Florida Supreme Court Removes Injunction on Issuance of New Cannabis Licenses: Up to 16 New Licenses may be Potentially Issued.
By Ryan Fingerhut
With currently less than 22 licensed and active cannabis companies in the State, and a recorded $1.23 billion in recorded sales for 2020, many cannabis entrepreneurs and investors have viewed Florida as one of the hottest and most underserved medical cannabis markets in the nation. However, since 2019 the State’s licensing process has been in a standstill due to a temporary legal injunction filed in the case, Florida Department of Health v. Florigrown, LLC. However, a ruling by the Florida Supreme Court may be about to change all of that and kick-off what may be one of the most competitive cannabis licensing processes in the country.
In Florida Department of Health v. Florigrown, LLC, Florigrown, LLC and Voice of Freedom, Inc. (collectively “Florigrown”) petitioned a Florida court for a temporary injunction against the issuance of new Medical Marijuana Treatment Center (MMTC) licenses due to a pending suit they were making against the Florida Department of Health (Department). At issue was the constitutionality of Florida’s current medical licensing process under Fla. Stat. 381.986(8), which requires in part (1) all MMTC’s to be vertically integrated, meaning an applicant must cultivate, manufacture, distribute, and dispense cannabis products, as a condition of licensing and (2) that a small number of licenses be issued at any time. While initially the petition for this injunction was denied, the trial court later issued the injunction based on the Department’s Office of Medical Marijuana Use’s (OMMU) intention to start a new licensing round. The Department appealed the injunction, and the case made its way up to the Florida Supreme Court.
Yesterday, May 27th, 2021, after nearly 2 years of licensing limbo, the Florida Supreme Court has finally come to a decision. The Supreme Court has ruled that Florigrown’s constitutional challenges to the Florida cannabis licensing laws do “not have a substantial likelihood of success on the merits” and has directed the lower courts to vacate the injunction. This not only strongly indicates that Florigrown’s case is likely to lose on its constitutionality grounds at trial (still pending), but also immediately terminates the injunction.
The ending of this injunction, mixed with the fact that FL law requires the Department to issue 4 licenses within 6 months of each additional 100,000 qualified patients being registered in the State (the official OMMU count as of April 2021 is 540,239), is the reason for all of the excitement. Without a legal stay in place, the Department is now obligated to begin a new licensing application round within the year. Considering they haven’t issued a MMTC licensing application round since 2015, that seems like a tall order, but the Department has likely been preparing for this day, and many insiders think an application is likely to drop in a matter of months, if not weeks.
What is certain is that this application process will be one of the most difficult in the nation. With one of the most lucrative medical cannabis markets on earth, and with MMTC licenses having sold for over $60,000,000 in the last year, competition is expected to be fierce. Add to this the fact that a vertical integration requirement means an applicant must demonstrate proficiency, funding and infrastructure capable of creating a stand-alone operation without any outside plant touching wholesalers or retailers, and it is easy to see why only the most sophisticated and well prepared companies and application teams are likely to win a license. However, with a valuation of $60MM just for a paper license, it is likely that many will try.
Ryan Fingerhut
Partner / Director of Client Services
Ryan Fingerhut, a former practicing attorney, has devoted himself full time to the cannabis industry since 2014. Ryan focuses on cannabis consulting, licensing and compliance. Ryan and his team boast a 99% track record in license applications, with over 100 state and local cannabis licenses won in multiple states. He also boasts a perfect track record in relation to compliance with cannabis regulations. Ryan participated directly in the management of several cannabis businesses before entering the cannabis consulting business.
About Global Go
Global Go provides sophisticated consulting services to the global cannabis and hemp industry. In tandem with strategic allies around the world, Global Go serves clients throughout the world from offices in Austin, Bogota, Chicago, Cyprus, Denver, Johannesburg, London, Los Angeles, Mexico City, New York, Palm Springs, Phoenix, Quito, São Paulo, Silicon Valley, Toronto, and Zurich. Powered by a team of cannabis industry pioneers and world-class consultants, Global Go helps leading cannabis funds and companies assess and enter new markets; acquire assets; raise capital; launch new product lines; improve SOPs; comply with regulations; implement technology and security systems; find talent; diagnose and execute solutions to growth obstacles; and apply for cannabis licenses (with a 99% success rate on over 175 cannabis license applications across the United States). Learn more at https://globalgo.consulting.