Florida appeals court nixes medical marijuana caps, vertical integration

Florida marijuana court ruling, Florida appeals court nixes medical marijuana caps, vertical integration

A Florida appellate court ruled that the state’s medical cannabis licensing system is unconstitutional, setting the stage for greatly expanded business opportunities in one of the country’s fastest-growing markets.

Found unconstitutional were legislative measures that imposed license caps and vertical integration.

“The takeaway here is that while the decision will most likely be appealed to the Florida Supreme Court, this opens the door to the possibility of the Florida market opening up to more players, with the barriers to entry being lowered,” Sally Peebles, a cannabis attorney with Vicente Sederberg LLP in Florida, wrote in an email to Marijuana Business Daily.

Peebles added that if vertical integration is eliminated, it will be less expensive to enter the market, “allowing more mom-and-pops to enter the market.

In addition, more licenses will be issued if the cap is lifted, according to Peebles.

That would create a “more competitive environment,” leading to more innovative products and, eventually, lower prices, she contends.

Jeffrey Sharkey, executive director of the Medical Marijuana Business Association of Florida, concurred.

“If upheld, this ruling could dramatically change the medical marijuana regulatory landscape in Florida,” he wrote in an email to MJBizDaily.

As of July 5, six vertically integrated MMJ businesses operated 120 of the state’s 142 dispensaries.

The 2019 Marijuana Business Factbook projects that MMJ sales in Florida will reach $425 million-$525 million this year, up from $225 million-$300 million in 2018.

The ruling by the First District Court of Appeal won’t have an immediate impact, even if the state decides not to challenge the decision.

While the appellate court affirmed a lower-court decision, it differed in that it allows the Florida health department time to establish various standards before issuing additional MMJ licenses.

Jeff Smith can be reached at [email protected]

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6 comments on “Florida appeals court nixes medical marijuana caps, vertical integration
  1. Rick on

    Legislators ought to know by now what will happen if they try and sneak around the will of the voters in their state. I hope this does open a pathway for mom & pop stores and other smaller merchants because I believe that’s what the voters originally wanted.

  2. Benji on

    Rick, agree with you there. I’m also glad they’re acknowledging that competition is the mother of innovation, lowering the barriers of entry is good for the consumer and will ultimately bring prices down.

  3. Jim on

    I was especially interested to hear some speculation/discussion on how the Florida Supreme Court may come down on this.

  4. Michael on

    Yes it is about time the State of Florida is listening to what we voted for and open the market to individuals whom have waited just to have the opportunity to participate in our MMJ market. Maybe the State can once and for all level the playing field.

  5. Jo on

    Courts will never favor the people. In the end another court will give the trash in office what they want. You think the will of people is ever considered, ha! How naive, just look at Kristi Noem. The people vote for legal weed and she orders state officials to overturn it based on bogus technicality which a first year law student can tell you doesn’t hold water.

    When rubber meets road they will ignore all votes and enforce their own set of rules. The people be damned.
    The only reason they will open Florida up is because their friends are ready to pounce on the market. Just watch, the politicians friends will all have interests in emerging mmj markets. Just like in Oregon, Washington, Colorado. They change rules over the first several years forcing many out of business and you will see 4-6 major companies start buying up all the small ones that find themselves hammered with new fees or expenses to keep themselves within legal rules.

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