Florida cannabis lawyerA great battle has been won in Florida for a more comprehensive medical marijuana program thanks to Florida voters overwhelmingly voting for Amendment 2. But the war still remains in that Amendment 2 is a very short piece of legislation that gives huge power to Florida’s Department of Health (DOH) to make rules tfor Florida Medical Marijuana Treatment Centers (MMTCs). Amendment 2 simply states that DOH must come up with regulations for, among other things, “[p]rocedures for the registration of MMTCs that include procedures for the issuance, renewal, suspension and revocation of registration, and standards to ensure proper security, record keeping, testing, labeling, inspection, and safety.” That’s it. After writing “Florida Legalizes Medical Marijuana, So Now What? Here’s the 4-1-1,” I’ve been getting many calls from Floridians who want a license to run an MMTC, but many questions remain about who can participate in Florida’s new medical cannabis industry and how participating businesses can be run and financed, because the Amendment is silent on these topics.

The only reference Florida has for previous DOH rule making on medical marijuana is its 2014 Compassionate Medical Cannabis Act (i.e., the “Charlotte’s Web law”), which has since been amended. Upon its passage by the legislature, that law contained way more detail than Amendment 2 on who could operate and own a Dispensing Organization, and it set forth qualification thresholds DOH could not change through rule making. The Charlotte’s Web “final” DOH rules can be found here, and you can read our analysis of DOH’s initial rules here.

Here is a run-down on some of what the Amendment does not cover and where DOH (and, more likely, the Office of Compassionate Use) will need to fill in the blanks for better or worse:

  1. Existing Charlotte’s Web nurseries. Since Amendment 2 pretty much puts DOH in full charge of the fate of Medical Marijuana Treatment Centers, the question becomes whether DOH will only allow the existing Charlotte’s Web nurseries to run all MMTCs or whether DOH will expand the program to allow for a more open medical cannabis market with a diverse range of Medical Marijuana Treatment Center operators. Because Amendment 2 does not say that this sort of exclusive situation cannot happen, and because we all know these nurseries have tremendous influence with the Office of Compassionate Use, it is at least possible that these very same nurseries will walk off with all of the licenses for Florida’s Medical Marijuana Treatment Centers. If DOH follows the path of Charlotte’s Web and engages in negotiated rule making for Amendment 2, you can bet these nurseries will at minimum have big seats at the table.
  2. Limitations on number of MMTCs and vertical integration. The Amendment doesn’t dictate that DOH must limit the number of MMTCs in the state, but I see DOH strictly limiting the number of MMTCs to ensure DOH control and oversight. There’s also the question of vertical integration and whether the DOH will DOH force Florida’s Medical Marijuana Treatment Centers to be vertically integrated. Or will DOH create and issue different kinds of cannabis licenses and registrations without tied-house restrictions for cultivation, manufacturing, and dispensing? If DOH opts for mandatory vertical integration, expect to see many would-be marijuana operators lose interest in Amendment 2 because the costs and the difficulties of vertical integration will prove impossible or undesirable for so many.
  3. Residency. The Amendment does not have an explicit residency requirement. The MMJ industry in many states has suffered much heartburn when marijuana operators have to prove (and sometimes fail to prove) that their financiers or fellow owners have spent a certain amount of time in the state. Florida’s Charlotte’s Web law has no explicit residency requirement, but since it mandated that only Florida-registered plant nurseries existing for thirty or more years with the capability of cultivating more than 400,000 cannabis plants could participate, it essentially did have a residency requirement. Assuming DOH doesn’t just turn over all new Medical Marijuana Treatment Centers to these nurseries as well, it remains to be seen as to whether Florida will allow out of staters to enter its cannabis market.
  4. Financing. The Amendment is also silent on financing for MMTCs and so we do not know whether Florida will cap financing or restrict certain kinds of financing.
  5. Criminal background checks. The Amendment does not tell us what kind of criminal history Florida Medical Marijuana Treatment Center owners and managers can or cannot have. In most marijuana states, a felony conviction within the past ten years (or, sometimes, at all), makes you ineligible to own or manage a marijuana business. Since Florida hasn’t been the friendliest state when it comes to marijuana-related crimes, I am expecting it will implement fairly aggressive criminal background standards.
  6. Corporate entities. There’s no mention in the Amendment as to whether Medical Marijuana Treatment Centers can be either for-profit or not-for-profit. Some states care about this distinction, but the trend is to allow marijuana businesses to be for-profit companies. Surely, when DOH defines “MMTC applicant,” it will tell us what kind of corporate entities can participate in its medical cannabis program, but we likely won’t know this before the first set of DOH rules comes out.
  7. Application, scoring, and application fees. We can only guess at what the application for a Florida Medical Marijuana Treatment Center will look like and the information it will require. Having helped clients with competitive licensing applications in New York, Minnesota, Maryland, and Nevada (and less competitive licensing applications in a host of other states), I can tell you that if DOH doesn’t hand all of the keys to Amendment 2 over to the Charlotte’s Web nurseries, its MMTC applications are likely to be pretty intense. The application for the Charlotte’s Web nurseries was no picnic and I don’t see DOH being any less restrictive or invasive for MMTC applications. There’s also the issue of how DOH will choose MMTC operators. In Charlotte’s Web, DOH first tried to implement a lottery system but got sued and lost. DOH then ended up going with an obtuse scorecard that allegedly ranked applicants based on merit (that also got them sued, but they prevailed on that system). Regarding any MMTC application fees, the Amendment says nothing. But you can be sure DOH will implement an application fee under Amendment 2. Charlotte’s Web applicants had to pay a $60,063 non-refundable application fee, but I anticipate the fee for Medical Marijuana Treatment Centers (hopefully) being lower since considerably more applicants will be involved. Florida might also institute other threshold financial requirements to create barriers to entry for MMTC applicants. For example, the Charlotte’s Web program required a $5 million performance bond prior to registration as a Dispensing Organization.
  8. Buffer requirements and “regional restrictions.” The Amendment is also slient on whether MMTCs have to be located a certain distance from sensitive uses like schools or playgrounds. The buffer for these things has varied from state to state (usually from around 500 to 1,000 feet as the crow flies) and cities and counties usually have a say on this also. At one point in the initial draft rules, Dispensing Organizations under Charlotte’s Web could not “be located within 500 feet of any public or private school that existed prior to the date of the dispensing organization’s application,” but that buffer requirement didn’t make it into the “final” rules. MMTCs may also see regional restrictions like nurseries saw with Charlotte’s Web where those nurseries are limited to serving the five regions of Florida. If the goal of Amendment 2 is to provide better and more convenient access to cannabis for medical use, the five-region plan of Charlotte’s Web will likely not be the way to go.

