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TALLAHASSEE (NSF) – Lawyers for state health regulators have a week to convince a judge to toss out a challenge to a proposed medical-marijuana rule in a case that could hinge on whether a nursery was “pregnant” when its owner filed the complaint.
After hearing two days of testimony, Administrative Law Judge W. David Watkins on Friday put on hold the Florida Department of Health’s repeated requests to dismiss the challenge filed by Baywood Nurseries, whose lawyer argued that a proposed rule setting up the framework for the state’s non-euphoric medical marijuana industry is unfairly tilted toward large growers.
Instead, Watkins, who threw out the agency’s first stab at a rule last year, gave both sides until next Friday to make their cases as to whether the nursery, which specializes in gardenias, has legal standing in the case.
Under the law passed last year, only nurseries that have been in business in Florida for at least 30 years and have been certified by the Department of Agriculture as growing more than 400,000 plants can apply to be one of five “dispensing organizations,” which would grow, process and distribute cannabis that is low in euphoria-inducing tetrahydrocannabinol, or THC, and high in cannabadiol, or CBD.
At the time Baywood Nurseries filed the challenge on March 24, Baywood’s certification showed that the Apopka nursery was growing fewer than 400,000 plants, owner Raymond Hogshead testified Thursday
That means Baywood wasn’t eligible to file the complaint, Ed Lombard, a private lawyer hired to represent the department, told Watkins Friday afternoon.
Lombard based his arguments on a 1979 decision by the 1st District Court of Appeal, which found that “Susan A.” could not challenge a rule dealing with Medicaid funding for abortions because she was not pregnant at the time she filed the complaint.
“When a petitioner files a proposed rule challenge at the division, the petitioner must have standing the day they file the petition. It’s a jurisdictional requirement,” Lombard said. “Much like Susan A., Baywood wasn’t pregnant when they filed their petition.”
In the 1979 ruling, the court said that Susan A., a member of a class-action lawsuit, could file another challenge if she became pregnant later.
“There’s no distinction between Susan A. not being pregnant and Baywood not being in possession of the certificate,” he said.
But Hogshead’s lawyer, Charles Moure, argued that the last-minute request by the state to have the case dropped came after Watkins refused to dismiss it for numerous other reasons.
The Department of Agriculture issued a new certificate to the nursery in April proving it was growing more than the requisite 400,000 plants and had been certified as having at least that many plants in previous years, Moure said.
“We contend that Baywood is very much a party that is substantially impacted by the rule,” Moure argued. “He certainly has the capability of growing more than 400,000 plants. … There are certificates that show that.”
The back-and-forth over Baywood’s standing came after Moure spent more than three hours questioning the department’s Office of Compassionate Use Executive Director Patricia Nelson, who selected the members of a rare “negotiated rulemaking” committee to hash out the rule.
The committee included one grower from each of the five regions of the state in which nurseries will compete for the licenses. Baywood is challenging the $60,036 application fee, saying it is too expensive and should be refundable. The committee settled on the fee after deciding that 15 growers would apply for the licenses and splitting among them the estimated $900,000 annual cost for the state to regulate the industry.
But Moure said that Nelson failed to poll the nearly 100 nurseries across the state that would be eligible to apply, and that if more growers applied, the cost of the application would go down.
Baywood also complained that portions of the rule are too vague, such as a portion regarding a scoring mechanism used to determine which applicants will be selected.
Watkins gave both sides until “close of business” next Friday to file briefs about whether Baywood has standing in the case. The judge has 30 days from Monday to issue his final order.
Lawmakers and advocates for the law, which would allow doctors to order the low-THC cannabis for patients with severe muscle spasms or cancer, have been frustrated by delays in getting it implemented. Health officials were supposed to begin selecting the dispensing organizations by Jan. 1 of this year.
But Sen. Rob Bradley, a Fleming Island Republican who was instrumental in the law’s passage last year, recently indicated he was dropping an attempt to revise the law. Bradley was considering quadrupling the number of dispensing organizations, increasing the THC levels and expanding the types of patients who would be eligible for the treatment.
After pushing for the law on behalf of her daughter RayAnne, who has epilepsy, Holley Moseley is now demanding that the Legislature act on Bradley’s bill.
Dismissal of the rule challenge “would only clear one hurdle,” Moseley, who was a member of the negotiated rulemaking committee that crafted the latest proposal, said in a statement issued Thursday.
“When over forty nurseries are competing for five licenses into a multi-million dollar industry, these families foresee greed taking over again and anticipate that challenges to the procurement process will be inevitable. When that happens, it will grind progress to a halt yet again, further delaying the ability for these families to get their hands on high CBD oil,” she said in the statement.
But earlier this week, Senate President Andy Gardiner said the pot fight was effectively over for this year. The Senate this week repeatedly has postponed hearing Bradley’s bill (SB 7066).
“It’s probably not going to happen,” Gardiner, R-Orlando, said Wednesday.
The News Service of Florida’s Dara Kam contributed to this report.