Florida Supreme Court gets another dose of medical marijuana
In a case that could have a dramatic impact on the state's pot industry, the Florida Supreme Court took the unusual step on Wednesday of hearing a second round of arguments to challenge a state law aimed at implementing a constitutional amendment who have largely legalized medical marijuana.
Tampa-based Florigrown LLC is challenging the 2017 bill that created a regulatory structure for the state's medical marijuana industry. Florigrown, which owns well-known strip club operator Joe Redner, claims the law is not properly implementing the change.
Part of the law requires medical marijuana operators to handle all aspects of the cannabis business, including the cultivation, processing, distribution and sale of products. However, Florigrown is sticking to what is known as the "vertical integration system," which goes against the constitutional amendment approved by more than 71% of voters in 2016. The vertical integration requirement limits the number of companies that can participate in the industry to compete for Tampa business.
Florigrown won in court after starting his legal challenge three years ago. Wednesday's arguments came after Governor Ron DeSantis's administration appealed an appeal court ruling confirming part of an injunction from Leon County Circuit Judge Charles Dodson who found the 2017 law to be inconsistent stand for constitutional amendment.
The Supreme Court heard arguments in the case in May, but on rare occasions ordered a new round of arguments centered on whether the law conforms to an unconstitutional "special law". The Florida Constitution forbids "special" laws that are generally intended to benefit certain businesses.
Joe Jacquot, General Counsel of DeSantis, represented the Florida Department of Health during the hearing on Wednesday, arguing that the 2017 law allows applicants who meet certain criteria to compete for highly coveted medical marijuana licenses.
“This is a growing bucket of licenses. This is clearly an open class, ”said Jacquot.
However, Florigrown's attorney Katherine Giddings pointed out that the state has so far only granted licenses to 22 marijuana operators, each of whom had previously applied for a license under a 2014 law allowing non-euphoric cannabis that was passed the constitutional amendment preceded.
"This is definitely a closed class because no one can ever get the same privileges they had," she said. “This is anything but a free market. It created a monopoly for some companies. Therefore the licensing scheme is inappropriate and arbitrary. "
The 2017 law allowed health officials to license operators who were already licensed under the non-euphoric cannabis law, as well as companies that were not selected in the previous licensing round or were in litigation with the Ministry of Health. The law also created a preference for companies involved in the Florida citrus industry, and required a license to go to a black farmer involved in federal litigation.
During the questioning on Wednesday, the judges were divided on the constitutionality of the law.
“This is a statute-wide application, a broad application that applies to the implementation of a constitutional amendment. It looks like a general law, ”said Judge Alan Lawson.
But Chief Justice Charles Canady asked Jacquot "why it is not arbitrary" to provide that a company is eligible for a license because it has sued the state.
Jacquot said the losing applicants had already been "rated and rated" by state health authorities and were "at least close to being licensed."
But Canady was not convinced.
"I don't know how to say they have a level of comfort because they have been scored and rated and found to be poor," he said.
Judge Jamie Grosshans was also skeptical of the law's licensing system.
“Why do they have priority over these newcomers? How about not a closed or preferred class if they clearly couldn't meet the department's standards beforehand? However, the legislation gives them an edge over someone new to the industry, ”she asked.
Jacquot acknowledged that currently licensed operators known as medical marijuana treatment centers, or MMTCs, have a “head start” in the industry. But that doesn't make the law special, he argued.
"They went through the Department of Health process," said Jacquot. "Now you can say you are the second tier ... but you still have some criteria to become an MMTC."
Judge Carlos Muñiz appeared to support Jacquot's position.
The law gives the old applicants "a priority in the line, but it's not like they are exempt from the requirements that the legislature decided that once they are all up and running, these companies must be able to do so" said Muñiz.
The Florigrown case has received widespread attention in the state's highly competitive medical marijuana space, where licenses have sold for more than $ 50 million and the number of registered patients exceeds 400,000 and continues to grow.
Several potential medical marijuana operators have intervened in the case in hopes of gaining access to what is likely to be one of the most lucrative markets in the country.
The former Lt. Governor Jeff Kottkamp, who represents Triangle Capital Inc., also addressed the Supreme Court on Wednesday. According to court documents, Triangle's clients hold medical marijuana licenses in Colorado and Arizona.
Kottkamp, a former state official, argued that the 2017 law grants privileges to certain operators.
"We cannot use the statutes to bestow special favors on private companies, which is exactly what has happened in the medical marijuana arena," he said. “Ultimately, our goal is to provide affordable, safe medical marijuana to patients. If we allow the free market to handle it, we will achieve that goal. "
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