There are a whole host of other issues not covered in the Amendment with which DOH will have to wrestle, but the above are some of the most important, and they constitute plenty to get you started in planning for your application and your eventual cannabis business.

Be sure to stay tuned as DOH gears up for Amendment 2 rule making.

California cannabisWhat a long, strange road the election has been. After a wild and unpredictable night, marijuana may not be the first thing the media discusses in the election’s wake. Still, it cannot be overstated how successful the evening was for marijuana legalization. Cannabis ballot measures won in eight out of its nine races. This is unprecedented, and it shows the extent to which cannabis legalization is a bipartisan issue.

The below is a state-by-state rundown of where things ended up. For a comprehensive report on California cannabis and on what it will take to participate in its new adult-use cannabis industry, go here. And for the same on Florida’s new medical cannabis industry, go here.

Arizona — Lost — Proposition 205, which sought to legalize marijuana for all adults and license its production and sale, did not pass. Prop. 205 was pretty similar to legalization initiatives seen elsewhere, like Washington, Colorado, and California. Despite backing by the Marijuana Policy Project, Arizona apparently is not quite ready to go further than medical marijuana, which narrowly passed there in 2010.

Arkansas — Passed — Arkansas passed Issue 6, which legalizes medical marijuana for certain debilitating conditions.

California — Passed — This is the big kahuna. California, home to 12% of all Americans, passed Prop. 64, legalizing marijuana for all adults. The state is already working on regulations for its medical marijuana market, and both the medical and recreational markets are expected to go online some time in 2018. But if there is a straw that breaks that camel’s back federally, this is it.

Florida — Passed — Florida’s Amendment 2 passed overwhelmingly. With more than 70% of the vote, Florida got past its challenging 60% barrier on all citizens initiatives. Now, Florida will build a real commercial medical marijuana regime on top of its currently extremely limited high CBD program. Florida’s measure is broader than most state medical marijuana laws, including conditions like PTSD and gives physicians significant leeway in determining what to treat with medical marijuana.

