Judge chides Florida health officials on marijuana licenses

TALLAHASSEE - An appeals-court judge this week chided Florida health officials for not following up on promises to grant additional medical marijuana licenses as required by state law, saying potential applicants are "understandably frustrated" and offering a legal playbook for entrepreneurs who have been shut out of the cannabis market for years.

First District Court of Appeal Judge Ross Bilbrey's shot across the bow came as Gov. Ron DeSantis' administration continues to delay the issuance of new licenses. Florida has 22 medical-marijuana operators.

A 2017 law, which created a framework for the state's medical marijuana industry, required the Department of Health to grant new licenses as the number of authorized patients increases. With more than 700,000 patients, the state should have issued at least another 22 licenses to keep up with the population of patients --- doubling the number of operators in Florida.

But the DeSantis administration has left the application process in limbo since the governor took office in 2019.

DeSantis' office has blamed the delay on litigation over the 2017 law, but a Florida Supreme Court decision upholding the statute was finalized last year.

Bilbrey on Wednesday called out the state's foot-dragging, as he issued a concurring opinion in an appeal by Louis Del Favero Orchids, Inc., which has long sought a license for what is known as a medical marijuana treatment center.

Bilbrey and two other judges on the Tallahassee-based appeals court, siding with the Department of Health, upheld a lower-court ruling that dismissed the company's lawsuit.

But Bilbrey --- who has repeatedly questioned Department of Health lawyers on the delay in accepting new license applications --- also took health officials to task in the concurring opinion.

Del Favero "is understandably frustrated with the ongoing failure of the Department of Health to open the application window and issue Medical Marijuana Treatment Center licenses as required by the Florida Constitution," Bilbrey wrote, referring to a 2016 constitutional amendment that broadly legalized medical marijuana.

Bilbrey noted that the health department issued an emergency rule in September 2017 that laid out the application process for potential medical-marijuana operators.

"Almost five years after the emergency rule was issued, the MMTC license application window remains closed," Bilbrey, who was appointed by former Gov. Rick Scott, said.

The judge also pointed to assurances that a Department of Health lawyer made more than two years ago during oral arguments in a lawsuit filed by MedPure, LLC, when Bilbrey was a member of a separate three-judge panel.

The health department's general counsel told Bilbrey at the time that the agency had put the licensure process on hold while awaiting the outcome of a lawsuit filed by Tampa-based Florigrown challenging the 2017 statute.

"We want to open that window. We have wanted to for three years. And we are preparing for what will happen after the Florigrown decision ... We will get more medical-marijuana treatment centers licensed," attorney Louise St. Laurent told the panel on March 23, 2020.

But the Florida Supreme Court ruled against Florigrown and upheld the medical-marijuana law more than a year ago "and the MMTC license application window remains closed," Bilbrey wrote on Wednesday.

"Aggrieved potential MMTC licensees are not without a remedy if the department refused to comply with its duties under the Florida Constitution," he cautioned.

The judge suggested that potential applicants should consider filing a legal challenge to force health officials to open the application process.

"I respectfully suggest that the department comply with its representations at the MedPure oral argument --- either open the application window referenced in the emergency rule or promulgate a superseding rule allowing for MMTC license applications. Otherwise, it may be necessary for a potential licensee to 'seek judicial relief to compel compliance with the department's constitutional duties,'" the judge wrote, quoting from the medical-marijuana amendment.

With the application process thwarted, Del Favero and other businesses have gone to court in recent years as they seek to plant cannabis stakes in Florida. Del Favero has filed a number of legal challenges in thus-far failed attempts to get a license.

One strategy has involved companies applying for licenses --- although health officials had not opened the application window and were not accepting licenses --- and initiating legal challenges when the health department did not grant the licenses.

Lawmakers in 2014 passed a measure that allowed a relatively limited number of patients to receive low-THC cannabis products. Medical marijuana companies that are doing business in Florida were part of an initial group of applicants in 2015 that were granted licenses to sell low-THC cannabis.

The health department in March accepted applications for a license earmarked in the 2017 law for a Black farmer. But the state has not granted the license, which Bilbrey cited in a footnote.

The footnote referred to a recent news story about the months-long wait for the Black farmer license.

"The article asserts that the delay in issuing licenses to other MMTCs has allowed three MMTCs to control two-thirds of the Florida medical marijuana market," Bilbrey wrote.

Bilbrey's critiques reflect the impatience of investors from around the globe eager to set up shop in Florida.

Along with the state having a growing number of medical marijuana patients, a political committee recently launched an initiative, aimed for the 2024 ballot, that would legalize recreational marijuana use for adults.

The state's cannabis market "is strong, and there are a number of entities looking to enter the market," attorney Jim McKee told The News Service of Florida on Thursday.

"As a result, there is a significant amount of interest in the additional licenses that will be available for issuance once an application process is opened," McKee, who represents a number of medical-marijuana operators and applicants, said. "The OMMU (Office of Medical Marijuana Use) is continuing to work on the application form to be utilized for the process, but there is growing frustration among potential applicants that the application process has not yet begun. Judge Bilbrey's statements are a recognition of that fact."

Agriculture Commissioner Nikki Fried, who lost the Democratic gubernatorial primary last month to Charlie Crist, on Thursday also blasted the DeSantis administration for its handling of the medical-marijuana program.

Fried, a former medical marijuana lobbyist, called the delay on the Black farmer license a "miscarriage of justice" and said the DeSantis administration should act on the additional licenses as well.

"Shamefully, year after year, it has been delayed with excuse after excuse after excuse, creating a less equitable and less competitive marketplace," Fried told reporters.