marijuana demonization

Marijuana demonization

Marijuana demonization Marijuana demonization Marijuana demonization Marijuana demonization Marijuana demonization Marijuana demonization Marijuana demonization Marijuana demonization Marijuana demonization Marijuana demonization Marijuana demonization

The campaign was successful, as in 1937 the Government heavily regulated the industry through Marihuana Tax Act and then through Controlled Substance Act in 1970.  Nowadays we see the opposite movement.  The medical marijuana industry is the fastest growing segment of the economy with 30% annual growth.

Thanks to this resource for the pictures.

Stanislav A Shamayev, Esq – medical cannabis lawyer in Florida.

Opposition to Medical Marijuana In Florida

Opposition to Medical Marijuana In Florida

It Is Time To Face Those Who Oppose Medical Marijuana In Florida.

Opposition to Medical marijuana in Florida is doing everything possible and impossible to manipulate the outcome of the vote.  Florida is going to vote on Amendment 2 on November 8, 2016. This amendment will allow patients with debilitating conditions to access natural medicine to relief the from pain, cure their diseases, and increase the quality of life. With over 70% support for the passage of the amendment, there is still a strong opposition to such changes.

 

The opposition consists of some Florida organizations and associations. The following are the main arguments these groups are making against regulation of medical cannabis in Florida.   I will comment on each one of them.

 

  • Florida already has multiple laws providing legal marijuana to children and adults in medical crisis including the Right to Try Act and the Compassionate Medical Cannabis Act.

Stanislav: this statement is correct. However, the conditions for which medical marijuana can be recommended is extremely limited even with these laws in place. They are cancer, chronic muscle spasms, and epilepsy. Terminally ill patients also can have access to the medicine during their last year of life. However, the new regulations will bring the so-needed natural relief to many other Floridians with debilitating conditions. For example, veterans with PTSD can significantly increase their life quality treating the syndrome with certified high-quality medical marijuana. The opponents’ argument is in favor of legalization.

 

  • Amendment 2 is promoted by four billionaires who have pushed similar measures in other states.

Stanislav: this is not quite so, as the majority of donations are local. However, even if true, this argument misses the point. The industry will make a lot of money – yes, but it will allow patients to get their relief and cure through the natural medicine. The patients are the ones for who the industry will be created. Moreover, the opposition failed to mention that anti-regulation campaign is sponsored by businesses involved in the pharmaceutical drugs production.

 

  • “Medical” marijuana has no quality controls, medical standardization, or dosage requirements.

Stanislav: this is an outright lie or at the minimum misleading statement. If there is no industry, there is no need for all of that. However, once the amendment passes, the Department of Health will promulgate the laws that will regulate quality control, medical standardization, and dosage requirements. This is a normal practice of States that regulate their medical marijuana market. Florida will be no exception.

 

  • Anyone with a “debilitating illness” can obtain a cannabis certification, which could translate to a migraine or trouble sleeping.

Stanislav: this statement is misleading. Not anyone with a debilitating illness, but rather a patient with qualifying diseases from the list provided in the amendment or a patient with debilitating conditions similar in the magnitude to those listed. The language of the amendment was changed and tied up to fight this particular argument. Opponents try to mislead the public with such statements.

 

  • The amendment puts children at risk by allowing the sale of high concentrate edibles (up to 80-90 percent THC) and NOT requiring child-proof packaging or any marketing/advertising restrictions to prevent accidental ingestion.

Stanislav: this statement is just beyond all notion of decency. First of all, we do not even know if Florida will allow edibles. Second, there are no states with marijuana regulations that did not address that problem. Not only the regulations on packaging and labeling will be in place but they will be extremely tough as well. We do not want our kids to have access to the drug.

 

  • “Medical” marijuana states have increased drugged driving mortalities; increased ER visits for people ingesting cannabis and increased teen marijuana usage.

Stanislav: this not true. There is only one documented case when a person died of the marijuana overdose. However, that person had other drugs and high concentration of alcohol in his system. ER visits and increased teen usage are just not supported by data. The opponents do not quote any official statistics.

 

  • 2,000 dispensaries are expected to open in Florida and the amendment provides no zoning limitations on dispensary location within a community.

Stanislav: this lie is outrageous. First, no one can know how many dispensaries will open until the regulations are drafted. Second, the opponents probably refer to the data offered by Department of Health based on “the Colorado experience.”  The differences between the States is significant.   There is another estimate provided by the Department outlining about 1,700 licenses issued.  There will likely be around 5 types of licenses and dispensing licenses will be a part of the industry.