Maine — Passed — Question 1 in Maine, a recreational marijuana initiative, was opposed by many in Maine’s government and business establishment as well as many in the medical marijuana community. However, it passed and Maine is now on the road to joining the other fully-legal cannabis states. 

Massachusetts — Passed — Massachusetts passed Question 4, legalizing recreational marijuana. This is another business licensing and taxation initiative, which follows the same basic structure as the other major recreational laws in the United States. 

Montana — Passed — I-182 will expand Montana’s medical marijuana program, turning it into more of a standard medical marijuana program, including allowing physicians to prescribe for PTSD and chronic pain.

Nevada — Passed — This one was close, but Nevada passed Question 2, legalizing recreational marijuana. Nevada’s medical marijuana business regime always felt like a precursor to recreational legalization, and the early investors in Nevada’s licensed medical businesses are now poised to take advantage and transition into the recreational market.

North Dakota — Passed — This one is a little surprising, because there wasn’t much polling done in North Dakota. North Dakota has passed Measure 5, which is a limited measure legalizing marijuana for the treatment of specific conditions such as cancer, AIDS, and hepatitis C.

Overall, a very good night for cannabis, assuming that our new President does not seek to toughen federal laws regarding state-law cannabis.

Florida legalizes cannabisAs most of you know by now, Florida voters yesterday passed the “Use of Marijuana for Debilitating Medical Conditions” ballot measure commonly known as Amendment 2. As a Florida-licensed attorney, I want to give a big congrats to my home state for finally saying yes to comprehensive medical marijuana program that should (hopefully) expand the monopoly on MMJ currently held by the Charlotte’s Web nurseries and provide more and better access to a variety medical cannabis for patients.

Nice going Ya’ll.

Under the ballot measure, the Department of Health has no more than six months from the law’s effective date to create regulations for registering Medical Marijuana Treatment Centers (MMTCs). Under Florida’s Constitution, the ballot measure should take effect “on the first Tuesday after the first Monday in January following the election unless otherwise specified by the amendment.” Amendment 2 has no specific effective dates for its various provisions, so this should mean we will be seeing a complete set of MMTC rules by June 2017 (assuming there are no legal challenges to these rules, but it’s Florida so there will be). An overview of the initial Department of Health Charlotte’s Web rules can be found here.

Leading up to this vote, Floridians have been calling our cannabis lawyers asking what they can do now to get ready for Department of Health MMTC registration in the future. Given the timeline above, my response was and is, “a lot actually.” I tell them that they can and should be doing the following, starting now:

