When Florida voters passed Amendment 2 with a 71 percent approval rate last November, they thought they were getting a widened medical marijuana marketplace that a large new swath of patients could access with less regulatory interference.
But the first set of new regulations proposed Tuesday by the Florida Department of Health would reinforce the preexisting regulatory structure, which allowed only a handful of farms to produce low-THC product for the Florida marketplace.
“I’d say the expected result was what just happened,” California attorney Matt Harrison told Watchdog.org. Harrison helped draft California’s Prop 64, which decriminalized adult use of cannabis in the state.
“In the political reality and how administrative agencies work, it’s very typical that they would do something like that because it’s the whole hammer and nail syndrome, where they would be given this authorization to regulate this new area and they would imagine that it gives them some sort of mandate to do it the exact same way they did it previously.”
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Medical marijuana has been a hot topic in Florida for several years. In 2014, a ballot measure very similar to 2016’s successful Amendment 2 failed, but a decriminalization bill passed the legislature: the Compassionate Medical Cannabis Act of 2014. The bill decriminalized low-THC cannabis use for a limited number of patients under strict guidelines. It also allowed for there to be only five carefully regulated medical marijuana dispensaries in the state.
The 2014 bill also established a system in which the marketplace was vertically integrated. Under this structure, someone has to not only grow the product, but process it in-house and sell it.
“I don’t think the amendment calls for or contemplates that it has to be a vertically integrated structure, which is currently being proposed and which we currently operate under,” State Sen. Jeff Brandes, R-St. Petersburg, told Watchdog. He identified vertical integration as one of the problems with the existing Florida medical marijuana market.
“If you’re good at growing, cultivating marijuana, you should be able to grow the product, but that doesn’t mean necessarily that you need to be good at retail. Conversely, if you’re good at retail, you don’t have to be necessarily good at growing.”
He argued the current proposal smacks of industry insiders trying to limit market access. “They want to control certain regions, they want to be able to limit competition, limit who can actually grow, produce and ultimately retail, sell medical marijuana in the marketplace. That is, by definition, a cartel.”
A system that artificially contracts production could mean problems for the expanded pool of patients for which Amendment 2 opened the floodgates.
“We are talking about a situation where there is going to be significant demand in the marketplace, and there is very likely not going to be sufficient supply,” Paul Armentaro, deputy director of marijuana law reform group NORML, told Watchdog.
Harrison concurred. “If you’re looking to provide a product to a larger subset of the population [vertical integration] is something that could cause a lot of bottlenecks in supply and is not something that would be considered efficient.”
However, Harrison believes the increased demand for product might help evolve the regulations.
“Ask the experts, anybody who’s familiar with the types of conditions the prior regime qualified for and what Amendment 2 is clearly encompassing or intending to encompass. It would create a need to supply the market in a new and different way.”
Of course, Florida lawmakers don’t need to reinvent the wheel here, with two decades of various forms of legal marijuana precedent to draw from in other states. Armentaro mentioned Colorado and Oregon as examples of more sophisticated marketplaces that Florida legislators could draw from, although the regulatory process has impeded the marketplace in those states as well.
Armentaro added that another provision of the proposed regulations goes against the promise of increased access of A2: the proposed set of qualifying medical conditions. He argued “the proposed rules take discretion away from the physician and instead leave it up to regulators to determine 10 arbitrary conditions.”
“What is not included in these conditions is chronic pain, the single condition for which the most patients currently use medical marijuana and the condition for which there is the largest volume of gold-standard clinical evidence showing that marijuana is safe and effective for,” Armentaro said, citing a recently released study by the National Academies.
In addition to state regulatory agencies, cities and municipalities are throwing moratoriums into the gears of Amendment 2, justifying the practice by citing the regulatory dispute over how the amendment will be enacted. According to Harrison, this is no surprise.
“It’s what happened in Colorado, too. It’s a really convenient excuse when there’s regulatory uncertainty or policy uncertainty and so the local governments kind of seize on that and say well we don’t want it unless someone else figures it out. And so the question is who does the figuring out.”
Another complicating issue involves Florida’s snowbirds and reciprocity between states. Jodi James, executive director of the Florida Cannabis Action Network, told Watchdog, “I have thousands of people every year who come down from Michigan every year, Michigan, Ohio Illinois, Minnesota… they are all medically legal states. These people who come down for four months a year cannot use their medication legally in the state of Florida. There is no reciprocity for them.”
Legislators weigh in
State Sen. Bradley, R-Fleming Island, introduced a bill this month, proposed several days after the DOH guidelines were released, addressing some of the issues with the Department of Health rules.
The state currently licenses seven dispensing organizations. Bradley’s bill would increase that cap to 20, once there are 500,000 registered medical marijuana patients. However, it does not disrupt the vertically integrated dispensary structure.
The bill also explicitly expands access to patients with “chronic non-malignant pain,” and returns some of the discretionary power the DOH had assumed back to physicians while lowering the standards for becoming licensed to prescribe medical marijuana.
Another view for what Florida’s medical marijuana regulatory regime could look like will come from Brandes, who told Watchdog that a counter-bill with a more free-market slant will be introduced shortly.
“We need a structure that is something with high standards, high insurance requirements, high bonding requirements, that are letting legitimate players pick what portions of the market they actually want to participate in.”
He added the need to set standards that were “reasonable and rational” for what type of training physicians should undergo before being allowed to prescribe, which the Bradley bill likewise addresses.
The need for physician training was echoed by Armentaro, who added that many physicians hadn’t been previously exposed to medical marijuana education.
“Of course, more hurdles put in place could potentially limit the pool of doctors willing to participate in this system. For better or for worse, physicians are the gatekeepers.”
At the moment, only 1 percent of Florida doctors are licensed to prescribe medical marijuana.
Brandes said the upcoming regulatory dispute would boil down to a battle of ideas over what type of say government regulators should have over the marketplace.
“My hope is that the house, the governor and the FL senate will be consistent in its free-market philosophy on this topic,” Brandes said. “That they will make sure that whatever they do, that they’re allowing all Floridians to participate, not limiting it to a handful of folks who have the money to stop them at the legislative level.”