The Sunshine State has been at the forefront of headlines regarding its cannabis industry not only due to the advocacy (and push back) of legalizing adult-use marijuana in the state, but also as a result of the various legal changes affecting all those in the industry from Medical Marijuana Treatment Centers (“MMTCs”) to their qualified patients. Below we will breakdown the evolution of Florida’s medical marijuana industry since the clock struck midnight on January 1st, 2023:
January – April
With the Office of Medical Marijuana Use (“OMMU”) announcing a new general application window on December 19th, 2022, those who have been waiting since 2015 to enter Florida’s billion-dollar marijuana market had until April 28th, 2023, to submit their comprehensive applications to compete for the available twenty-two (22) MMTC licenses. Those vying for one of these coveted vertically integrated licenses had to meet all regulatory requirements, as well as satisfy the sixteen (16)-part Application Guide set forth by the OMMU. From demonstrating their registration to do business in the state of Florida for the prior five (5) consecutive years to detailing their operations’ technical and technological ability through their in-depth cultivation, processing, and dispensing plans, interested applicants spent several months curating competitive and proven plans to hope for a spot in the industry. As such, the OMMU released that only seventy-four (74) applicants submitted completed applications by the April 28th deadline.
In the rear-view of the opening of additional medical marijuana business licenses in Florida, Smart & Safe Florida, who launched their adult-use legalization campaign in August 2022, announced in December 2022 that they had acquired over 50,000 signatures for the petition. Although this was a long way from the 891,523 valid signatures needed to be certified to be placed on the 2024 ballot, the advocacy group continued its rigorous progress through early 2023. By April 4th, 2023, Smart & Safe Florida collected 653,961 valid signatures making a significant jump in its progress and steadily making its way to meeting the state’s ballot requirements. This significant jump is largely due in part to the $38.4 million dollars spent as of April 2023 to get the new measure on the ballot by its frontrunner sponsor, Trulieve Inc.
May
In late May, applicants who submitted completed applications received their Errors and Omissions Letter, which identified any areas of their application which was either missing information/documentation or required further clarification. Upon receipt of the Letter, applicants had twenty-one (21) days to submit the requested documentation and information to ensure they acquired not only all points necessary to receive a higher-than-average score in certain sections, but also to guarantee their compliance with all regulatory requirements to prevent disqualification.
Since the Pigford/Black Farmers Litigation MMTC License Application period was held in 2022, the OMMU has faced continuous legal obstacles by applicants who were not granted the one (1) license permitted under the statute. From one applicant passing away prior to the award of license to a 99-year old Northeast Florida applicant’s difficulty in providing the requisite documentation to demonstrate her five (5) years registered to do business in the state of Florida, this application round created narrowly individualized issues for each denied applicant. With much advocacy on behalf of the denied applicants, House Bill 387, which was originally designed to primarily focus on physician renewal certifications through telehealth, was amended in May to reflect new terms specific to the applicants of the 2022 Pigford/BFL application round. Under the new law, Pigford/BFL applicants will be granted an MMTC license if they either received a notice from the Department of its intent to deny or approve of the application and the application has no deficiencies; received a final determination from the Department in an administrative challenge that the applicant met all requirements of licensure, even if the applicant died during the challenge process; OR had deficiencies noted in their Errors and Omissions Letter, but cure such deficiencies within the ninety (90)-day time frame. Not only will this expand the licenses permitted under the original statutory provision, but also allow the initial winner, Terry Donell Gwinn, to begin his operations immediately rather than wait until all legal challenges are decided upon.
Further, on May 11, 2023, Governor DeSantis approved of House Bill 1387, which made several changes to the state’s Florida medical marijuana program. Under section 381.986(1)(a), Florida Statutes, the new law defines “attractive to children” to mean “the use of any image or words designed or likely to appeal to persons younger than 18 years of age, including, but not limited to, cartoons, toys, animals, food, or depictions of persons younger than 18 years of age; any other likeness to images, characters, or phrases that are popularly used to advertise to persons younger than 18 years of age; or any reasonable likeness to commercially available candy.” This new definition provides further clarity that all marijuana products, including edibles, cannot be produced to be attractive to children, as well as laying out additional requirements regarding packaging and labeling, advertising, and marketing. For example, a MMTC’s name and logo cannot contain wording or images that are attractive to children. On the precipice of the recreational initiative, this new law provides further limitations on MMTCs packaging and labeling, advertising, and marketing by adding that such productions cannot “promote recreational use of marijuana.” In addition, the new amendments make substantial changes to the Level II background screening requirements to those employed by MMTCs, which makes those who applied in the April 2023 batching cycle concerned with how this new law will affect their application for licensure. Under the new law, exemptions from disqualifying an individual as provided in section 435.07, Florida Statutes, do not apply to MMTCs background screening protocols. Moreover, the new law adds that MMTCs’ “employees” in addition to their owners and managers are now required to pass a Level II background screening pursuant to chapter 435, Florida Statutes. Lastly, the new law adds that the costs of undergoing such background testing will be the responsibility of the MMTC or the certified CMTL.