  • Read the initiative and then read it again. The initiative is everything at this point and it’s imperative all prospective Florida MMJ operators read and thoroughly understand it because it provides the baselines for what’s going to be allowed for patients, physicians, and operators.
  • Figure out where you might want to operate and learn about the local government there.  The initiative is silent regarding whether local governments will be able to opt of the new law should it pass, which, in most states, has meant local governments are free to ban if they so wish. Some Florida cities have already prepared themselves for changing state marijuana laws by enacting municipal zoning and permitting laws. Other Florida cities and counties are (and will remain) opposed to MMJ businesses. Instead of spending dollars and time planning for a marijuana business in a Florida city that will never allow one, you should instead get a handle on friendly versus non-friendly local governments. As for those local governments without a clear idea on what to do about cannabis, this is your chance to step up and help educate the local authorities about what their local industry should look like. Our cannabis lawyers have done this in countless cities and counties in multiple states and believe me when I tell you that this can profoundly impact which way a city or county will go on cannabis commerce. I cannot stress enough the importance of your understanding the local situation where you will be locating.
  • Study other state regulatory models, including the super strict ones. You can learn a lot about what to expect from Florida by looking at other states’ regulatory models. Look at states like New York, Illinois, Nevada, and Minnesota, all of which have fairly limited and heavily controlled MMJ regimes. If Florida’s 2014 Charlotte’s Web law tells us anything (and it does), Florida’s new medical cannabis regime is going to be a lot more like these states than, let’s say, California, where (until the implementation of the MCRSA) the “cannabis friendly doctor is always in.” Our cannabis licensing lawyers area constantly comparing laws in the older states to get a better feel for what is likely to go down in the newer states. If State A interprets X provision a certain way, there is a good chance State B will do the same.
  • Review the Florida corporate structures available and figure out now which makes sense for you. MMTCs will be the “entities” that cultivate, process, and dispense cannabis to qualified patients. However, since MMTCs aren’t defined in the initiative beyond the term “entities,” that means we could be looking at either non-profits or for-profit entities. This means you should learn about the various corporate structures available to you, how they operate, and what you’ll need when you’re ready to file for your entity.
  • Start figuring out your budget and pace yourself. In anticipation of a fee-laden, probably very expensive application process for registering an MMTC, you need to start thinking now about your budget and from where you are going to get your funding. In all of the states in which our cannabis business lawyers have operated, one thing always holds true: those with secure funding before the application process starts have always had a huge advantage in competing for a cannabis business license over those still patching together their funding when the application window opens. You should plan for more than just start-up costs such as inventory, employees, operational costs, etc. You should also have a good idea of the funding you will need for the application process itself, which will require legal oversight, expert advisory input, contracting with architects for floor plans, and all sorts of other expert assistance. And again, speaking from experience, those with the best and most experienced team in place are the ones that get the licenses. And speaking just for lawyers, the best lawyers will charge a lot but not take on many clients. All of this means that you must budget accordingly and pace yourself. Just because the initiative mandates Florida’s Department of Health come up with all of the MMJ rules within six months of the effective date of the law doesn’t mean it will actually issue licenses or register MMTCs by that time. It’s Florida, people, and, that means there will likely be a whole host of lawsuits to delay this process. Get your budget in sufficient shape to weather these inevitable delays.
  • Choose your partners wisely. Consultants and so-called cannabis experts are a dime a dozen. Take your time in choosing who you will be using to help you navigate what is sure to be a complicated application process. Ask lots of questions, especially about whether they will require you to give them equity in your company and whether their relationship with you will be exclusive. For more on why this choice can be so important, check out Buyer Beware: Pot Colleges and Canna Consultants.
  • Choose your legal counsel wisely. Lawyers claiming to be marijuana business attorneys are also a dime a dozen and you need to proceed with caution in choosing your legal counsel as well. Make sure you choose a law firm with extensive experience in navigating robustly regulated application processes, the more states the better. Make sure your law firm also has corporate lawyers experienced in forming cannabis businesses and in dealing with state cannabis laws and regulations. Make sure to get clear on whether your law firm will be representing just you in seeking a particular license, or ten of your potential competitors as well. Make sure your law firm also has experience with commercial leaseholds for the cannabis industry. For why this matters, read Marijuana Commercial Leases: This Industry Is Different, You Know. And, given the wild west nature of this industry, no matter how regulated it is by a given state, make double-sure your attorney is an ethical one. And to put it bluntly, ethical lawyers do not take equity in cannabis businesses; they just don’t.
  • Don’t forget about federal illegality and get comfortable now with what that means. Those of us with years of experience in the state-regulated marijuana industry know all too well how the federal illegality of marijuana makes day to day business difficult and you need to start educating yourself on this as well. It’s not too early for you to start figuring out how you will deal with the difficulties of opening a bank account due to federal anti-money laundering laws or protecting your trade name and your brands without being able to register trademarks with the USPTO. It also makes sense to start navigating how you can best mitigate against federal income tax laws that prohibit all normal business deductions  under IRC 280e, and that bankruptcy isn’t a likely option in the event of failure. And, finally, how will you advertise your new cannabis business when Google and most major social media platforms will not allow you to do so?

Florida has legalized. Now get cracking.

Florida cannabisFrom its inception, medical marijuana has been a tortured subject in Florida. Though the legislature passed the 2014 Compassionate Medical Cannabis Act (which allows for non-smokeable low-THC, high-CBD marijuana), the Compassionate Use Program it supports has been nothing short of a total circus. Not only does Florida’s Compassionate Use Program limit who can access marijuana for medical use, Florida physicians have been slow to recommend cannabis to their patients for fear of the Federal Government taking away their license. The Program permits only five nurseries in the entire state (each of which have to have been in existence for no less than 30 years!) to provide all of the state’s cannabis. Many claim the Program is wholly corrupt, and there have been multiple legal challenges from nurseries that didn’t secure a Dispensing Organization authorization from the Florida Department of Health.

