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.

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