Florida Law Limiting Medical Marijuana Businesses Ruled Unconstitutional

By Sally Kent Peebles, Partner

Jul 17, 2019

Last week, Florida’s First District Court of Appeal (DCA) issued its long-awaited opinion in Department of Health v. Florigrown. In a decision that could have massive impacts on the state’s medical marijuana program, the DCA upheld, in part, a decision issued last year by Leon County Circuit Judge Charles Dodson. Specifically, the DCA agreed with the lower court’s ruling that both requiring vertical integration and limiting cannabis businesses licenses are unconstitutional. 

However, the DCA did not agree with the trial court that the Florida Department of Health (DOH) must begin immediately “registering” interested parties pursuant to the plain language of Amendment 2, as the lower court’s injunction had originally stated. The DCA argues that the constitutional amendment specifically directs the DOH to “establish standards [for medical marijuana treatment clinics (MMTCs)] to ensure proper security, record keeping, testing, labeling, inspection, and safety,” therefore the DOH should be able to regulate the issuance of licenses to ensure MMTCs adhere to certain standards in these areas.

While the decision will most likely be appealed to the Florida Supreme Court, it opens the door to the possibility of the Florida market opening up to more players, with lower barriers to entry. If vertical integration is done away with, the high cost to enter the market will diminish, allowing more smaller and specialized businesses to enter the market. Further, if the cap on licenses is removed, more licenses will be granted, allowing for greater patient access and a more competitive environment that could drive licensees to create better, more innovative products and, eventually, lower their prices.

The immediate effects of the ruling are unclear at this time, but it appears the rules regarding the upcoming application process will be delayed, as the Office of Medical Marijuana Use (OMMU) needs to see whether the DOH is going to appeal. If it does appeal, the application process may move forward under the current statute. If it does not appeal, the OMMU will need to go back to the drawing board and determine the process for issuing new licenses, the number of licenses they will issue, and critically, how to regulate horizontal licensees simultaneously with the 22 existing vertically integrated MMTCs.

If you have any questions about this decision or other issues involving Florida’s medical cannabis laws and regulations, please feel free to contact Sally Peebles at Vicente Sederberg's Jacksonville office via phone at 904-351-8558 or via email.

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