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Adult Use Struck Down, FL Medical Marijuana Treatment Centers Still Vertically-Integrated

Adult Use Struck Down, FL Medical Marijuana Treatment Centers Still Vertically-Integrated

Posted by Lori Ann Reese on 05/19/2020 in Florida

Updated on May 27, 2020.  Medical content reviewed by Dr. Joseph Rosado, MD, M.B.A, Chief Medical Officer

Florida State Flag

There has been a long drawn out fight in the Florida Legislature, over SB 1860. Also called the “Adult Use” Cannabis Law, it was a series of proposed changes to the medical cannabis industry in Florida that was struck down.

If SB 1860 had passed, it would have meant some big changes to the medical marijuana industry in Florida. It would have ended Florida’s ‘vertical integration regulatory scheme’ for the industry. Second, it would have opened up regulated cultivation to those eager to enter the market.

Members of the medical marijuana business community oppose the vertical integration requirements. Is it “unconstitutional?” Can we tell an American business and owner, that he or she must be both retail and production in the supply chain?

Currently, Medical Marijuana Treatment Centers (MMTCs) in Florida must have:

  • Cultivation Authorization
  • Processing Authorization
  • Dispensing Authorization

That means that all aspects of the medical cannabis business (supply, manufacturing and serving patients) are owned by the Medical Marijuana Treatment Centers. This as you can imagine, is expensive for the Medical Marijuana Treatment Center. The ability to outsource cultivation for instance, would save MMTCs a great deal of expense. But that is currently prohibited.

The complaint stems from Florida regulations which many business owners feel are stifling. The business growth of Medical Marijuana Treatment Centers stifles due to burdensome expenses. Some MMTCs would rather focus on running the retail and patient therapeutic services. Then outsource help for both the cultivation and processing functions of the business.

And they are angry that they have not been given the opportunity to delegate certain aspects of their operation. That would see more specialized medical cannabis agriculture and manufacturing businesses in Florida.

The law was struck down and died in the Florida Senate, under Finance and Tax. It is supported by State Senator Jeffrey Brandes, who has stated that “adult use in Florida is inevitable.” There is also a Supreme Court Case in progress. The cap on business licenses, and adult use pending in 2020. Florigrown v. The Department of Health continues to proceed at time of writing.

Why Does Florida Legally Stand With the Vertical Integration Regulatory Requirements?

Florida watched other States determine the legislative processes required to legalize medical marijuana. Marijuana use in Florida for recreational purposes is illegal. But the medical cannabis industry has grown quickly since it was authorized in 2014.

The priority for the State of Florida is ensuring that several principals are met. Medical marijuana certification offices and dispensaries must ensure that:

  • Patient safety comes first with restricted levels of THC mandated for medical users.
  • Caregivers be required to complete the same certification process, to get a medical marijuana card for a family member.
  • Medical grade marijuana is safe and produced in a method that preserves the integrity of the cannabis for therapeutic use. This assures that no harmful additives are used in the manufacturing process. Currently by limiting dispensaries to selling only the cannabis they have produced.

With the Adult Use SB 1860 struck down, it will not be enacted for 2021 as many dispensary owners in Florida hoped. It will be resubmitted to the Florida Legislature again in 2021, by a growing group of owners and associations in the state.

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