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State Moves Toward More Medical Marijuana Licenses

Sep 21, 2017
Originally published on September 21, 2017 9:38 am

Seemingly learning from past mistakes, state health officials have issued an emergency rule outlining the application process for new medical-marijuana vendors seeking to receive licenses in two weeks.

The new rule, published Wednesday and going into effect immediately, outsources the evaluation of the applications to “subject matter experts,” requires “blind testing” of the applications, and includes a detailed application form — all departures from the Department of Health's previous medical-marijuana regulations that spawned a series of legal and administrative challenges.

After voters last fall approved a constitutional amendment that legalized medical marijuana for potentially hundreds of thousands of patients with debilitating conditions, the Florida Legislature passed a law during a June special session requiring health officials to issue 10 new “medical marijuana treatment center” licenses.

The law gave health officials until August 3 to issue some of the new licenses, and until Oct. 3 to select five more. More licenses must be issued once the number of patients in a statewide registry — now at 37,830 — reaches 100,000.

Whether the agency will meet next month's deadline is questionable.

“The goal is still Oct. 3,” Department of Health spokeswoman Mara Gambineri said in an email Wednesday.

But industry insiders remained skeptical.

“It's not just unlikely. It is literally impossible,” Ben Pollara, who was instrumental in the passage of the constitutional amendment and who represents a coalition of medical marijuana businesses, said in a telephone interview Wednesday.

The agency is hiring a contractor to supply the subject-matter experts responsible for scoring the applications. Health officials have not yet said when they will begin accepting applications or when the deadline for submissions will be.

Challenges to the rule could also delay the selection of the applicants, Gambineri acknowledged.

State lawmakers first legalized non-euphoric medical marijuana in 2014, authorizing five nurseries to grow, process and distribute the cannabis products for patients with severe epilepsy, muscle spasms or cancer. But implementation of the law was delayed due to legal and administrative challenges. The Legislature expanded the law last year to allow vendors to also provide full-strength marijuana for terminally ill patients.

Because of administrative challenges, the Department of Health issued two additional licenses to the five spelled out in the 2014 law. After the Legislature in June passed the new law to carry out the constitutional amendment, the total number of medical marijuana vendors in the state is up to 12.

But the upcoming licenses will be the first time the state has opened up the application process to businesses that did not participate in the first selection process in 2015, creating intense interest in what could potentially be one of the most lucrative medical-marijuana markets in the nation.

Perhaps the biggest change involves how the applications will be scored and who will rank them.

Under the 2015 process, a three-member panel — comprised of Christian Bax, the head of what is now called the Office of Medical Marijuana Use; his predecessor, Patricia Nelson; and a health department accountant — scored applications of nearly two dozen potential vendors.

The new process outsources the scoring to 16 “subject matter experts” in areas including cultivation, processing, dispensing, compliance and finance.

And, unlike the 2015 scoring system, the identities of the applicants will be kept secret from the evaluators.

Critics of the old process accused health officials of favoring applicants who had links to influential lobbyists close to Gov. Rick Scott and his administration.

In another departure, the health department's new rule includes an actual application form. The old process laid out detailed guidelines for what hopeful vendors should include in their applications, some of which were more than 1,000 pages long.

The new rule limits the numbers of pages allowed in each section of the application, with a total of 87 pages not including information related to financials.

And the new rule prohibits applicants from providing additional information once their applications have been submitted. At least one rejected applicant complained that the agency permitted some, but not all, competitors to supplement their proposals when the first round of licenses were granted.

The rule also incorporates requirements laid out in the new law, which broadened the types of businesses eligible for licenses.

The old law restricted applicants to nurseries that had been in business for at least 30 years in Florida and grew 400,000 plants. Under the new law, businesses that have operated in the state for at least five years and possess a certificate from the Department of Agriculture can apply.

The law also requires one of the five licenses to be granted to a member of the Florida Black Farmers and Agriculturalists Association who was part of class-action lawsuits focused on discriminatory lending practices by the U.S. Department of Agriculture.

This year's law also includes a controversial element instructing health officials to give special preference for licenses to applicants that “own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses.” Under the rule published Wednesday, applicants who meet those requirements can earn extra points.

And, because the law requires health officials to consider diversity, the new rule gives applicants up to 100 extra points — out of a total of 1,150 possible points —  for a plan that ensures the involvement of “minority persons, minority businesses or veteran business enterprises in ownership, management and employment.”

The five-page rule also included an element that took some insiders by surprise: The department will issue four “contingent licenses” to runner-up applicants who don't make the October cut. The “contingent licenses” will go into effect when the patient registry reaches 100,000.

Marijuana industry representatives reacted favorably to the health department's latest rule.

“They've proposed a scenario where you have something that results in greater scoring clarity and a better comparison between the applicants,” said Tallahassee lawyer John Lockwood, who represents medical marijuana industry clients.

Pollara noted that Florida will soon have 20 medical marijuana vendors.

“This is a tremendous victory for the hundreds of thousands of Floridians who will ultimately need safe, affordable, convenient access to medical marijuana. It's also great to see the department has learned from the mistakes of the previous process and taken significant steps to make the licensing process as fair and transparent as possible,” he said.

But although the new scoring process appears more defined, health officials can still expect challenges to the rule or the selection of new vendors, several experts predicted.

“The reality is they can't make everybody happy,” Lockwood said.

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