Ruling Rejects Limits On Medical Marijuana Businesses

8 minutes ago
Originally published on August 7, 2018 7:00 am

In a ruling that could have a revolutionary impact if it stands, a Tallahassee judge has found a law limiting the number of medical marijuana operators in Florida runs afoul of a constitutional amendment approved by voters two years ago.

The cap on the number of “medical marijuana treatment centers,” as they are known in Florida law, “directly contradicts the amendment,” Leon County Circuit Judge Charles Dodson ruled in an eight-page order last week.

“Such limits directly undermine the clear intent of the amendment, which by its language seeks to prevent arbitrary restriction on the number of MMTCs authorized to conduct business in the state. The amendment mandates the availability and safe use of medical marijuana by qualifying patients,” Dodson wrote.

Dodson also ruled that the 2017 law is unconstitutional because it requires marijuana operators licensed by the state to cultivate, process, and dispense medical marijuana --- something known as “vertical integration” --- as opposed to breaking the activities into separate parts for licensure.

And the judge decided that the law --- aimed at implementing the 2016 constitutional amendment, which broadly legalized medical marijuana --- improperly restricted who could get licenses. The law ordered health officials to grant licenses to operators who were already up and running in Florida or who were involved in litigation as of Jan. 1, 2017. The law also required licenses for a black farmer who meets certain conditions and set aside a preference for an applicant with certain ties to the citrus industry.

That provision amounted to what is known as a “special” law, Dodson ruled in the order issued Thursday. The judge found the 2017 law restricts the rights granted under the Constitution and that plaintiff Florigrown LLC “has a substantial likelihood of success” in its claim that the law conflicts with the amendment.

But, despite multiple findings that the 2017 law is unconstitutional, Dodson refused to grant an injunction requested by Florigrown, a company partly owned by Tampa strip club operator Joe Redner, who also recently won a separate marijuana-related legal challenge. Leon County Circuit Judge Karen Gievers ruled that Redner should be able to grow his own marijuana for “juicing” purposes to prevent a recurrence of lung cancer. The state is appealing her decision.

Dodson’s decision not to issue an injunction means Florida health officials can continue to move forward with an embattled process to grant a handful of licenses in addition to the 14 already bestowed in the state’s highly competitive marijuana industry, which some estimates project will generate $2.5 billion in revenue in less than a decade.

“The denial of the request for temporary injunction will allow the department to continue to work to implement the law so Floridians can have safe access to this medicine,” Florida Department of Health spokesman Brad Dalton said in an email.  

But the judge’s ruling could pave the way for an unlimited number of marijuana purveyors in a state where one license recently was sold as part of a $93 million deal that included an unnamed “health care organization” and another was acquired in a $53 million takeover by California-based Med Men.

“It’s the first time any judge has weighed in on the licensing process at all, and what he said was unequivocal. … What he’s saying, and I think this is super clear, is what you’re doing is unconstitutional,” Florigrown CEO Adam Eland told The News Service of Florida in a telephone interview Monday.

But Eland acknowledged that the judge’s ruling might have no immediate impact on Florigrown.

“This court understands the importance of both the Legislature and the department in developing a thorough, effective, and efficient framework within which to regulate medical marijuana, as directed by the amendment. Florigrown has established that the Legislature and the department have such a framework and are implementing it, currently, with other registrants. They have simply chosen to restrict access to this framework in a manner that violates the amendment,” Dodson wrote.

Dodson found Florigrown “will not suffer irreparable harm” in the absence of an injunction but will still “have the ability to apply and compete for one of the remaining available” licenses.

“The requested injunction at this time would substantially alter the status quo by halting the department’s existing process and procedures for the issuance of MMTC licenses as well as the rulemaking currently underway to initiate the application process,” he wrote.

While Dodson did not issue an injunction, the judge set an Oct. 3 deadline for health officials and/or the Legislature to resolve the deficiencies with the law. Oct. 3 will mark one year after a deadline imposed by the constitutional amendment for health officials to begin issuing identification cards to patients who qualify for the medical marijuana treatment.

“He’s giving them that time because he feels it’s not irreparable yet. They have an opportunity to repair it,” Eland said, adding that Florigrown is trying to reach a settlement with health officials.

But it’s highly unlikely Florida legislators will meet in a special session to address the marijuana law prior to the Nov. 6 general election and almost equally uncertain that health officials will make a significant policy reversal without the blessing of the Legislature.

“This looks like a big deal, but in reality there’s several more years of litigation before this matter will be resolved,” lawyer John Lockwood, who represents marijuana operators and applicants, told the News Service. “At this point I don’t see any upcoming change in the industry due to this ruling.”

Dodson’s decision comes on the heels of Florida pot czar Christian Bax’s announcement that he is stepping down and is the latest ruling in which state courts or appellate judges have repeatedly sided against health officials.

In addition to her favorable ruling for cancer-patient Redner, Gievers also decided that the 2017 law wrongfully banned patients from being able to smoke medical marijuana. That decision is also being appealed.

And a number of administrative law judges have faulted health officials for the manner in which they selected which applicants should get licenses. The most recent decision prompted the Department of Health to grant a license to Nature’s Way Nursery of Miami last month.

“You’ve got case after case --- something like six cases now where the judge has ruled their processes around medical marijuana were unconstitutional. The expense the state is going through to fight these cases is unnecessary and shows either complete ignorance of the law or bad faith,” Redner said in a statement.

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