This March, there was some loosening of Florida’s cannabis regime when its legislature passed HB 307, which expands the state’s Right to Try Act to include medical marijuana. The highlights of HB 307 include the following:

  • Terminally ill qualified patients, defined as those with conditions that, “without the administration of life-sustaining procedures, will result in death within one year if the condition runs its normal course,” may access marijuana with more than .8% THC.
  • Once the state has 250,000 active qualified patients in the compassionate use registry, the state can approve three more Dispensing Organizations that must include “a farmer who is part of the Black Farmers and Agriculturists Association and is a member of the black farmers’ litigation group.”
  • More regulatory standards for Dispensing Organizations, including, increased transportation, security, and packaging and labeling requirements, as well as quality assurance and pesticide testing standards.
  • Local governments can decide for themselves whether to ban or regulate Dispensing Organizations.
  • Authorization for each of the five initially-approved Dispensing Organizations to operate as a dispensing organization if they post a $5 million performance bond and meet the requirements of and requests cultivation authorization, and expend at least $100,000 to fulfill its obligation as a dispensing organization.

At the end of July, the state’s first dispensary, Trulieve, opened in Tallahassee. Trulieve also made the state’s first patient home delivery. Though Florida’s Program remains too restrictive to allow access to cannabis for many qualified patients, Florida is slowly but surely moving forward with medical marijuana.

Now, cue Amendment 2, which represents Florida’s voter initiative for a more expansive medical marijuana program. Amendment 2 is up for vote in November and it it passes it will give existing Dispensing Organizations a big head start over new competition.

In “Florida Medical Marijuana: What You Need to Know to Have a Cannabis Business Later,” I wrote about what you can and should do now to set yourself up for success when Florida adopts a more comprehensive MMJ program. Though it is looking like Amendment 2 will pas,s the opposition to Amendment 2 is starting to make its presence known (though it doesn’t compare to the first time around when opponents of the original Amendment 2 called edibles the new “date rape drug“). So far, the “No On 2” campaign released an ad claiming budtenders are “dope dealers with storefronts,” a Publix heiress donated significant money to defeat the initiative, and the Florida Medical Association formally opposed the measure at a medical conference sponsored by Big-Pharma.

Despite the mounting opposition, this second bite at the apple for Amendment 2 feels much different than the first time. The state itself hasn’t challenged the amendment and the opposition’s increasing desperation is coming off as even more superficial and unsubstantiated than the last time. Times have definitely changed and so long as fly-by-night “pot colleges” and airport seminars, and self-proclaimed “medical marijuana business lawyers” and “consultants” promising gobs of cash with reckless abandon manage not to offend too many Florida voters this time around, we’ll likely see Amendment 2 pass in November.

So if you are interested in participating in Florida’s cannabis industry, now is the time to start your engines.

Florida cannabis

Over the past month, I’ve received dozens of calls and emails from Floridians looking to take advantage of the new Amendment 2 if and when it passes in Florida this November. As we’ve previously written, Florida has a love/hate relationship with its marijuana law and rule making. But this time, for a number of reasons (see this), I’m confident Floridians will vote to implement a comprehensive medical marijuana program in 2016.

The number one question I get from Florida callers and emailers who want to start a medical marijuana business in Florida after a successful vote is: “is there anything I can do now to get my business lined up for the new Amendment 2?” My response is a lot, actually, including the following:

