Florida MMJ Rules Upheld By Supreme Court

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The Court ruled that a 2017 law regulating the medical marijuana industry didn’t conflict with a ballot referendum approved by voters the previous year that legalized medical pot.

TALLAHASSEE — In a setback to companies hoping to enter one of state’s fastest growing industries, the Florida Supreme Court ruled Thursday that state medical marijuana regulations are likely legal.

In a decision released in the case of Florida Department of Health v. Florigrown, LLC, justices found that Florigrown’s challenges to state regulations did not have a “substantial likelihood of success.” It reversed a decision by the First District Court Of Appeal to put those rules on hold.

Florigrown, which was denied a license to become a medical marijuana treatment center in 2017, argued that Florida’s regulations do not comply with a 2016 constitutional amendment legalizing marijuana for medical use. More than 71 percent of voters approved that amendment.

“This is a sad day for those of us that think the free market is what works best, and an even worse day for Florida patients who will continue to struggle with high prices and low supply,” said Jeff Marks, a co-owner of Florigrown, in a statement. “The people of Florida didn’t vote for this system created by the Legislature where 22 mega-businesses completely control every aspect of medical cannabis. Floridians needed the Supreme Court to stand up for them, and today they declined to do that.”

A spokesperson for the Florida Department of Health said in a statement that the department is “pleased” with the decision.

The Tampa company challenged the state’s steep barriers to entry into the industry. A 2017 law regulating medical marijuana required that companies seeking licenses had to operate in every aspect of the business. Under the law, that meant companies had to “cultivate, process, transport, and dispense” medical marijuana.

The constitutional amendment passed by voters in 2016 defined a medical marijuana treatment center as a company that did any one of those things: “an entity that acquires, cultivates, possesses, processes…or or administers marijuana,” Florigrown argued. The state’s rules contradicted the language approved by voters, the company said.

Florigrown also argued that Florida couldn’t limit the number of companies licensed to sell medical pot. Before voters approved the constitutional amendment, seven companies had won licenses to sell low-potency marijuana to gravely ill patients. Under the 2017 law, lawmakers allowed for all of those entities — plus ten additional applicants who narrowly missed out on the initial licensing opportunity — to become medical marijuana treatment centers.

In addition to those seventeen licenses, the law spelled out that Florida would give out four more licenses for every 100,000 additional medical marijuana patients.

Florigrown argued that this cap unnecessarily restricted marijuana’s availability to patients, violating the constitutional amendment. Today, just 22 companies hold licenses to serve as treatment centers.

Finally, Florigrown argued the 2017 law amounted to a giveaway for the large companies already allowed to sell marijuana with low levels of THC, the main psychoactive compound in pot. Some of those companies have become the largest and most powerful marijuana companies in the state: Surterra Wellness, Curaleaf and Trulieve, were three examples. (The Florida marijuana industry’s origins could play into a reported federal investigation of U.S. Rep. Matt Gaetz’ ties to the industry.)

The Florida Constitution prohibits so-called “special laws” which reward certain businesses over others.

The Court disagreed with all of Florigrown’s arguments Thursday.

All seven justices found that the 2016 constitutional amendment allowed Florida to strictly regulate which companies can seek a medical marijuana treatment center license. The amendment called on the Department of Health to issue regulations that would “ensure the availability and safe use of medical marijuana by qualifying patients.” The 2017 law fell within these legal boundaries, justices wrote.

The Court also found that Florida’s regulatory structure provides adequate access for marijuana patients, despite Florigrown’s witnesses’ testimony to the contrary.

“This testimony would support a finding that Florida’s fledgling medical marijuana market is not functioning seamlessly, but not that the statute renders medical marijuana essentially unavailable for safe use in this state,” the unsigned opinion read.

Florida currently has more than 561,000 medical marijuana patients — a number that is growing by the thousands each week.

Chief Justice Charles Canady and justices Ricky Polston, Jorge Labarga, Carlos Muñiz, John Couriel and Jamie Grosshans agreed to beat back Florigrown’s final point: that Florida’s 2017 law amounted to a “special law.” Lawmakers grandfathered existing marijuana operators into the expanded medical market in 2017 to let patients access the market as quickly as possible, they reasoned. Only Justice Alan Lawson dissented in this particular finding.

“In light of the constitutional imperative for medical marijuana to be made available in a safe manner within nine months, the statute creates a licensure scheme designed to ensure regulated access to medical marijuana throughout the state within a short time frame, as contemplated by the Amendment,” the opinion read.

The Supreme Court has now ruled on the two major pot cases it had on its docket: Florigrown on Thursday, and a ballot measure to legalize recreational marijuana use that it struck down last month. In both cases, justices ruled against those pushing for expanded access to marijuana.

Democrat Nikki Fried, the state’s agriculture commissioner who is considering a run for governor in 2022, blasted Thursday’s decision.

“This status quo helps absolutely no one except the 22 medical marijuana companies in Florida at the expense of patients,” Fried said in the statement. “Florida’s medical marijuana industry will remain closed-off, restricting freedom of opportunity, weakening the free market, and leading to ever-higher prices for patients.”

Fried was a marijuana industry lobbyist before winning her 2018 race for agriculture commissioner. She’s engaged to Jake Bergmann, a co-founder of Surterra Wellness, which is now called Parallel — one of the 22 companies that holds a treatment center license in Florida. Bergmann left that company in 2018.

Ben Pollara, who ran the campaign to get the 2016 medical marijuana amendment passed, said he hoped the state would now focus on making rules to improve the marijuana market for patients. He said Thursday’s decision was to be expected from Florida’s highest court.

“You have a Supreme Court that tends to side with the Legislature and with business,” Pollara said. “In this case, they got the chance to do both.”

John Morgan, the Orlando trial lawyer who financed the 2016 ballot measure, said he doesn’t comment on Supreme Court decisions. But he also added: “It was discouraging. Of course I am the one who believes you should be able to grow pot in your backyard.”