Florida courts have spoken. They say the state’s medical marijuana distribution system is unconstitutional, and that could soon force the legislature and the industry to make changes.
In the case of Florigrown vs. the Florida Department of Health the First District Court of Appeal said the legislature’s rules to get a license conflict with the constitutional amendment, specifically, the portion that defines a medical marijuana treatment center or MMTC.
"The amendment said an MMTC would grow, dispense or process or educate. The word 'or' means they can do any one of those items. In the law that was promulgated by the state, they said the word 'and', and they created a vertical system," said Dr. Mark Moore, a certified medical cannabis physician for MEDCAN in Tallahassee.
"We’re at Year Three. Three years have gone by and this was just declared unconstitutional. [The court] recognized what all the patients and the public recognized two and a half years ago -- that this was not acceptable."
By requiring treatment centers to also produce and and distribute their product, the appeals court ruled the state has created a system that favors large businesses. According to the Florida Department of Health, there are 142 dispensaries in Florida backed by 22 businesses. Out of those, only 13 are operating to serve some 240,000 Floridians with medical marijuana licenses. That number continues to grow.
"There are no other states that have done it this way," said Moore. "Oregon has thousands of licenses, Colorado has thousands of licenses, California thousands of licenses."
He wants Florida to become more like those states, but others think Florida rulemakers will be reluctant to go that far.
"These licenses have recently been sold for anywhere between $50 million and $60 million. So, there’s a lot of investment that’s been made in these existing licenses here," explains Jeff Sharkey, Executive Director of the Medical Marijuana Business Association of Florida.
"I think the Department [Florida Deparment of Health] would be reluctant to step out on their own and say 'we think that a reasonable number of decoupled licenses, a license for cultivation, a license for processing, a license for retail distribution should be x whatever that number is'."
And Sharkey thinks opening the market may not be the right approach.
"I watch the national market. The price of a pound of marijuana [for] adult rec [recreational use] legal, two years ago was $4,000 a pound approximately. It’s now $900 a pound. Because there’s so much oversupply, so many licenses, so many growers, they’re flooding the market with product and people are undercutting," he said.
Sharkey says it's likely the Florida legislature will ultimately get a second shot at fixing the market -- a market First DCA Judge Scott Makar calls an oligopoly. Others have a harsher word for it.
"They can call it an oligopoly I’ll call it a cartel," says St. Petersburg Republican Senator Jeff Brandes. "I think what the legislature did was set up essentially a state sanctioned cartel. For decades, almost generations, the good guys with the guns went after the cartels, now the good guys with the guns protect the cartels as it relates to medical marijuana. Florida needs to end this; we need to open up the market."
For the past three years, he’s filed legislation to open the medical marijuana market and says he never supported vertical integration.
"There’s rooms for dozens if not hundreds of growers in the State of Florida. There’s rooms for a handful of processors and room for a number of dispensaries," says Brandes, and he believes having more businesses is best for the market and will benefit patients.
"All along the line it was always, what was best for the medical marijuana treatment centers? It was not [about] what was best for the patients. What’s best for the patient, is access."
Brandes says patients who can’t afford medical marijuana don’t have access to it because their medicine isn’t affordable. An ounce in Florida can be up to $400, as opposed to $30 in Oregon. Brandes says he’s waiting to hear whether the governor’s office will appeal the ruling. If not, he expects this to be the focus when committee weeks start up again in September.