Florida’s law requiring to grow, process and distribute cannabis and related products created an “oligopoly” and run afoul of a constitutional amendment that broadly legalized medical marijuana in the Sunshine State, an appellate court has ruled.
The 1st District Court of Appeal’s decision sent shockwaves through the state’s rapidly growing medical marijuana industry, in which licenses are routinely selling for upwards of $50 million.
The three-judge panel’s ruling upheld in part a decision issued last year by Leon Circuit Judge Charles Dodson, who sided with Tampa-based Florigrown in a lawsuit alleging a state law, passed during a 2017 special legislative session, did not properly carry out the amendment.
Tuesday’s ruling is “a good thing for the state of Florida,” said Joe Redner, a Tampa strip-club operator and one of Florigrown’s owners.
“If the Legislature can create oligarchies in any field, it’s crony capitalism. They’re picking winners and losers. And that’s not fair. It’s not right. It’s not constitutional,” Redner said.
Florigrown CEO Adam Elend called the ruling a “game-changer.”
“It drops a bomb on the current licensing scheme. It’s just changing the whole regime,” Elend said. “People are not getting medicine. The dispensaries are out of stock all the time. The products are limited, and the prices are high. That’s what happens in an oligopoly and that’s what we have.”
Dodson issued a temporary injunction requiring state health officials to begin registering Florigrown and other medical-marijuana firms to do business, but the judge’s order was put on hold while the state appealed. Dodson’s ruling also struck down a portion of the state law that set a cap on the number of medical marijuana operators in the state, which Tuesday’s appellate decision supported.
The statute “creates a vertically integrated business model which amends the constitutional definition of MMTC (medical marijuana treatment centers) by requiring an entity to undertake several of the activities described in the amendment before the department can license it,” judges Scott Makar, James Wolf, and T. Kent Wetherell wrote in the majority opinion.
The state law requires entities to “conform to a more restricted definition” than is provided in the amendment, the majority said.
The appellate court found “it is in the public interest” to require health officials to register medical marijuana operators “without applying the unconstitutional statutory provisions.” But that finding “does not support requiring the department to immediately begin registering” medical marijuana operators at this stage of the proceedings, the majority decided.
Doing away with the caps on the number of medical marijuana operators in Florida would almost certainly cause the value of existing licenses to plummet, a possibility Wetherell addressed in a separate opinion.
The majority’s decision “will effectively mandate an immediate change in the entire structure of the medical marijuana industry in Florida,” wrote Wetherell, concurring in part and dissenting in part with the majority opinion.