The Florida Supreme Court has upheld Florida’s regulations for medical marijuana dispensaries that benefit select companies while erecting hurdles for smaller enterprises.
The court rejected arguments that the regulations violated the intent of voters who OK’d a 2016 constitutional amendment that would have allowed a wider range of companies to compete.
In an unsigned opinion delivered Thursday, the court ruled unanimously that the Florida Legislature was within its authority to impose “vertical integration” on the medical marijuana market — that is, requiring providers to “cultivate, process, transport, and dispense” the product.
Florida Agriculture Commissioner Nikki Fried denounced the ruling, saying in a written statement: “Florida’s medical marijuana industry will remain closed-off, restricting freedom of opportunity, weakening the free market, and leading to ever-higher prices for patients.”
Justice Alan Lawson agreed with his six colleagues regarding vertical integration, but insisted the Legislature had improperly designed the regulatory framework to benefit specific companies. The Florida Constitution, he said, forbids such “special laws.”
“The provisions in question … grant certain private corporations — described so precisely that they might as well be named in the statute — the right to … licensure without entering the competition that others must enter for a statutorily capped number of licenses,” Lawson wrote.
“This ruling by our Republican-dominated Supreme Court further entrenches Florida’s unfair, unconstitutional medical marijuana system put in place by our Republican-dominated Legislature,” said Fried, a former medical marijuana lobbyist and the sole Democrat on the Florida Cabinet.
“This status quo helps absolutely no one except the 22 medical marijuana companies in Florida at the expense of patients,” she said. “If we’re applying the law to medical marijuana, then it’s past time to grant the licenses that Black farmers and our citrus industry deserve and the law requires.”
The law reserves a license for Black farmers in light of the history of discrimination against them and another license for a planned conversion of a citrus processing facility.
Katherine Giddings, deputy chair of the litigation practice group at Akerman’s Tallahassee office, who represents Florigrown, declined to comment. “Obviously we are disappointed in the opinion but we are currently evaluating our options,” she said via email.
Earlier, a trial judge and the intermediate First District Court of Appeal had sided with Florigrown, a Tampa company seeking entry to the market. A number of other aspiring dispensaries filed amicus briefs supporting Florigrown. The Florida Department of Health defended the system.
Among the arguments was that the constitutional amendment defined medical marijuana centers as entities that grow, process, OR dispense marijuana, but that the Legislature required them to do all three.
Another was that the Legislature designed the market so narrowly that it covered only five companies. For example, as the Phoenix reported in 2019, they needed to post a $60,000 nonrefundable application fee, prove they could grow at least 400,000 plants, and to have been operating for at least 30 years — established plant nurseries, for example.
However, the high court said, the amendment allowed the Legislature to “enact laws consistent with” its language.
“Because the amendment nowhere says that any entity that performs one of the listed functions is entitled to registration or licensure, the statute’s requirement that an entity perform several of those functions to be licensed does not conflict with the amendment,” the opinion says.
As for the special treatment argument, the court declared that it was reasonable for the Legislature to limit initial licenses to companies likely to meet initial demand and noted that the law allows expansion of the number of dispensaries as the market grows.
The court wasn’t moved by Florigrown’s argument that some license holders never produced medical marijuana product but instead sold their licenses for tens of millions of dollars.
Lawson insisted the majority was changing the court’s own precedents regarding “special laws” benefiting discrete interests, but without saying so openly.