Lawsuits break out in Florida over medical marijuana licenses

Florida has limited its medical marijuana production to only five companies in efforts to curbs its growth, triggering a logjam of legal disputes.

A Florida law providing protections to just five medical marijuana growing operations, in what may become one of the nation's largest markets, has instigated a rush of legal challenges from dispensaries eager to enter the Sunshine State's green rush. 

In November, health officials selected five companies to grow, manufacture, and dispense cannabis products to a limited number of patients who qualify with certain medical conditions under the state's medical marijuana program. In March, Gov. Rick Scott (R) signed a bill, HB 307, that also allows patients who have been medically diagnosed with terminal illnesses to access medical cannabis oil that contains low amounts of THC – the well-known chemical compound in cannabis that makes users feel high. Florida is also preparing to vote on a broader medical marijuana law this November.

Florida is poised to become a major marijuana market, with one analyst predicting $1.5 billion in sales by 2020 – growth due, in part, to older residents seeking medical treatment. 

The state's cannabis growing and dispensing companies are eager to make early headway in the green rush. With so few growing licenses initially available, companies that weren't selected by the Department of Health in the first round are are suing in order to gain entry into Florida's market this time around. And with HB 307, which would allow for three more growing licenses after the state has registered 250,000 patients, they might have a shot.

Already, however, licensed growers are navigating a legal limbo resulting from lawsuits carried out by losing applicants who were initially not selected to participate in the state's medical marijuana program; more than 20 organizations initially applied. The new law requires Florida's Department of Health to grant applications to organizations who win. 

The law also requires that any grow-operation with the top score in its region must receive a license, even if doing so contradicts the Health Department's initial decision. 

"Does this set up a state-sanctioned drug cartel, which is what it is?" asked state Sen. Jeff Brandes (R) from St. Petersburg, according to the Miami Herald. "Yes, it does. You're basically mandating that five families get wealthy." 

Challenges to the Department of Health's process for awarding licenses has snarled the legalization process. One losing organization, whose application was rejected because it was submitted 27 minutes later than the deadline, is now arguing that it should be licensed because health officials did not also strictly apply the rules for other applicants.  

So far, only San Felasco, a nursery located in Gainesville, has received a new license thanks to the new provisions. 

San Felasco, which scored highest in the Florida's northeast region, was initially rejected for a license because an old drug crime from more than a decade ago involved the company's director of research and development, according to the News Service of Florida. 

Based on the "San Felasco provision," another company called McCrory's Sunny Hill Nursery claims it should have scored highest in Florida's central region.

The Department of Health is handling various lawsuits based on these kinds of scoring comparisons of winners and losers in each region. Florida has now spent almost $500,000 on private lawyers representing the department in lawsuits filed by losing applicants, delaying the implementation of Florida's 2014 law that heralded medical marijuana into the state.