 

CONCLUSIONS

 

  • The problems that plagued the medical marijuana amendment in 2014 have not been addressed, leaving too many existing loopholes for voters to even consider voting yes on Amendment 2.

Stanislav: the opposition could not provide any sound statements to make a solid argument to oppose the coming medical marijuana industry. The arguments they are making are misleading or lies.  As any argument the opposition makes has no grounds under it, I tend to think that some other interests are involved.  Most likely, those interests are of the financial nature.  Vote YES on 2 to bring the relief to Floridians and contradict big pharmas financial interests.

 

Stanislav A Shamayev, Esq. – legal marijuana lawyer Miami.

 

Oregon Collects $33 Million on Adult Use Marijuana

Oregon Collects $33 Million on Adult Use Marijuana

Oregon Legal Marijuana Industry.

Oregon legal marijuana industry has been developing past 50 years gradually.  Oregon has always been open to the notion of medical marijuana. In 1973, it was the first state to decriminalize possession of marijuana. In 1998, Oregon regulated medical marijuana industry. In 2014, the Oregonians voted yes on adult use marijuana sales, and the program launched on July 1, 2015. Since over a year passed from the beginning of recreational marijuana sales, it is time to make a summary of what is going on in that state.

 

There are about 380 marijuana dispensaries in the state. Only people over 21 are allowed to purchase marijuana in the retail stores.   Oregon offers tax-free shopping for medical marijuana cardholders in any dispensary. The regulations impose serious testing requirements to ensure lack of pesticides.

 

In June alone over 3 tons of marijuana went through the legal market in Oregon. The state now taxes recreational marijuana sales at the level of 17% as opposed to 25% earlier. For the period from January to July of 2016, the State collected $33.5 million in taxes. The estimated sales of recreational marijuana are $134 million for the same period. Colorado and Washington sold $700 and $260 million worth of marijuana in 2014 respectively.

 

Oregon created over 2,000 jobs since the beginning of the regulated industry. There are over 1,400 licenses pending in the Oregon Liquor Control Commission (the agency in charge of licensure of marijuana businesses). Many of these applications are requests to add adult marijuana to medical marijuana sales.

 

Oregon is one the five jurisdictions in the US that allowed sales of marijuana to anyone over 21 years old. All states that regulated adult sales of marijuana have collected millions in taxes, created many jobs, developed infrastructure, reduced law enforcement expenses, and got many other benefits.

 

Stanislav A Shamayev, Esq – cannabis lawyer in Florida.

South Beach Will Allow Medical Marijuana Dispensaries

South Beach Will Allow Medical Marijuana Dispensaries

South Beach Will be Medical Marijuana-Friendly Municipality.

     South Beach medical marijuana dispensary is a reality.  There are only 5 weeks left until the referendum where Floridians will be deciding whether medical marijuana will be allowed in the State for the patients with qualifying debilitating symptoms like cancer, PTSD, epilepsy, Parkinson, and others.   In the light of this event, counties and municipalities start timely adopting ordinances that will regulate the location, amount, and other requirements for medical marijuana businesses and dispensaries in particular.


     South Beach city commission is among many to consider this issue.  Commissioners started placing the issue of the medical marijuana ordinance on the meetings’ agenda in February of 2016.  This has been dragging since then being postponed for the future meetings.  But time has come and finally we see the signs of what can be called the future zoning for South Beach medical marijuana dispensary.   On September 2, 2016, the city manager, Jimmy Morales, wrote a letter addressed to the city mayor and city commission titled “Ocean Drive Proposals.”


     In the letter, on page 10 subpart 10, the city manager writes the following “With regard to medical marijuana, if that becomes legal in Miami Beach, medical marijuana dispensaries will be banned in properties fronting Ocean Drive as well as any properties that front a street perpendicular to Ocean Drive west to Collins Avenue.”  In other words, there will be no dispensaries east from Collins Ave.  However, it looks like the city will be fine with medical marijuana dispensaries west off Collins.


    GreenSpectrum continues to track medical marijuana laws and regulations in Florida.


Stanislav A Shamayev, ESQ – medical marijuana business attorney.

 

Courts, Guns, and Medical Marijuana

Courts, Guns, and Medical Marijuana

The Federal Appellate Court Makes You Choose Between MMJ and Your 2nd Amendment Right.

