As medical marijuana becomes a big business in Florida, the companies who got in the door first are doing everything in their power to minimize competition and maximize their bottom line. And that means pushing for a closed system that prevents most people from breaking into the cannabis industry — and hurts patients by stifling competition and innovation.
That’s what a South Florida pot advocacy group argues in a new lawsuit against the state. The group, Patients and Producers Alliance, says the state’s heavily limited rules for granting medical-pot-growing and -selling licenses is unconstitutional.
“What we’re seeing is basically a state-by-state plan by what you could call ‘the big dogs’ of the industry,” Aaron Nevins, president of the alliance, says. “There’s a barrier to entry, and it’s harming the market… It’s putting profit above patients, essentially, and it’s allowing corporate America to stamp out any competition.”
Nevins’ group filed its lawsuit against the Department of Health February 14 in Leon County. The state has yet to respond in court and, no date has been set for a first hearing.
He says medical marijuana in Florida has gotten off to a slow start because the state has deliberately stifled competition. So far, only 13 licenses have been issued o marijuana producers, and Nevins says several of those licenses are essentially being held for ransom by companies that have no intention of ever growing pot for patients in need.
“There really isn’t a lot of opportunity,” Nevins says. “You have a couple of people that own a majority of the licenses. A lot of them are selling for very inflated valuations — they’re flipping for $40 to $50 million — and they’re not even producing any product.”
Florida’s approach to regulating a medical marijuana industry has been troubled from the get-go. New Times reported in early 2017 about the heavy lobbying and infighting over whether to expand licensing for producers. When legislators finally passed rules for the industry, they banned smokable products and kept the number of licenses to a minimum.
Nevins says special interests are still drowning out patients and doctors. Though 71 percent of voters in Florida approved medical marijuana in 2016, Florida has failed to deliver for them, Nevins says, by requiring millions of dollars in bonds and charging $60,000 application fees simply to attempt to break into the business.
“We have .02 percent of the state that actually has access right now,” Nevins says.
Jordan Huffer, cofounder of Synergy Wellness and a partner of Nevins’ in his lawsuit, says the law that’s on the books is more favorable to big businesses than to patients.
“You’re seeing regional players trying to figure out how to monopolize this market for not only THC, but any other compound coming out of marijuana that is beneficial,” Huffer explains. “They’re trying to regulate all of that and bring it in under their umbrella.”
Huffer and Nevins’ lawsuit — which is one of at least seven other ongoing suits against the state Department of Health over its pot rules — aims to force the state to open up its licensing so that far more Floridians have access to medical marijuana.
“On the state level,” Nevins says, “our lawsuit is essentially the lawsuit to end all the other lawsuits.”
Their case is built on two main arguments: First, legislators failed to follow the language of the constitutional amendment by restricting the DOH and the Office of Medical Marijuana Use to distribute only a handful of licenses; the amendment never mentions licenses at all, they argue, and forbids provisions that would include “overly restrictive limits on the number or size of the medical marijuana treatment centers.”
Second, they argue that the amendment explicitly states medical marijuana treatment centers should not have to be involved in growing or transporting pot, but the law passed in Tallahassee requires precisely that by forcing companies to be vertically integrated in everything from cultivation to transportation to sales.
Nevins says if their suit is successful, it could have far-reaching effects well beyond Florida.
“When you start looking at some of the closed systems around the country,” Nevins says, “you start to realize that this case is sort of the battleground nationally for the free market versus the closed system debate.”