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Regulators Take Another Shot at Pot Rule

Sep 10, 2014

Credit WUSF Public Media

 State regulators have hurriedly released a revamped framework for Florida's new medical-marijuana industry, making minor changes after a legislative panel shredded an earlier attempt.

The Department of Health's Office of Compassionate Use on Tuesday published the revised rule governing everything from stems and seeds to serving the substance to patients. The latest version of the rule includes some tweaks dealing with who can own the five "dispensing organizations" the state will eventually license.

The organizations will grow, process and distribute products --- usually delivered in paste or oil form --- derived from strains of pot that purportedly do not get users high but are believed to relieve life-threatening seizures in children with rare forms of epilepsy.

A law passed this spring requires each applicant to have a valid registration from the Department of Agriculture and Consumer Services to cultivate more than 400,000 plants, be operated by a nurseryman as defined by state law and have operated as a registered nursery in the state for at least 30 continuous years. At least 60 nurseries meet the criteria.

A preliminary rule crafted by health regulators would have allowed nurseries to have just 25 percent ownership in the entities applying for a license. That option drew a rebuke from the Legislature's Joint Administrative Procedures Committee, which helps oversee state regulations. The original proposal also neglected to specifically address whether the nursery would be required to have a continued role in running the pot operation.

Under Tuesday's revised proposal, a nurseryman would have to "serve as the operator," alleviating some concerns that growers would have little or nothing to do with the grow operation despite lawmakers' intention that the nascent pot business be controlled by companies with a long agricultural history in Florida. The proposal would require a nursery to have at least 25 percent ownership of the organization that gets a license, but also would offer another alternative that would allow "100 percent of the owners of a nursery" to fulfill that 25 percent requirement.

That ownership change appears aimed at appeasing some nursery owners who expressed concerns about financing the marijuana operations. Because pot is still illegal under federal law, nearly all banks are refusing to lend money to marijuana-related businesses. Converting other areas of operations into cash-only business could pose major problems for growers interested in participating in the medical marijuana start-ups, lawyers for Costa Farms told the Department of Health at a day-long public hearing on Friday.

"Today's publication of a changed rule demonstrates that our focus has been to get this product to the market as soon as possible with an emphasis on patient safety. We want to avoid unnecessary delays. We want to help children with refractory epilepsy and patients with advanced cancer as quickly and safely as possible,” Florida Surgeon General and Secretary of Health John Armstrong said in a statement after the rule was published.

The proposed rule addresses some of the other questions posed last week by the legislative committee, which challenged the health department's authority regarding nearly every aspect of the comprehensive rule, and considerations voiced by growers and others at Friday's hearing.

After one nursery complained, the department changed the boundaries of one of the five regions to allow Martin County to be moved from the Central Florida region, which includes the Orlando area, into the Southeast region, which ranges along the Atlantic coast to Monroe County.

But overall the agency appears to have stuck to its guns and has receded little from its original blueprint. The most contentious aspect of the plan deals with the use of a lottery system to pick licensees in areas where more than one entity applies. Lawyers have threatened to sue over the use of the lottery, but health officials maintain that the process will minimize drawn-out litigation over contract awards that could delay getting the medical marijuana to patients.

The agency intends to certify the rule in 21 days and file it with the Department of State. The rule will then become effective 20 days after filing.

Seeking in part to offset a constitutional amendment that would legalize "traditional" medical marijuana going before voters in November, lawmakers this spring legalized strains of marijuana low in euphoria-inducing tetrahydrocannabinol, or THC, and high in cannabadiol, or CBD. The newly created Office of Compassionate Use within the Department of Health has until Jan. 1 to come up with a regulatory framework for the new industry.

Supporters of the low-THC, high-CBD strains of cannabis believe the substance can eliminate or dramatically reduce life-threatening seizures in children with severe forms of epilepsy. Under the new law, patients with other spasm-causing diseases or cancer would also be eligible for the strains of marijuana if their doctors order it, and if their doctors say they have exhausted all other treatments.