    Medical marijuana laws are subject to a State legislation.  Nevertheless, the federal government continues to interfere with State’s legal activities using the Substance Control Act.  In August of 2016, the federal court of appeal in the ninth circuit made a holding in a lawsuit that a resident of Nevada filed in 2011.  The issue in the case was the ban on buying weapons and ammunition the federal government imposed on the holders of medical marijuana cards in the legal marijuana states.  In short, once a patient obtains a medical marijuana card, she is banned from buying weapons and ammo.

 

     The Plaintiff sued the government after she was not able to buy a gun.  She argued that the ban violated the second amendment to the US constitution, the right to bear arms.  The trial and appellate courts rejected this argument.  The federal appellate court noted that medical marijuana “raises the risk of irrational or unpredictable behavior with which gun use should not be associated.” On another note, the judge stated that medical marijuana patients are likely “to experience altered or impaired mental states that affect their judgment and that can lead to irrational or unpredictable behavior.”

 

    Said differently, medical marijuana cancer patients who use the alternative medicine to alleviate their intolerable pain caused by their ailment are not given the same right as those who drink alcohol.  Nevertheless, I understand that the court acted under the black letter of the law.  More specifically, the Controlled Substance Act of 1970 controlled the issue at dispute by a simple fact that marijuana is considered Schedule 1 drug.  Also, in 2011 ATF issued the letter commanding to impose the ban on buying weapons and ammunition for medical marijuana cardholders.   The Court relied on both of these authorities in its holding. The decision the Court issued now controls the federal trial courts in nine States in the Western US.

 

    Nevertheless, this opinion is rather in favor of the legal cannabis supporters than not, and I will explain why.  The federal judge did not simply uphold the ban, he also provided his own take on it.  The Judge explained how medical marijuana cardholders can still possess guns even with the ban in place.  The Judge advised that the cardholders have two options.  First, they may get a gun and ammo before they obtain the card because the law does not ban the weapon possession.  Second, in case a patient has acquired the card, she should cancel the card, buy the gun, and then obtain the card again.

 

This case shows the change in the attitude of the American society.

 

Stanislav A Shamayev, ESQ – medical marijuana attorney.

GreenSpectrum Weekly Mail #1

GreenSpectrum Weekly Mail #1

Florida Medical Marijuana Battle. 

 

     Florida medical marijuana battle over the initiative is heating up.   New Approach, a political committee, has contributed $1 million to the Florida pro-regulation group, United for Care. The committee also supported the medical marijuana proposals in Washington, Oregon, and Massachusetts.   United for Care promised to spread the message across Florida so “that Floridians understand this is about putting medical decisions back in the hands of doctors and patients and out of the hands of politicians.”

 

So far, latest polls show overwhelming support of Amendment 2 among Floridians.

 

Illinois Medical Marijuana Program is On Fire

 

     A legal battle over its medical marijuana program continues in Illinois. The result of the last legislature session was the addition of PTSD and terminal illnesses to the debilitating conditions list. Nevertheless, over the course of past months, 7 lawsuits were filed in Cook County. Plaintiffs were demanding to reverse the program’s director rejection of their debilitating conditions. Three judges already resolved 3 complaints and directed the Department of Health to include PTSD (was added), irritable bowel syndrome, migraines, and chronic post-operative pain to the list of the qualifying diseases of Illinois medical marijuana program.

 

The Department has challenged all judicial decisions.

 

Federal Government Continues to Resisit Medical Marijuana.

 

      Congress squashed an attempt to allow US veterans accessing medical marijuana in the states where it is legal.   Congress passed the spending bill last week with no such provision included. The proposed Bill would allow Department of Veteran Affairs’ (DVA) doctors to recommend medical cannabis to US veterans as treatment of PTSD, pain, and other conditions related to army service.

 

November Ballot: Marijuana Initiatives.

 

      Ten states this voting season will be making their choices of local marijuana legislation. Five states will be deciding whether  to allow the adult (recreational) use of marijuana. They are California, Maine, Arizona, Massachusetts, and Nevada.   Florida, North Dakota, Arkansas, Montana, and Oklahoma will vote on medical marijuana laws. Some states are more likely to pass their marijuana legislation than others.

 

     California is the sixth economy in the world. This year the polls show over 60% support of the adult use legalization in the State. The legal sales of marijuana will be taxed at 15%. This measure is expected to bring over $1 billion in annual tax.  $200 million out of this total will be spent on law enforcement.

