A great battle has been won in Florida for a more comprehensive medical marijuana program thanks to Florida voters overwhelmingly voting forAmendment 2. But the war still remains in that Amendment 2 is a very short piece of legislation that gives hugepower to Floridas Department of Health (DOH) to make rules tforFloridaMedical Marijuana Treatment Centers (MMTCs). Amendment 2 simply states that DOH must come up with regulations for, among other things, [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. Thats it. After writing Florida Legalizes Medical Marijuana, So Now What? Heres the 4-1-1, Ive been getting many calls from Floridians who want a license to run an MMTC, but many questions remain about who can participate in Floridas new medical cannabis industry and how participating businesses can be run and financed, because the Amendment is silent on these topics.
The only reference Florida has for previous DOH rule making on medical marijuana is its 2014 Compassionate Medical Cannabis Act (i.e., the Charlottes Web law), which has since been amended. Upon its passage by the legislature, that law contained way more detail than Amendment 2 on who could operate and own a Dispensing Organization, and it set forth qualification thresholds DOH could not change through rule making. The Charlottes Web final DOH rules can be found here, and you can read our analysis of DOHs initial rules here.
Here is a run-down on some of what the Amendment does not cover and where DOH (and, more likely, the Office of Compassionate Use) will need to fill in the blanks for better or worse:
- Existing Charlottes Web nurseries.Since Amendment 2 pretty much puts DOH in full charge of the fate of Medical Marijuana Treatment Centers, the question becomeswhether DOH will only allow the existing Charlottes Web nurseries to run all MMTCs or whether DOH will expand the program to allow for a more open medical cannabis market witha diverse range of Medical Marijuana Treatment Center operators. Because Amendment 2 does not say that this sort of exclusive situation cannot happen, and because we all know these nurseries have tremendous influence with the Office of Compassionate Use, it is at least possible that these very same nurseries will walk off with all of the licenses for Floridas Medical Marijuana Treatment Centers. If DOH follows the path of Charlottes Web and engages in negotiated rule making for Amendment 2, you can bet these nurseries will at minimum have big seats at the table.
- Limitations on number of MMTCs and vertical integration.The Amendment doesnt dictate that DOH must limit the number of MMTCs in the state, but I seeDOH strictly limiting the number of MMTCs to ensure DOH control and oversight. Theres also the question of vertical integration and whether the DOH will DOH force Floridas Medical Marijuana Treatment Centers to be vertically integrated. Or will DOH create and issue different kinds of cannabis licenses and registrations without tied-house restrictions for cultivation, manufacturing, and dispensing? If DOH opts for mandatory vertical integration, expect to see many would-be marijuana operators lose interest in Amendment 2 because the costs and the difficulties ofvertical integrationwill prove impossible or undesirable for so many.
- Residency. The Amendment does not have an explicitresidency requirement. The MMJ industry in many states has suffered much heartburn whenmarijuana operators have to prove (and sometimes fail to prove) that their financiers or fellow owners havespent a certain amount of time in the state. Floridas Charlottes Web law has no explicit residency requirement, butsince itmandated that only Florida-registered plant nurseries existing for thirty or more years with the capability of cultivating more than 400,000 cannabis plants could participate, it essentially did have a residency requirement. Assuming DOH doesnt just turn over all new Medical Marijuana Treatment Centersto these nurseries as well, it remains to be seen as to whetherFlorida will allow out of staters to enter its cannabis market.
- Financing.TheAmendment is also silent on financing for MMTCs and so we do not knowwhether Florida will cap financing or restrict certain kinds of financing.
- Criminal background checks. The Amendment does not tell us what kind of criminal history Florida Medical Marijuana Treatment Center owners and managers can or cannot have. In most marijuana states,a felony convictionwithin the pastten years (or, sometimes, at all), makes you ineligible to own or manage a marijuana business. Since Florida hasnt been the friendliest state when it comes to marijuana-related crimes, I am expecting it will implementfairly aggressive criminal background standards.
- Corporate entities. Theres no mention in the Amendment as to whether Medical Marijuana Treatment Centers can be either for-profit or not-for-profit. Some states care about this distinction, but the trend is to allow marijuana businesses to be for-profit companies. Surely, when DOH defines MMTC applicant, it will tell us what kind of corporate entities can participate in its medical cannabis program, but we likely wont know this before the first set of DOH rules comes out.
- Application, scoring, and application fees. We can only guess at what the application for a Florida Medical Marijuana Treatment Center will look like and the information it will require. Having helped clients with competitive licensing applications in New York, Minnesota, Maryland, and Nevada (and less competitive licensing applications in a host of other states), I can tell you that if DOH doesnt hand all of the keys toAmendment 2 ...
