TALLAHASSEE, Fla. – State well being regulators on Monday set in movement a course of to difficulty as much as 22 more medical-marijuana licenses, in a extremely anticipated transfer that might double the scale of Florida’s medical-cannabis business.
The state Department of Health additionally revealed an emergency rule that might make it far more costly for marijuana operators to resume their licenses each two years, growing the associated fee from roughly $60,000 to more than $1 million.
The leap within the renewal charges got here after Gov. Ron DeSantis this 12 months mentioned medical-marijuana corporations weren’t paying sufficient to function within the state, the place licenses have offered for more than $50 million.
Under an emergency rule establishing the method to use for new licenses, well being officers would settle for functions in “batching cycles.” The plan mentioned the home windows for the batching cycles might be established in a separate rule however didn’t say what number of licenses could be up for grabs in every cycle.
The rule additionally set the appliance charge for new licenses at $146,000, more than double the $60,830 charge established throughout the state’s preliminary spherical of licensing more than 5 years in the past.
The launch of the principles on Monday created a right away buzz amongst business attorneys, lobbyists and traders.
Health officers have been “clever” to incorporate the batching-cycle provision within the software rule, Sally Kent Peebles, a Jacksonville-based companion on the nationwide cannabis-law agency Vicente Sederberg LLP, informed The News Service of Florida.
“It was quite brilliant to include the language regarding the batching cycle, and I would think the reason they did that is to avoid all this costly litigation that we’ve seen in the past,” Peebles mentioned.
Losing candidates would have the chance to use for licenses throughout one other batching cycle, which might have an effect on their capability to file authorized challenges, in response to Peebles.
“An unsuccessful group would be less inclined and has the wind taken out of the argument’s sails when the Department of Health can say … ‘You have the chance to reapply,’” Peebles mentioned.
With more than 22 million residents and an growing older inhabitants, Florida is considered as one of many hottest medical-marijuana markets within the nation. Florida, which has 22 licensed operators, had more than $1 billion in medical-marijuana gross sales within the first six months of 2022, in response to Headset, a hashish information analytics firm.
“We appreciate the department moving forward on this important next step and look forward to filing an application once the window opens,” Daniel Russell, an lawyer with the Dean Mead agency who represents candidates, informed The News Service of Florida.
A 2017 regulation, which created a framework for the state’s medical-marijuana business, required the Department of Health to grant new licenses as numbers of licensed sufferers enhance. With more than 775,000 sufferers, the state ought to have issued at the least one other 22 licenses to maintain up with the inhabitants of sufferers.
But the DeSantis administration has left the appliance course of in limbo for the reason that governor took workplace in 2019.
DeSantis’ workplace has blamed the delay on litigation over the 2017 regulation, however a Florida Supreme Court choice upholding the statute was finalized final 12 months.
“While the application deadline will be established via a separate rule, today’s publication of the application rule and form begins a long-awaited process to award the 22 additional licenses currently authorized by statute,” Jim McKee, an lawyer who represents license holders and candidates, informed the News Service.
While the transfer towards granting more licenses drew reward, business insiders additionally predicted that the dramatically greater renewal charge would probably draw pushback from at the least some present operators.
The new renewal charge relies on a formulation that features the sum of money it prices the state to control the business. The renewal charge might be $1,332,124.42 for license renewals due between Jan. 1, 2023 and Dec. 31, 2024, in response to paperwork launched by the Department of Health on Monday.
The governor flagged the license-fee difficulty in August, telling reporters the state “should charge these people more.”
“I mean, these are very valuable licenses,” the governor mentioned. “I would charge them an arm and a leg. I mean, everybody wants these licenses.”
The hashish business has blossomed since voters accepted a 2016 constitutional modification broadly authorizing medical marijuana.
The division Monday additionally laid out a course of for a part of the 2017 regulation requiring well being officers to provide a particular choice for as much as two licenses to candidates that “own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of marijuana.”
The citrus choice has been the goal of quite a few administrative and authorized challenges by Louis Del Favero, Inc., a Tampa-based orchid grower that bought property to satisfy the choice necessities. After different makes an attempt fizzled, Louis Del Favero in November filed a lawsuit accusing the Department of Health of violating the state Constitution by delaying the issuance of extra licenses.
Seann Frazier, a Tallahassee lawyer who represents Louis Del Favero, known as the discharge of the brand new guidelines “a step in the right direction.”
“We’re very encouraged. We look forward to the actual process opening up so we can apply,” he informed the News Service.
The 2017 regulation additionally required well being officers to grant a license to a Black farmer who participated in decades-old litigation, often called the “Pigford” lawsuits, over the federal authorities’s racial discrimination in lending practices.
The well being division not too long ago introduced its intent to award the Black farmer license to a Suwannee County grower, however the company’s choice is being challenged by shedding candidates and the license has not been finalized.
Monday’s guidelines have been launched a couple of month after the Department of Health employed Christopher Kimball to function the state’s new pot czar. Kimball left the Navy in May after serving as “agency counsel/general counsel” for the Judge Advocate General’s Corps since 2008, in response to his LinkedIn profile. He served briefly on the state Agency for Health Care Administration earlier than taking the helm of the Office of Medical Marijuana Use.