While the Smart & Safe Florida campaign continued to make headway on acquiring the requisite signatures needed for the 2024 ballot, the Attorney General of Florida, Ashley Moody, submitted a letter to the Supreme Court of Florida requesting the Court to determine whether the adult-use amendment complies with the single-subject requirement of the Florida Constitution, as well as whether the ballot title and summary of the amendment complies with the substantive and technical requirements of section 101.161(1), Florida Statutes. This is not the first time Attorney General Moody argued against the legalization of adult-use as she made the same argument against a 2022 legalization measure, which the Florida Supreme Court subsequently invalidated it.
June
On June 27th, 2023, Governor DeSantis signed Senate Bill 210 into law which seriously affects medical marijuana patients residing in recovery residences. Under SB 210, residents of recovery residences, or also known as sober living facilities, are expressly prohibited from possessing or using medical marijuana, even if they are a registered patient that has been certified to use medical marijuana by a licensed physician in accordance with state law. This new law singles out only medical marijuana use, as all other pharmaceutical drugs prescribed to residents by their physicians are permitted to be used. Further, such facilities licensed by the state’s Department of Children and Families (“DCF”) are required to provide proof of prohibition of marijuana use, including “marijuana that has been certified by a qualified physician for medical use in accordance with s. 381.986.” Moreover, licensed service providers are not allowed to make a referral of a prospective, current, or discharged patient or accept a referral to/from another service provider that allows the use of marijuana, even if they only permit medical marijuana us by their residents. All affected recovery residences will face fines for violating this new law as the DCF has until January 2024 to establish a mechanism to hold them accountable.
Further, on June 27th, 2023, Governor DeSantis approved of Senate Bill 1676, which created several changes to those operating in the hemp industry. The most notable change is the prohibition of sales of any consumable hemp products, including snuff and chewing gum, to individuals under the age of twenty-one (21). This new addition expands on the already existing prohibition that prevents businesses from allowing those under twenty-one (21) from purchasing smokable hemp products. Under the new provisions, anyone who sells such products to an individual under the age of twenty-one (21) will face a misdemeanor of the second degree in violation of sections 775.082 or 775.083, Florida Statutes. Further, if it is their second or subsequent attempt within one (1) year of violating this law, the individual will face a misdemeanor in the first degree.
Moreover, SB 1676 enlists stricter packaging and labeling guidelines for those making hemp products in the state of Florida, as well as sets forth additional regulatory requirements on advertising such products. The Department is required to establish new rules to ensure packaging and labeling requirements, as well as advertising of hemp extract products are not attractive to children nor specifically targeting children. Pursuant to SB 1676, “attractive to children” means manufactured in the shape of humans, cartoons, or animals; in a form that bears any reasonable resemblance to an existing candy product that is familiar to the public as a widely distributed, branded food product such that a product could be mistaken for the branded product, especially by children; or containing any color additives. Further, all hemp extract batches that will be distributed and sold by retails must be processed in a facility that holds a current and valid permit issued by a regulatory agency with authority over the facility, and it must meet the human health or food safety sanitation requirements of that overseeing regulatory entity. Such reports will now be documented to ensure producers are in compliance with the law.
Another enacted legislative bill, House Bill 387, changed the certification process of a patient ever-so-slightly to allow more flexibility on renewals of his/her medical marijuana card. Physicians are still required to conduct in-person, physical examinations of a patient before issuing an initial certification; however, the new law allows physicians to conduct renewal consultations with the patient remotely using telehealth. This new law makes permanent the temporary telehealth abilities that were permitted under emergency rules during the 2020 pandemic. Further, as discussed above, HB 387 has created an additional pathway to license more Pigford/BFL applicants, so long as they meet the new law’s eligibility requirements, as well as continue the approval process of the 2022 application round’s initial winner while litigation remains ongoing. Applicants who were denied a license initially will now have ninety (90)-days to demonstrate to the Department of their compliance with the Application Guide, statutory and agency rules, and the new law to hopefully be awarded a coveted MMTC license.
The OMMU also released a new emergency rule, which became effective on June 12th, 2023, that now requires caregivers, who are not “close relatives” of the patient, to undergo a Level II background screening in accordance with section 381.986(6)(b), Florida Statutes. Not only will applicable caregivers be required to submit a full set of fingerprints to a Livescan Service Provider, but also must submit a completed “Caregiver Background Acknowledgment and Information” Form to the Department to ensure compliance with the new rule. Even though caregivers who meet the “close relative” definition under Florida law are not required to pass a Level II background screening, they must submit a “Close Relative Acknowledgement Form” in accordance with the rule.
