4 things to watch for at Friday’s Charlotte’s Web hearing

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Editor’s Note: This article is cross-posted on PoliticsOfPot.com.

Florida regulators are preparing for the launch of a new industry. Starting in January, doctors will be able to order a medicinal marijuana product for a select group of patients suffering from muscular diseases including seizures and Lou Gehrig disease.

The Department of Health has scheduled a public hearing Friday for proposed regulations to implement Florida’s Charlotte’s Web law, officially known as The Compassionate Medical Cannabis Act of 2014.

A report by state economists speculate up to 150,000 patients could be buying medicinal marijuana by the end of the 2015.

And that number could grow because of a broader marijuana initiative is on the November ballot. If the proposed constitutional amendment is approved Florida’s medicinal market would grow and some folks are not waiting for the ballot or regulations to be approved before investing money in the new industry.

At two previous public hearings on rules, stakeholders have consistently criticized four provisions in the regulations DOH is proposing for  the medicinal marijuana industry. Here are the expected flash points for Friday’s hearing.

A lottery

The measure approved by the Legislature and signed by the governor authorizes five licenses for cultivating, processing and dispensing oil from a low-THC strain of marijuana. It divided the state into five regions with one license for each region.

There are 72 eligible growers who can apply as a nursery or part of an entity for one of the licenses. To be eligible an applicant must be the owner of a nursery licensed by the Department of Agriculture for at least 30 years and has an inventory of at least 400,000 plants or the applying entity must include an eligible grower as part owner.

If the department determines there are more than one eligible applicant in a district then a lottery will be held to award the license.

“I would like to see the divorce from the lottery because sometimes a divorce is what’s best for the children,” said Ron Watson, who represents three medicinal marijuana clients.  Watson has argued for a merit selection process. He said one company he is working with wants to do an indigent care program and such plans will not be taken into consideration.

“I just wish they would pick the best applicant,” said Watson. “Maybe a lottery will get us to the end quicker but it’s going to be challenged.”

Application definition

Florida lawmakers wanted to ensure that if there was any economic benefit from a change in marijuana policy then Florida businesses would reap it and not cannabis carpetbaggers. They tilted the playing field in favor of long established nurseries.

But the department is proposing allowing a nursery owner to apply as both an individual and as a grower. The draft rule defines an applicant as an entity with at least 25 percent ownership by a nursery. The provision creates a loophole where a nursery owner could be part of numerous applications.

Louis Rotundo represents the Florida Medical Cannabis Association. He said combined with a lottery the loophole allows the selection process to be unfairly “jimmied.”

“This is very badly done,” said Rotundo. “Let’s say there are four applicants in a district. If you and I applied together as partners in each other’s nurseries then my odds of winning is 50 percent.”

Retail location

The department reads the law as authorizing it to restrict the sale of medicinal marijuana to one location per license. Stakeholders say DOH’s interpretation is not logical, reasonable or practical.

“I don’t think we can have only five dispensaries in the state,” said Watson.

A transportation plan for delivery service is included in the application but lobbyists say DOH is just asking for trouble if they plan to have marijuana delivery drivers cruising the state delivering product and collecting cash.

Zoning

The rule sets up an inherent conflict within itself and local zoning authority. Lawmakers wanted a vertical integrated system – cultivating, processing, and dispensing all done by one entity. DOH proposes it all takes place on one contiguous property.

Problem is retail and agriculture are separate zoning classifications.

“Somebody is going to get sued,” said Rotundo. “I do not believe it is in the state’s best interest to have the department create zoning requirements and then declare that local zoning prevails and then declare that the applicant must do certain things at his facility which may not be allowable under local zoning.”

Friday’s hearing may be the public’s last chance to comment on regulations for a medicinal marijuana industry.  A lot interest is expected.  Industry experts estimate a Florida medicinal marijuana market could generate from $700 million to more than a billion dollars of economic activity annually.  

If the department does not act on the testimony submitted and the Joint Administrative Procedures Committee certifies its work then the rule will be filed with the Department of State and it becomes effective 20 days later if there is no challenge.

“Advocates want their voice to be heard, even if it’s futile with respect to this rule,” said Jeff Sharkey of the Medical Marijuana Business Association of Florida.

“(Testimony) may set the stage for the basis of a rule challenge or a message sent to legislators and policymakers that the rule, as designed, does not meet the needs of patients, communities or businesses trying to create an efficient and effective dispensary system.”

Friday’s hearing begins at 9:00 a.m. at the Betty Easley Conference Center in Tallahassee.