Florida Medical Marijuana Licensure Update

22 June 2017 Publication
Authors: James A. McKee

After no bill was passed during the 2017 regular session, the Florida Legislature passed Senate Bill 8A in a special session and provided for the issuance of 10 new “Medical Marijuana Treatment Center” (MMTC) licenses to cultivate, process, and dispense medical marijuana. These licenses are in addition to the seven existing licenses issued to entities which are currently in operation. While the bill must be signed by the governor before it becomes law, Governor Scott has already indicated he will sign the bill.

Additional MMTC Licenses to be Issued Pursuant to Application Process

Senate Bill 8A provides for the issuance of 10 new MMTC licenses. Five of the new licenses are designated only for entities that applied during the initial 2014 round of applications and which meet certain specified criteria. The remaining 5 licenses are available to new applicants and will be issued by October 3, 2017, pursuant to an application process to be established by the Florida Department of Health. While the application form and scoring process will likely bear some resemblance to the process established in 2014 for the initial round of applications and licenses, because the 2014 application process predated Amendment No. 2 as well as the substantive changes made to existing law by Senate Bill 8A, the process will have to be updated in light of these new laws. The Department is expected to enact appropriate rules and regulations shortly after Senate Bill 8A is signed into law.

Application Requirements

Although the Department has not yet published the application form and rules to be utilized, applicants for MMTC licensure must demonstrate at a minimum:

  1. The applicant has been registered to do business in Florida for 5 consecutive years prior to submission of the application.
  2. Possession of a valid nursery certificate of registration issued by the Department of Agriculture and Consumer Services.
  3. The technical and technological ability to cultivate and produce marijuana, including, but not limited to, low-THC cannabis.
  4. The ability to secure the premises, resources, and personnel necessary to operate as a medical marijuana treatment center.
  5. The ability to maintain accountability of all raw materials, finished products, and any byproducts to prevent diversion or unlawful access to or possession of these substances.
  6. An infrastructure reasonably located to dispense marijuana to registered qualified patients statewide or regionally as determined by the department.
  7. The financial ability to maintain operations for the duration of the two-year approval cycle, including the provision of certified financial statements to the department.
  8. That all owners, officers, board members, and managers have passed a level 2 background screening.
  9. The employment of a medical director to supervise the activities of the MMTC.
  10. A diversity plan that promotes and ensures the involvement of minority persons and minority business enterprises, as defined in s. 288.703, Fla. Stat., or veteran business enterprises, as defined in s. 295.187, Fla. Stat., in ownership, management, and employment.

Preference Given to Certain Entities

One of the new licenses must be issued to an applicant that is (1) a recognized class member of Pigford v. Glickman, 185 F.R.D. 82 (D.D.C. 1999), or In Re Black Farmers Litig., 856 F. Supp. 2d 1 (D.D.C. 2011) and (2) is a member of the Black Farmers and Agriculturalists Association-Florida Chapter. Notably, applicants meeting these two requirements are exempt from the requirements that (1) the applicant has been registered to do business in Florida for the five consecutive years prior to submitting the application, and (2) the applicant possess a valid certificate of registration issued by the Department of Agriculture and Consumer Services.

Senate Bill 8A also requires the Department to give preference for up to two of the new licenses to applicants that demonstrate in their applications that they own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of marijuana.

Further Licenses to be Issued in the Future

In addition to the 10 new licenses to be issued by October 3, 2017, within six months after the registration of 100,000 active qualified patients in the medical marijuana use registry, the Department shall license four additional MMTCs. Active qualified patients on the registry currently number between 15,000 and 20,000. The Department is also directed to license four additional MMTCs within six months of the registration of each subsequent 100,000 active qualified patients.

Additional Requirements After Licensure

Successful applicants will be required to maintain compliance with the representations made in their applications, as well as with applicable law. Notably, applicants selected for licensure must (1) post a $5 million performance bond issued by an authorized surety insurance company rated in one of the three highest rating categories by a nationally recognized rating service, or (2) provide an irrevocable letter of credit payable to the Department or provide cash to the Department. Department rules currently require such bonds to be posted within 10 days of licensure.

Persons and entities interested in obtaining licensure as an MMTC should keep in mind that although the cultivation, processing, and dispensing of medical marijuana is legal under Florida state law, such activities remain illegal under federal law.

For more information, please contact:

James A. McKee
(850) 513-3378
jmckee@foley.com  

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