While the state was making significant changes to the medical marijuana and hemp industries, the Florida Department of State announced that the adult-use ballot measure gathered enough signatures to be placed on the 2024 ballot. In June, the proposed constitutional amendment proposed by Smart & Safe Florida gathered 967,528 valid signatures – exceeding the state’s requirement by more than 70,000 signatures to reach the ballot. Although this was a significant accomplishment in legalizing adult-use of cannabis in the Sunshine State, advocates still faced the opposition of the Attorney General, who is arguing that the proposed amendment does not comply with the Florida Constitution and law. In response to Attorney General Moody’s letter, parties were required to submit their briefs to the Florida Supreme Court by late July.
July
Due to the passage of HB 387, Pigford/BFL applicants, Terry Donell Gwinn and Shedrick McGriff, were awarded an MMTC license in July 2023 joining the current twenty-two (22) other MMTC licensees.
In late July, advocates for the legalization of adult-use submitted their initial briefs to the Florida Supreme Court highlighting their compliance with the state’s laws and disagreement of the Attorney General’s unprecedented arguments. Smart & Safe Florida filed a ninety-nine (99) page brief noting that they have acquired more than 1 million valid signatures from registered voters in Florida to get on the 2024 ballot. The advocacy group is not only facing push back from the Attorney General, but also other opponents such as Drug Free America and the Florida Chamber of Commerce, which they assert such cases should also be dismissed by the Court. Smart & Safe Florida continues to argue that they followed the guidance that the Court has provided over the past several years when considering prior proposed marijuana reforms and that such assertion by the Attorney General is extreme as she would require the Court to forego such precedence. The conclusion of Smart & Safe Florida’s brief requests the Court to issue an opinion as to whether the adult-use initiative satisfies the legal requirements set forth in the Florida Constitution and law to be placed on the ballot – which would satisfy its last legal hurdle to be placed on the 2024 ballot.
August
On August 2nd, 2023, Attorney General Moody submitted her sixteen (16)-page reply brief stating that the adult-use initiative is not only misleading to voters with its ambiguous language, but also in express violation of federal law as marijuana is a Schedule I drug under the federal Controlled Substances Act. Further, the Attorney General does not shy away from targeting the initiative’s main sponsor, Trulieve Inc., asserting that by strategically integrating the new recreational marijuana industry into the current medical marijuana program framework the MMTC licensee would not have to take any additional steps to be able to sell recreational marijuana, allowing them to be the frontrunner of the new market.
Further, the First District Court of Appeal (“DCA”) made a substantial change in Florida’s medical marijuana industry when the three-judge panel sided with Leafly, an e-commerce company based in Seattle, opening the door for third-party marijuana e-commerce. For context, Leafly would contract with MMTCs in Florida to host online sales-order services where the company would publish such information on its site and then communicate to the MMTCs when a qualified patient had placed an order on their site for pick-up or delivery. Then the MMTC would inform Leafly when the order was ready for pick-up or was pending delivery, so the company could notify the qualified patient. The qualified patients would either pick-up the order at the MMTC’s dispensing facility or have their order delivered by the MMTC’s delivery personnel. In 2021, the OMMU issued a memorandum warning MMTC’s to stop using such services or be fined up to $5,000 per violation alleging it violated section 381.986(8)(e), Florida Statutes. In Department of Health v. Leafly Holdings, Inc., the Department appealed the Administrative Law Judge’s decision which sided with Leafly’s assertion that the Department acted upon an unpromulgated rule when they issued a memorandum warning against MMTCs for contracting with Leafly for online ordering services. The Department in its appeal argued that the memorandum was merely restating the prohibition set forth in section 381.986(8)(e), Florida Statutes, that forbids MMTCs and third party service providers from contracting. Unfortunately for the Department, the First DCA affirmed the lower tribunal’s decision because the prohibition set forth in the Department’s memorandum goes beyond the text of the statute and thus, is an unpromulgated rule in violation of section 120.54, Florida Statutes.
Upcoming
Currently, in the Florida medical marijuana program, applicants of the April 2023 licensing window are awaiting the determination of who will be licensed as the new MMTCs in the state of Florida. For those who missed the April 2023 application window, many industry experts anticipate an additional application window by the end of this year as the OMMU has announced prior its intention to hold another general batching cycle for additional MMTC licenses. Contact us today to discuss your options on how to enter Florida’s billion-dollar market!
Further, although litigation of the Pigford/BFL denied applicants remains ongoing, such applicants have ninety (90)-days from the date they received their most recent Errors and Omissions Letter to submit all requested documentation and information to the Department in the hopes of being awarded an MMTC license. The ninety (90)-day period ends in October 2023, so we will likely see the awarding of additional Pigford/BFL MMTC licenses by the end of this year.
While advocacy groups continue to fight against the opposition to their initiative, the residents of Florida may get an opportunity this November to vote for the legalization of marijuana in the Sunshine State. If passed, this would allow a recreational marijuana program to be implemented by May of 2025. The Financial Impact Estimating Conference predicted that if the proposed amendment passes, it would generate at least $196.5 million annually in state and local revenues once the legal retail market was fully operational, with the potential to rise up to $431 million.
We will update this blog as additional news comes to the forefront on Florida’s ever-evolving marijuana industry.
Last Updated: September 5th, 2023