  • Read the initiative and then read it again. The initiative is everything at this point and it’s imperative all prospective Florida MMJ operators read and thoroughly understand it because it provides the directions to the Department of Health regarding future rule making and it sets the baselines for what’s going to be allowed for patients, physicians, and operators. Just because the initiative is short doesn’t mean it doesn’t contain important information about the future of this program. Read it until you are sick of it. And then a few days later, read it again.
  • Get to know the campaign. Getting to know the people behind the campaign now will do you a ton of good with informing your own future business plans. The Department of Health will likely look to the campaign for interpreting the ballot initiative and to assist it with rule making. Those behind the campaign will be putting on educational events, and attending these will likely be the most cost-effective networking available to you — way better than a marijuana airport seminar, trust me. If you are serious about having a Florida cannabis business, start making friends with United for Care now.
  • Figure out where you might want to operate and learn about that local government. I cannot stress enough the importance of this. The initiative is silent regarding whether local governments will be able to opt of the new law should it pass, which, in most states, has meant local governments are free to ban if they so wish. Some Florida cities have already prepared themselves for changing state marijuana laws by enacting municipal zoning and permitting laws. Other Florida cities and counties are (and will remain) opposed to MMJ businesses. Instead of spending dollars and time planning for a marijuana business in a Florida city that will never allow one, you should instead get a handle on friendly versus non-friendly local governments. As for those local governments without a clear idea on what to do about cannabis, this is your chance to step up and help educate the local authorities about what their local industry should look like. Our cannabis lawyers have done this in countless cities and counties in multiple states and believe me when I tell you that this can profoundly impact which way a city or county will go on cannabis commerce.
  • Study other state regulatory models, including the super strict ones. You can learn a lot about what to expect from Florida by looking at other states’ regulatory models. Look at states like New York, Illinois, Nevada, and Minnesota, all of which have fairly limited and heavily controlled MMJ regimes. If Florida’s 2014 Charlotte’s Web law tells us anything (and I think it does), Florida’s new medical cannabis regime is going to be a lot more like these states than, let’s say, California, where (until the implementation of the MMRSA) the “cannabis friendly doctor is always in.”
  • Review the Florida corporate structures available and figure out now which makes sense for you. Medical Marijuana Treatment Centers (MMTC) will be the “entities” that cultivate, process, and dispense cannabis to qualified patients. However, since MMTCs aren’t defined in the initiative beyond the term “entities,” that means we could be looking at either non-profits or for-profit entities. This means you should learn about the various corporate structures available to you, how they operate, and what you’ll need when you’re ready to file for your entity.
  • Start figuring out your budget and pace yourself. In anticipation of a fee-laden, probably very expensive application process for registering an MMTC, you need to start thinking now about your budget and from where you are going to get your funding. In all of the states in which our cannabis business lawyers have operated, one thing always holds true: those with secure funding before the application process even starts have a huge advantage in competing for a cannabis business license over those still patching together their funding when the application window opens. You should plan for more than just start-up costs (inventory, employees, operational costs, etc.); you will also need funds for the application process itself which demands legal oversight, expert advisory input, contracting with architects for floor plans, and all sorts of other expert assistance. Budget accordingly and pace yourself. Just because the initiative mandates Florida’s Department of Health come up with all of the MMJ rules within six months of the effective date of the law doesn’t mean it will actually issue licenses or register MMTCs by that time. It’s Florida, people, and that means there will likely be a whole host of lawsuits to delay this process. Get your budget in sufficient shape to weather these delays.
  • Choose your partners wisely. Consultants and so-called cannabis experts are a dime a dozen. Take your time in choosing who you will be using to help you navigate what is sure to be a complicated application process. Ask lots of questions, especially about whether they will require you to give them equity in your company and whether their relationship with you will be exclusive. For more on why this choice can be so important, check out Buyer Beware: Pot Colleges and Canna Consultants.
  • Choose your legal counsel wisely. Lawyers claiming to be marijuana business attorneys are also a dime a dozen and you need to proceed with caution in choosing your legal counsel as well. Make sure you choose a law firm with extensive experience in navigating robustly regulated application processes, the more states the better. Make sure your law firm also has corporate lawyers experienced in forming cannabis businesses and in dealing with state cannabis laws and regulations. Make sure to get clear on whether your law firm will be representing just you in seeking a particular license, or ten of your potential competitors as well. Make sure your law firm also has experience with commercial leaseholds for the cannabis industry. For why this matters, read Marijuana Commercial Leases: This Industry Is Different, You Know. And, given the wild west nature of this industry, no matter how regulated it is by a given state, make double-sure your attorney is an ethical one.
  • Don’t forget about federal illegality and get comfortable now with what that means. Those of us with years of experience in the state-regulated marijuana industry know all too well how the federal illegality of marijuana makes day to day business difficult and you need to start educating yourself on this as well. It’s not too early for you to start figuring out how you will deal with the difficulties of opening a bank account due to federal anti-money laundering laws or protecting your trade name and your brands without being able to register trademarks with the USPTO. It also makes sense to start navigating how you can best mitigate against federal income tax laws that prohibit all normal business deductions  under IRC 280e, and that bankruptcy isn’t a likely option in the event of failure. And, finally, how will you advertise your new cannabis business when Google and most major social media platforms will not allow you to do so?

