Throwing growers into a lottery to see which five of 21 eligible nurseries will control Florida's medical marijuana industry has been a bone of contention since the Department of Health first insisted on it.
And now, sure enough, it's the lottery -- plus the proposed rule's failure to establish criteria for choosing not just eligible growers, but the best growers -- that is the crux of one nursery's 49-page challenge to the Department of Health's proposed rule, filed Monday in the state Division of Administrative Hearings.
Attorneys for Costa Nursery Farms of Homestead noted that the new statute never mentions such random selection as a lottery, but lists seven criteria to be used in awarding the five licenses lawmakers authorized for the cultivation, processing and dispensing of a medicinal marijuana product.
The proposed rule diminishes the importance of the statutory list of selection criteria, treating these as just eligibility requirements; and instead uses an unauthorized random selection to choose among eligible applicants. The proposed rule fails to provide any method to evaluate eligible applicants to determine whether an eligible applicant is superior, or to select the best applicant, write Stephen Turner and David K. Miller, attorneys for Broad and Cassel, which represents Costa.
"This (lawsuit) is imperative because selected applicants will be responsible to dispense prescribed medication, with greater risk of public injury if the selection process is not properly carried out," Turner and Miller write.
Not long after the Costa complaint was filed, a second challenge hit the Division of Administrative Hearings, this time from Plants of Ruskin,a Hillsborough County grower. Ruskin argues several of the restrictions placed on dispensing organizations conflict with existing zoning regulations and decisions delegated to local governments. The grower claims the restrictions are therefore "invalid exercises of delegated legislative authority."
Secretary of Health and Surgeon General John Armstrong had a statement ready for the press Monday. "A rule challenge is regrettable," Armstrong said. "The parties behind a challenge should explain why they are delaying the process of providing compassionate care to children with refractory epilepsy and patients with advanced cancer. The department remains committed to getting this product to the market as soon as possible for qualified children and families in Florida."
Many insiders predicted this delay, and not just because of the lottery.
The Department of Health wanted the lottery, remember, primarily to avoid lawsuits and delays, "because very sick patients are waiting." But here it is mid-September and "the process" is halted by lawsuits and delays anyway. It seems very sick patients will be waiting just as long, lottery or not.
The language of the bill approved by the Florida House and Senate states that only growers with an inventory of at least 400,000 plants and 30 years of uninterrupted experience would qualify to produce the low THC medical marijuana. The amendment to the bill was an eleventh hour bombshell by Rep. Matt Caldwell, R-Lehigh Acres, an initial sponsor of the measure, just prior to the House vote.
Caldwell never did explain who or what the forces were behind his amendment. But some insiders say without the safeguard of Caldwell's amendment, Gov. Rick Scott never would have signed the bill.
Rick Brown, owner of "eligible" Riverview Flower Farm, has told reporters the likely startup cost to produce the Charlottes Web strain of medical marijuana in Florida is about $10 million. It would need to be grown indoors to protect it from wind and storms, he said. Add to that cost a $5 million bond, which the bill requires -- providing security for the growing area and background checks for the owners and managers.
Brown said the indoor facility might not create vast additional costs based on use of existing facilities, but the business would need to forgo growing other profitable plants to make room for marijuana. Finally, the nursery producing the marijuana must hire a Florida physician as a medical director for the operation.
Those who are eligible for the lottery have no real incentive to keep costs low to patients, whose insurance -- for the foreseeable future anyway -- will not cover medical marijuana. There is no competitive bid process; there is only the lottery.
But Rep. Matt Gaetz, R-Fort Walton Beach, at the forefront of the bill in the 2014 Legislature, is less concerned about patient cost spiraling out of control than he is about delay.
"I've been concerned since day one about keeping this treatment affordable for patients," Gaetz told Sunshine State News. "But that's why we're giving out five licenses, five flavors to choose from. I believe those licensees will compete against each other in a free market. Competition drives down cost. That's certainly my hope."
Gaetz added, "The delay is something else. We'll have to see how these challenges play out. I hope they are resolved as quickly as possible, though I can't see a Jan.1 start."
None of the 21 eligible growers is rushing to lash out on marijuana production just yet. They are viewing a delay right now as almost welcome, because each is loath to move until after Nov. 4, when they will know if Amendment 2 has passed and is headed into the Florida Constitution.
If Amendment 2 passes the market becomes a free-for-all for growers. Competition will swell. Any nursery jumping into production of Charlotte's Web will be awash in competition because the approved medical marijuana will not be limited to the low THC strain. But establishing an "accepted medical culture" for a schedule 1 drug will be fraught with its own severe and lengthy delay-creating headaches.
As Gaetz said Monday afternoon, "Rep. (Katie) Edwards (Plantation Democrat and bill co-sponsor in the House) and I realize legislators will be refining Florida cannabis policy for decades to come."
Reach Nancy Smith at nsmith@sunshinestatenews.com or at 228-282-2423. Twitter: @NancyLBSmith
