TALLAHASSEE (CBSMiami/NSF) — Florida is adding eight more medical marijuana operators to the 14 businesses currently selling cannabis throughout the state.
The new additions to Florida’s rapidly growing medical-marijuana industry — projected to generate more than $2.5 billion in annual revenue within five years — come from a pool of applicants that lost out in the first round of licensing in 2015 under an initial state law that allowed non-euphoric cannabis.
Since then, Florida voters broadly legalized medical marijuana, but the state has not begun an application process for investors eager to enter the state’s cannabis market, which is expected to eventually become one of the largest in the nation. Florida has more than 200,000 patients qualified for medical marijuana, and that number continues to increase.
Tuesday’s joint settlement agreement between the Department of Health and what are known within the industry as “one-pointers” means that all of the original applicants that sought licenses in a highly competitive process have now been approved as medical marijuana “treatment centers.”
And it reduces to three the number of available licenses under a 2017 law aimed at implementing the 2016 constitutional amendment that broadly legalizing medical marijuana. Two of those licenses are supposed to go to applicants with ties to the citrus industry, and one must go to a black farmer who was part of class-action lawsuits, known as “Pigford” cases, about discrimination by federal officials.
The settlement ends months of speculation about a potential deal between health officials and losing applicants.
The move is linked to a recommended order by an administrative law judge who castigated the state Office of Medical Marijuana Use for using a flawed system to decide which applicants should receive the licenses.
In June, Administrative Law Judge John Van Laningham accused health officials of a “colossal blunder” with the application-scoring process that created a “dumpster fire.”
Van Laningham’s decision in the challenge filed by Nature’s Way Nursery of Miami, Inc. was rooted in the 2017 law and the health department’s original process to grant five licenses after the Legislature legalized non-euphoric medical marijuana in 2014.
Under the 2017 law, health officials were required to issue licenses to applicants that had legal challenges pending as of January 2017 or who had scored within one point of the highest-ranked applicants in five regions.
Van Laningham’s recommended order prompted the state to grant a license to Nature’s Way, opening a flood of challenges by other applicants who argued they were eligible for licenses because they fell within one point of the highest scorer in their regions of the state.
While former Gov. Rick Scott’s administration for months had been rumored to be working out a deal with the “one-pointers,” it was his successor, DeSantis, who settled the matter after taking office in January.
Under the joint agreement, Spring Oaks Greenhouses, Inc.; Redland Nursery, Inc.; Dewar Nurseries, Inc.; Tree King-Tree Farm, Inc.; Perkins Nursery, Inc.; Bill’s Nursery, Inc.; DeLeon’s Bromeliads, Inc.; and Hart’s Plant Nursery Inc. are set to receive licenses.
In exchange for receiving licenses, the eight new medical marijuana operators had to agree to certain conditions laid out by the DeSantis administration.
The agreement requires the operators to agree they “intend to provide enhanced patient access by locating a percentage of dispensaries within impoverished communities and rural areas that have been adversely affected by extraordinary economic events or natural disasters.”
The operators also had to promise to require background checks of all employees that are “more stringent than required under existing Florida law.”
And the new operators have to “adopt security and anti-diversion policies that are more stringent than required under Florida law.”
The medical marijuana treatment centers, known as MMTCs, have to request authorization to start cultivating cannabis within 30 days, according to lawyers involved with the settlement.
DeSantis and the Department of Health have “resolved significant and expensive litigation surrounding the 2015 application process” through the settlements, Jim McKee, a lawyer who represents Perkins Nursery, told The News Service of Florida.
“At the same time, they have also enhanced patient access by issuing additional MMTC licenses as authorized by statute. The new licensees can now focus on working closely with the Department of Health to quickly get up and running — and turn their attention to serving Florida patients,” McKee said.
DeSantis has taken a markedly different approach to medical marijuana than Scott on other fronts as well.
Shortly after he took office, DeSantis issued an ultimatum for lawmakers to repeal the state’s ban on smoking medical marijuana. The Republican governor threatened to drop the state’s appeal of a court order finding that the ban ran afoul of the constitutional amendment if lawmakers did not act, but they bowed to pressure from DeSantis, who quickly signed the legislation into law last month.
(©2019 CBS Local Media. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The News Service of Florida’s Dara Kam contributed to this report.)