 

     Maine adult use legalization will allow anyone over 21 years old to possess 2.5 ounces of marijuana for personal use.  The 10% tax is imposed on the marijuana sales.  Thirty (30) million tax dollars will go towards school construction. Another $30 million will go to the state’s general fund. According to the latest poll, about 55% of residents support the measure.

 

     Florida is also likely to pass the medical marijuana measure commonly known as Amendment 2.  Although narrowly failing the last ballot cycle, this time around, the polls show a strong support of Floridians to have the amendment passed.  Since January of 2015, the average number support was around 60%.  The last polls showed 70% support for the measure.

 

Oklahoma Paves the Way for Medical Marijuana.

 

     Oklahoma joined the other nine (9) states to decide on November 8, 2016, whether Oklahoman patients will be able to access medical marijuana provided there is a qualifying debilitating condition. After a few months of back and forth, the medical marijuana initiative was placed on the November ballot.   Legally, 66,000 signatures were needed to allow an amendment to the state constitution to be allowed on a ballot.  Over 67,000 were collected and after certain procedural steps were taken and no one challenged the signatures count, the initiative is going to a vote of people.

Stanislav A Shamayev, ESQ – medical marijuana business lawyer.

Medical Marijuana in Miami-Dade Will Bring Big Business

Medical Marijuana in Miami-Dade Will Bring Big Business

Medical Marijuana in Miami-Dade will bring Big Business.

    Medical Marijuana in Miami-Dade is potentially worth $132 million. On May 6, 2014, the board of county commissioners adopted a resolution commanding Miami-Dade County to produce the report with analysis of medical marijuana (MMJ) market impact on Miami-Dade and South Florida. Such request was in response to the possibility that the medical marijuana businesses would come to Florida. After two years of research, the County released the report in the beginning of August of 2016.

 

What Data the Report Provided?

 

     The report points out that the medical cannabis market is very restrictive before the Floridians vote on the referendum on November 8, 2016. There is no insurance coverage and a low number of doctors with proper certification. Under the Compassionate Care Act and Right to Try Act, about 307,000 Florida patients qualify for medical marijuana (low THC, high CBD). The conditions under the current laws that allow medical marijuana in Miami-Dade are cancer, chronic muscle spasms, and epilepsy. Also, terminally ill patients have access to the medicine.

 

     About 42,000 (13%) of those patients reside in Miami-Dade County and about 100,000 (30%) reside in the Southeast region. The government projects the medical marijuana industry’s worth $785 million annually under the current laws. The report estimates$3,000 a year an average patient will spend on medical marijuana in Miami-Dade . The Miami-Dade’s market is worth $132 million according to the report. In South Florida, the financial impact of the industry is about $300 million annually.

 

     Further, the report addresses employment. The industry will create 102 construction related jobs with the payroll of $2.24 million over the period of construction. The County anticipates 125 direct and 75 secondary jobs. These jobs will produce $11.15 million a year in pays. The authors conclude that the total financial impact on Miami-Dade County will be $61.9 million and the number will grow to $62.8 million by 2025.

 

Stanislav A Shamayev’s Analysis of the Report.

 

     In short, the government says “YES” to the medical marijuana industry in Florida. Miami-Dade will be a cannabis friendly county. Miami-Dade was the first county to decriminalize cannabis possession below 20 grams. Let’s see what government missed in the report.

 

     First, the numbers in the report do not take into account Amendment 2 initiative placed on the November ballot. As of today, Amendment 2 has 70% support. I have no doubt the amendment will pass. The new regulations will bring a number of additional medical conditions that will qualify patients for medical marijuana. The number of the patients will grow to at least 700,000. That is twice as much the number of the patients under the current legislation. Under new laws, Miami-Dade County will have about 100,000 potential patients. South Florida will have about 230,000 potential patients.

 

     Further, the statistics from other medical marijuana states (for example Illinois) show that on average a medical marijuana patient spends about $300 a month on the alternative medicine. Multiplied by 12, this becomes $3,600 annually for each patient to spend. As such, the potential sales in the Florida medical marijuana industry will be around $2.5 billion.  Miami-Dade will get a big chunk of it, $360 million.