Waiting and watching until the new Amendment 2 passes is fine, but, if you’re really serious about getting out ahead, you can do a lot right now in order to prepare yourself and your future marijuana business entity for the Sunshine State’s grueling application process.

CompassionateCare-01With all of the state legal marijuana ballot initiatives out there, 2016 is going to be a big year for cannabis.

As a result, we are ranking the fifty states from worst to best on how they treat cannabis and those who consume it. Each of our State of Cannabis posts will analyze one state and our final post will crown the best state for cannabis. As is always the case, but particularly so with this series, we welcome your comments. Today we round out our bottom-ten states with number 39: Florida. Our previous rankings are as follows: 40. Arkansas; 41. Montana; 42. Iowa; 43. Virginia; 44. Wyoming; 45. Texas;  46. Kansas;  47. Alabama;  48. Idaho; 49. Oklahoma;  50. South Dakota.

Criminal Penalties. Florida has some of the harshest criminal penalties for marijuana in the country. Even possession of a small amount, less than 20 grams, can earn you up to a year in prison and a fine of up to $1,000. Possession of an amount of over 20 grams, but less than 25 pounds can result in a 5-year prison sentence with a $5,000 fine. Delivery of 20 grams or less of marijuana not done in exchange for money earns a maximum 1-year prison sentence and a maximum $1,000 fine.

Possession or sale of larger amounts of marijuana warrant longer jail sentences and steep fines:

  • 25 pounds or less earns a maximum 5-year prison sentence and up to a $5,000 fine.
  • 25 to 2,000 pounds earns a mandatory minimum 3-year prison sentence, with a maximum sentence of 15 years and a fine up to a $25,000.
  • 2,000 to 10,000 pounds earns a mandatory minimum 7-year prison sentence, with a maximum sentence of 30 years and up to a $50,000 fine.
  • Over 10,0000 pounds earns a mandatory 15-year minimum prison sentence with a maximum sentence of at least 30 years and up to a $200,000 fine.

The sale or delivery of marijuana within 1,000 feet of a school, college, park, or other similar area is punishable by up to 15 years imprisonment and a potential $10,000 fine.

Medical Marijuana. In June 2014, the Florida legislature passed the “Compassionate Medical Cannabis Act of 2014” which only allows the cultivation and distribution of low-THC marijuana to qualified patients. The law is supposed to allow children with epilepsy or chronic seizures, or those with terminal illnesses, to use non-euphoric marijuana, but it has been largely ineffective as qualified patients have been unable to access their medicine due to multiple legal challenges and delays in implementing the program.

In November 2014, Florida voters had an opportunity to amend their Constitution by voting for “Amendment 2,” which would have given Florida a more comprehensive medical marijuana reboot through the passage of less restrictive MMJ laws. Fifty-eight percent of voters supported the amendment, but it failed to meet the 60 percent threshold required for amending the constitution. Our own Canna Law Attorney Hilary Bricken summarized the saga of Amendment 2 in an article written for Above the Law:

Florida’s Amendment 2 took a strange and rocky road to the ballot box the first time around. The Florida State attorney general filed a challenge to strike it down, alleging it misled the public about its true intent and effect. The Amendment 2 campaign had to go before Florida’s Supreme Court to keep Amendment 2 alive, which it did.

I am a licensed Florida attorney and I spent much time in the state with clients during the run-up to Amendment 2, and, in my opinion, what really set so many Florida voters against Amendment 2 was the proliferation of more fly-by-night pot colleges, airport seminars, and self-proclaimed “medical marijuana business lawyers” promising more endless riches than I have seen in any other state.

Florida also saw billionaire Sheldon Adelson pony up massive funds to fight against Amendment 2 through a well-funded group that claimed medical marijuana is the new “date-rape drug,” and that circulated a video of Amendment 2’s main financial backer and supporter, lawyer John Morgan, claiming that Morgan’s true intent was to completely legalize marijuana. In spite of all this, our firm advocated in favor of Amendment 2.

Florida’s legalization fight has so far been unsuccessful, but it is not over yet.

Future Legalization. Many believe 2016 will be the year Florida finally gets workable medical marijuana laws. United for Care refined Amendment 2 in a new ballot initiative entitled “Use of Marijuana for Debilitating Conditions,” and Florida voters will have another opportunity to vote on it this November. According to the Orlando Sentinel, 65 percent of Florida voters would support the medical marijuana initiative while only 28 percent would oppose it. Support comes from politically diverse groups with 75 percent of Democrats,  70 percent of independents, and 53 percent of Republicans supporting the medical marijuana initiative.

