Medical marijuana industry has high anxiety waiting for Florida Supreme Court ruling

After the Florida Supreme Court hears arguments in a case, justices typically try to hand down a ruling within six months.

Although the court heard final arguments in Florida Department of Health v. Florigrown nearly eight months ago, it has yet to render a judgment.

It’s difficult to overstate the stakes of the case. The court could decide to upend the state’s medical marijuana regulations, throwing a $1.2 billion industry with several national conglomerates into a state of uncertainty. Lawmakers and bureaucrats would have to rewrite the rules for the industry — potentially from scratch.For months, the people invested in one of Florida’s fastest growing industries have swapped nervous texts and phone calls every Thursday at 11 a.m. — when the Supreme Court publishes its opinions — bracing for a ruling that could make or break their companies.

“We look to see if it is, in fact, the day of reckoning,” said Taylor Biehl, a Tallahassee lobbyist and the co-founder of the Medical Marijuana Business Association of Florida.

Judges could uphold all or parts of the state’s current regulations, dealing a blow to smaller firms like Florigrown, a Tampa-based company that applied to become a medical marijuana treatment center in 2017. The company was turned down by the state because at the time, the Florida Department of Health had not yet made rules to regulate the industry.

During the 2017 legislative session, lawmakers passed legislation forming those rules. They created steep barriers to entry for new players in the state’s marijuana game. In order to get a license, a company had to be “vertically integrated” — shorthand for a rule that they “cultivate, process, transport, and dispense marijuana.” A great deal of investment and expertise is required from companies hoping to operate this way.

Florigrown sued the state, arguing those rules contradicted the 2016 medical marijuana ballot initiative overwhelmingly approved by voters. That initiative defined a medical marijuana treatment center as a business that “... transfers, transports, sells, distributes, dispenses, or administers marijuana.”

Billions of dollars could hinge on the one-word tweak from “and” to “or.”

“The direction of the industry is at stake,” said former Florida Lt. Gov. Jeff Kottkamp, who’s representing clients in the case who support Florigrown’s challenge to the existing rules.

A long-running saga

In total, the Florigrown case has dragged on for three-and-a-half years. It’s unclear how much money the state has spent defending its medical marijuana rules. The Florida Department of Health ignored weeks of requests for comment from the Herald/Times.

Even businesses that can meet the vertical integration requirements have had to put their plans on hold because of the uncertainty around the case. Florida rules allow for the issuing of 17 medical marijuana treatment center licenses — plus four additional licenses for every 100,000 marijuana patients the state adds.

Currently, just 22 treatment centers are licensed even though the state has some 561,000 patients. The state should have about 15 more companies licensed to operate in the medical marijuana industry.

“A lot of the potential competition in the market has died off because of the delay,” Kottkamp said.

When asked why judges have taken so long to render a verdict, Craig Waters, a spokesman for the Florida Supreme Court, said he can’t comment on pending cases.

It’s not the first time this year the marijuana industry has been made to wait an inordinately long time for a Supreme Court decision. In April, the court all but killed a ballot initiative to legalize marijuana after 11 months of apparent deliberation.

Several possible reasons for the delay

There could be multiple reasons the court is taking so long to decide these cases. The coronavirus pandemic may have slowed the proceedings. Judicial politics are another possible explanation: It took months of wrangling before two of Gov. Ron DeSantis’ nominees — John Couriel and Jamie Grosshans — took the bench. One round of oral arguments for Florigrown was held in May 2020 without the two new justices. A second round was held in October 2020 with them.

Then there’s the Florigrown case itself. Justices are being asked to rule on numerous legal questions: Do Florida’s medical marijuana regulations conform to the constitutional amendment passed by voters in 2016? Is the state allowed to cap the number of medical marijuana licenses it gives out?

Even if it addresses those thorny questions, the court must decide on a solution to any problems it finds with the current regulations. That could be a difficult process, Kottkamp said. It’s possible justices are divided over various technical aspects of the ruling, and the factions are lobbying one another to join a given side.

According to a Supreme Court document which lays out the way the court operates, “In rare cases, the Court fractures so badly that no single Justice is able to obtain the concurrence of three other Justices in a decision...release of any opinion thus may be delayed for long periods of time while members of the Court seek a compromise.”

Is that what is happening with this marijuana case? On any given Thursday, Florida may soon find out.