 

     It is hard to say how many patients will consume medical marijuana after the referendum passes. The report does not show how the “realistic” number $61.9 million annual financial impact in Miami-Dade County was derived. Provided, the government released the proper number, we can use for further calculations.  If we subtract the numbers provided above (construction, wages) from it, we arrive at $48.51 million in sales of medical marijuana in Miami-Dade. This number represents 36.75% of the projected net worth of the industry ($132 million) in Miami-Dade County. So the government projects that 1/3 of the potential patients will be consuming medical marijuana.

 

     Applying these numbers to the new regulations, the realistic sales of medical marijuana in Miami-Dade county are $120 million a year after the referendum.  The legal, business, construction, consultancy and accounting services may easily add another $10 million making it $130 million industry annually just for Miami-Dade County.

 

The Government Mentioned Reciprocity?

 

      The government has not considered the possibility of adding reciprocity to the new regulations. Medical marijuana reciprocity is a legal concept that allows patients with medical marijuana cards from other legal cannabis states to access medicine in Florida.

 

     If lawmakers provide for reciprocity, the industry’s worth of $130 million will not be final.  Reciprocity will allow snowbirds and tourists to buy medical marijuana in Florida. It is difficult to predict the correct numbers for such sales. In 2015, about 100 million tourists visited Florida.  Many of them were from Canada where medical marijuana is legal.  Others are from the American States where medical marijuana is legal as well (Michigan, Illinois, Massachusetts, New York and others). For example, if only 3% of the tourists and snowbirds had valid medical marijuana cards, that could add another 3 million potential patients annually. That number alone can potentially bring $1 billion in sales in Florida.

 

Conclusion.

 

      Overall, the report provides great data for the investors and entrepreneurs to rely on. The government projected $1 million growth to the industry by 2025 for Miami-Dade. This number does not reflect the exponential growth of the industry in other legal cannabis states. By the year 2025, Florida will be the second largest market for medical marijuana market after California. Florida alone will likely produce $2-3 billion in sales of medical marijuana by that time. Miami-Dade and the Southeastern region will have a big chunk of this number.

 

   GreenSpectrum is fully prepared to provide legal and business advice to the entrepreneurs and investors.  The Firm will take care of all legal and business needs of the medical marijuana projects.  Please contact the Firm to get more information.

Stanislav A Shamayev, ESQ – medical marijuana attorney.

Michigan Medical Marijuana Regulations

Michigan Medical Marijuana Regulations

Michigan Medical Marijuana Regulations Analysis. 

     Michigan medical marijuana regulations are finally released.  The State just made a serious leap for the medical marijuana industry, when Michigan’s Governor, Rick Snyder, signed a few marijuana bills into law.  Here is the most important information.

Medical Marijuana Facilities Act.

     Michigan medical marijuana regulations are promulgated in this Act.  The Act creates the medical marijuana licensing board that consists of 5 members who are residents of Michigan, not more than 3 of whom are members of the same political party. The term of service is 4 years. The Act further provides for heavy restrictions on who can and cannot be a board member.

The Board will be able:

  • To grant or deny applications for medical marijuana businesses.
  • To hold public meetings;
  • To implement and collect fees, taxes, regulatory assessments;
  • To inspect and audit the medical marijuana businesses;
  • To investigate all individuals employed by marijuana facilities;
  • To investigate violations.

Types of Medical Marijuana Licenses.

Michigan will provide for the following types of licenses: 1) A, B, C grower; 2) processor; 3) provisioning center; 4) secure transporter; 5) safety compliance facility.  More information on these licenses:

  • A grower with A type growing license can grow up to 500 plants, B type up to 1,000, C type up to 1,500. A grower license owner can sell only to processor or dispensary. All marijuana movements are subject to secure transporter.
  • A processor license authorizes: purchase of marijuana from a grower, process and infuse products, and sell marijuana or marijuana-infused products to a dispensary.
  • A secure transport license allows to store and transport marijuana and money between the marijuana businesses. The secure transport license does not allow delivery of marijuana to patients. A license owner cannot have an interest in any other medical marijuana business and cannot be a registered patient.
  • A provisioning center license (dispensary) allows to buy marijuana from a grower or processor and sell to patients and caregivers. It also allows transporting marijuana in and from safety compliance facility (testing lab). A license owner cannot have an interest in testing or transporting medical marijuana businesses.
  • A safety compliance facility license allows testing and transportation of medical marijuana. This license owner cannot have an interest in any other medical marijuana.

 

      The Act also provides for 3% tax on dispensary’s sales and tax incentives for counties and municipalities to allow medical marijuana businesses.

