A contested ruling from one of Florida’s appellate courts could mean the end of both (1) required vertical integration and (2) caps on the number of registered medical marijuana treatment centers (MMTCs) in Florida.
To understand the issue, a quick primer on the nature of Florida’s (exclusively medical) marijuana program is in order. First, unlike many states, Florida requires “vertical integration,” meaning that, if registered by the state as a MMTC, the entity must “cultivate, process, transport and dispense” medical marijuana. Fla Stat. § 381.986(8)(e) (emphasis added). Second, Florida also caps the number of registered MMTCs, with the number of allowed MMTCs slated to increase as the number of registered qualified patients grows.
In a lawsuit initiated by a rejected MMTC applicant, the First District Court of Appeal (one of Florida’s five appellate courts) struck a number of significant blows to the existing medical marijuana framework in Florida, delighting prospective applicants and spooking existing license holders
Continue reading Could a Recent Florida Court Ruling Disrupt the State’s Marijuana Industry?
According to a research report published by Cowen & Co. earlier this year, the investment bank believes that the U.S. market for cannabidiol (CBD) consumer goods could reach $16 billion—a “conservative” forecast—by 2025, up from between $600 million and $2 billion in 2018 retail sales. As the third-most populous state in the country, this is a very big deal for Florida.
Florida’s state hemp program law, Section 581.217, Fla. Stat., created by the enactment of Senate Bill 1020, has the potential to transform Florida’s agricultural landscape while also capitalizing on a fertile market of enthusiastic cultivators and eager consumers.
With a population of more than 21 million, Florida has long been viewed as ripe for potential commercialization by the cannabis industry. Gov. Ron DeSantis made headlines in March when he signed legislation that effectively repealed the ban on smoking and “vaping” medical cannabis. Yet outside of Florida’s medical marijuana program (and the hemp pilot project discussed below), cannabis—which includes hemp and hemp-derived products—has remained a controlled substance, making the manufacture, processing, sale and possession of hemp or hemp-derived products (including cannabidiol, i.e., CBD-infused items) a criminal endeavor. Even within the state’s medical use program, the cultivation of cannabis, even for medicinal purposes, remains tightly regulated.
To read the full text of this article by Justin M. L. Stern, Robert A. Zinn, Jay Steinman and Jennifer A. Migliori, please visit the Duane Morris website.
On May 3, 2019, the Florida legislature passed SB 1020, creating the state hemp program and authorizing the Florida Department of Agriculture and Consumer Services (FDACS) to enact regulations to govern the program. The bill, first filed in the Florida Senate on February 13, 2019, passed with overwhelming support; the final version passed by a margin of 39-0 in the Senate after passing 112-1 in the House. Governor Ron DeSantis has until May 18, 2019, to veto the bill or it will automatically become law.
“The historic vote,” according to FDACS Commissioner Nicole Fried, is in response to the federal 2018 Farm Bill, which “removed the prohibitions on industrial hemp in place since 1937 and authorized states to create hemp programs.” Id. If SB 1020 becomes law, it will fundamentally alter the treatment of hemp and hemp extracts, including cannabidiol (CBD) products, under Florida law.
View the full Alert on the Duane Morris LLP website.