Florida Court of Appeals Denies Request to Open Cannabis License Application Window

New medical cannabis dispensaries have continued to open on a weekly basis in recent months in Florida, but the state’s ever-expanding business footprint remains limited to 22 operators.

Trulieve (120 dispensaries), Verano (59 MÜV dispensaries) and Curaleaf (51 dispensaries) represent 49% of Florida’s 474 outlets as of September 9, according to a Weekly update from the state Office of Medical Marijuana Use (OMMU).

Also as of Sept. 9, Florida had nearly 750,000 qualified patients with active IDs, meaning each outlet serves an average of nearly 1,600 patients. For Trulieve, that means distributing about 300 ounces of dried flowers to each of its 120 locations each week, according to OMMU data.

But aspiring market entrants who hope to earn a slice of that pie through additional licensing will have to keep watching past September 7. decision of the Florida Court of Appeals for the First District. The court upheld an order dismissing a lawsuit filed by Tampa-based Louis Del Favero Orchids Inc., which demanded that the Florida Department of Health issue additional retail licenses as part of a mechanism default license provided for in article 120.60 of the State Law.

A general law that applies to all state agencies, Section 120.60 states that “an application for a license must be approved or denied within 90 days of receipt of a completed application” or the application is “considered approved”.

Del Favero applied in 2018 for a license to cultivate and distribute medical cannabis from the Florida Department of Health, but state officials did not approve or deny the request and instead told Del Favero that the department did not was not accepting applications for additional licenses in the state at the time.

Since Florida voters passed Amendment 2 in 2016 and subsequent passage by the state legislature in 2017 of Senate Bill 8-A– creating a framework for the state’s cannabis industry – Del Favero led a battle of many years to obtain a license. The orchid grower even spent $770,000 to buy property in Pinellas County, according to the Tampa Bay Weatherin order to meet a requirement of the 2017 law which gives particular preference to applicants who own facilities for concentrating or processing citrus fruits or molasses.

After the 90-day window for submitting a license application, Del Favero for follow-up the Florida Department of Health, saying the state agency deprived the aspiring cannabis entrepreneur – not of the right to a license – but of the right to have his license applied for saw again.

A trial court dismissed Del Favero’s suit, and the Florida First District Court of Appeals reaffirmed that decision this week, in part because “allowing appellants to apply for licenses during an undesignated filing period would violate the competitive licensing structure.

Although he agreed with the majority opinion, First District Court of Appeals Judge Ross Bilbrey blasted state officials for dragging their feet in issuing more than licenses.

“[Del Favero] is understandably frustrated with the Department of Health’s continued failure to open the application window and issue medical marijuana treatment center licenses as required by the Florida Constitution,” Bilbrey wrote in his notice of the September 7. In Florida, “Medical Marijuana Treatment Center” (MMTC) is the general term for a vertically integrated business. Vertical integration is imposed by national regulations.

According to the 2017 state law passed by the Legislature, the Department of Health “must authorize four additional medical marijuana treatment centers…within six months of registration of each 100 000 additional active qualified patients in the Medical Marijuana Registry.

According to the OMMU, Florida reached the 100,000 registered patients mark in April 2018, the 200,000 mark in March 2019, the 300,000 mark in January 2020, the 400,000 mark in August 2020, the 500,000 in March 2021, the 600,000 mark in August 2021, and the 700,000 mark at the end of March 2022.

Based on the 2017 law, the Florida Health Department should have issued at least 20 additional licenses to track the active patient population. But much of the department’s licensing delay stems from a separate dispute that went to the Florida Supreme Court.

In early 2017, Tampa-based Florigrown applied for a retail license just before lawmakers passed the bill that would implement rules requiring vertical integration, according to JD Supra. State lawmakers included an “emergency rulemaking” section in the bill that set out the application process. Florigrown’s app was outdated.

Later that year, Florigrown’s premature request was denied and the company filed a lawsuit declaring the vertical integration provision SB 8-A unconstitutional because it did not align with the amendment of 2016 Voter Approved.

It wasn’t until May 2021 that the Florida Supreme Court issued a 6-1 opinion rejecting Florigrown’s constitutional arguments. While the move dealt a blow to smaller, non-vertical companies hoping to enter the space, it also meant that state regulators not need to change the current licensing structure for the medical cannabis industry in Florida.

But that was over a year ago, and Florida regulators have yet to open the license application window to industry hopefuls.

“Nearly five years after the issuance of the state of emergency, the window to apply for the MMTC license remains closed,” Bilbrey wrote in his Sept. 7 appeal decision that defeated Del Favero’s case.

Bilbrey also pointed out that the attorney for the Florida Department of Health said in March 2020 – during oral arguments in another court case involving the dismissed plaintiff MedPure LLC – that the reason for the delay in allowing the claims was due to the Florida Supreme Court’s pending decision in the Florigrown case. Case.

With that decision no longer pending, Bilbrey offered a recommendation to the Department of Health.

“I respectfully suggest that the department abide by its representations during MedPure’s oral argument – either open the application window referenced in the contingency rule or enact a replacement rule permitting MMTC license applications,” it said. -he writes. “Otherwise, it may be necessary for a potential licensee to ‘seek judicial relief to compel the department to comply with constitutional obligations’.”