 

The general licensing requirements:

  • Numerous financial and ownership disclosures.
  • Application fee;
  • 2-year residency requirement;
  • No criminal records;
  • The sources and total amount of capitalization of the business;
  • No bankruptcy for past 7 years;
  • License term – 1 year;
  • Can be purchased, sold or transferred with the board approval;
  • Liability insurance for body injury of at least $100,000;
  • The license is revocable and is not right but a privilege.

Seed-to-Sale Medical Marijuana Tracking System.

The Act seeks

  • to establish a statewide monitoring system to track medical marijuana (MMJ) in commercial trade;
  • to monitor MMJ businesses compliance with laws;
  • to control the quality of MMJ;
  • to require MMJ businesses certain financial and ownership information;
  • to assist in drafting the laws.

 

The Governor also signed the bill that regulates production and sale of non-smokable forms of cannabis like brownies and candies, and oils.

 

Overall, Michigan did a great job outlining the future regulations for the regulated medical marijuana industry.

Stanislav A Shamayev, ESQ – medical marijauna lawyer.
The Dawn of Marihuana Tax Act of 1937

The Dawn of Marihuana Tax Act of 1937

Medical Marijuana and Taxes.  Historical Note.

Medical marijuana and taxes on it have had a long relationship.  Today, all legal marijuana businesses face problems with paying and deducting taxes.  However, it was not so in the past.  In 1937, Marihuana Tax Act was enacted in the US Congress. This happened as a result of the nylon and paper production lobby. The main purpose of the act was new taxation schedule of the cannabis industry including the medical marijuana and hemp. At that time the US had the fully blown cannabis industry with doctors, producers, manufacturers, importers trading, selling, and paying taxes on cannabis.  Two main categories were involved in the Act: marijuana transfers and occupational taxes of marijuana businesses. The Act also provided for the punishment of the violations of its provisions. The offender could get up to $2,000 (worth about $33,000 in 2016) fine, or 5 years in prison, or in some cases fine and prison time. The unusual result of this act was that under its provisions even a corner dealer had to pay taxes on the sales of marijuana.

 On December 20, 1965, Dr. Timothy Leary took his family Mexico. On their way back home, the car was pulled over by the US customs agents for inspection. The search of the car was conducted, and small amounts of marijuana were found in their possession. Leary was arrested and taken to the booking station.

The prosecution indicted on and charged him with three counts under the Marihuana Act. After the lengthy trial, the jury members found him guilty on two counts. The District judge at his discretion sentenced him to 5 years term in prison. The sentence was appealed but the appellate court left the sentence untouched. Leary asked the US Supreme Court to review the sentence. This is how Leary vs. US, 89 S.Ct. 1532 was born. This case changed the structure of the entire regulated cannabis in the US.

Leary had a few arguments to deliver, but the main one was revolving around the Fifth Amendment right against self-incrimination. Leary argued that the Act violated this right. Interesting enough that the Congress was imposing taxes on many illicit activities such as illegal weapons possession, wagering, or proceeds from wagering. For the Congress it would not matter the nature of business – taxes must be paid.

The process of taxation under the Marihuana Tax Act was as follows. A written order was the main vehicle in the act to conduct transfers with and pay taxes on marijuana. The government would issue such orders on the request. A requesting person had to include his name and address on the form. On the other end, a person receiving the product of the transfer had to get a written order as well. As such, the requester and receiver had to obtain the written orders and pay taxes on the transfer. Under the provisions of the Act, even without obtaining the written order—which would be illegal—either side had to pay taxes on the transfer. So, should one obtain marijuana legally or illegally, he had to pay taxes providing the name and address on the form. Then IRS would receive this information and law enforcement agencies would be able to access the records.

As such of these provisions, the government had no problem with an illegal transaction in marijuana as long as taxes were paid. However, the system the government set was biased to the extent that the “illegal” taxpayers could be arrested for the illegally obtaining marijuana.

Leary’s argument based on the absurd results the Act allowed was a winner. The US Supreme Court reversed Leary’s sentence and repealed the Marihuana Tax Act. The Congress acted fast. It enacted the Controlled Substance Act in 1970. The Congress placed marijuana in Schedule 1, the category where the drugs do not have any medicinal effects. Other drugs in the category were LSD, Heroin, and ecstasy. Up until this moment, the federal government keeps marijuana in Schedule 1 despite numerous studies and documents proving otherwise.

Stanislav A Shamayev, ESQ

 

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