The new amendment would charge Florida’s Department of Health with overseeing the new medical marijuana program. A “qualifying patient” would receive a physician certification and a valid qualifying patient identification card after being diagnosed with a “debilitating medical condition,” which conditions include “cancer, epilepsy, glaucoma, positive status for human immunodeficiency virus (HIV), acquired immune deficiency syndrome (AIDS), post-traumatic stress disorder (PTSD), amyotrophic lateral sclerosis (ALS), Crohn’s disease, Parkinson’s disease, multiple sclerosis, or other debilitating medical conditions of the same kind or class as or comparable to those enumerated, and for which a physician believes that the medical use of marijuana would likely outweigh the potential health risks for a patient.”

Qualifying patients would receive marijuana from “Medical Marijuana Treatment Centers” (MMTC). The MMTCs would grow, process, and distribute all medical marijuana and would be registered with and governed by the Department of Health. The new amendment also requires the Department of Health to promulgate “reasonable regulations necessary for the implementation and enforcement” within six months of the effective date of the law.

Bottomline. There is reason to be hopeful about cannabis reform in Florida. But, as of now, Florida lacks workable medical marijuana laws and Florida cannabis patients are either forced to go without their medicine or risk brutal criminal penalties by turning to the black market. Unless and until Florida actually passes and puts into operation serious cannabis laws, marijuana users should probably avoid the Sunshine State.

When will Florida become known for its legal cannabis too?
When will Florida become known for its legal cannabis too?

Florida first tried passing a medical marijuana constitutional amendment by a vote of the people in 2014. Things feel a little different now even though the ballot initiative will again be making its way back to the voters this year. The hype has waned, but can we expect the 4same political and legal tumult that faced Amendment 2 the first time around?

Florida’s Amendment 2 took a strange and rocky road to the ballot box the first time around. The Florida State attorney general filed a challenge to strike it down, alleging it misled the public about its true intent and effect. The Amendment 2 campaign had to go before the Florida’s Supreme Court to keep Amendment 2 alive, which it did.

I am a licensed Florida attorney and I spent much time in the state with clients during the run-up to Amendment 2 and, in my opinion, what really set so many Florida voters against Amendment 2 was the proliferation of more fly by night pot colleges, airport seminars, and self-proclaimed “medical marijuana business lawyers,” promising endless riches than I (or any of the other lawyers in my firm) have seen in any other state.

Florida also saw billionaire Sheldon Adelson pony up massive funds to fight against Amendment 2 through a well-funded group that claimed medical marijuana is the new “date-rape drug,” and that circulated a video of Amendment 2’s main financial backer and supporter, lawyer John Morgan, claiming that Morgan’s true intent was to achieve the total legalization of marijuana. In spite of all this, our firm advocated in favor of Amendment 2.

Amendment 2 made it to the ballot box but did not get the votes needed to pass. Florida requires a 60% supermajority vote for a constitutional amendment by the voters, and Amendment 2 fell short at around 57% of the vote.

In January 2015, I wrote about Amendment 2 making a comeback in 2016. The campaign for Amendment 2 has now gathered the necessary signatures for the Florida Division of Elections to certify the Amendment to go to the ballot this November, and there have so far not been any legal challenges from the state attorney general or any opposition groups.

What makes the new Use of Marijuana for Debilitating Medical Conditions ballot amendment different from Amendment 2? Frankly, not much beyond clearer language this time regarding regulation and oversight of medical marijuana businesses, qualifying patients, and caregivers.

If the new amendment passes, Florida’s Department of Health will be in charge of oversee Florida’s medical marijuana program. “Medical Marijuana Treatment Centers” (MMTC) are the entities that will grow, process, and distribute all medical marijuana. An MMTC is defined as “an entity that acquires, cultivates, possesses, processes (including development of related products such as food, tinctures, aerosols, oils, or ointments), transfers, transports, sells, distributes, dispenses, or administers marijuana, products containing marijuana, related supplies, or educational materials to qualifying patients or their caregivers and is registered by the Department [of Health].”  A “qualifying patient” will be a person diagnosed with a debilitating medical condition, who has a physician certification and a valid qualifying patient identification card  “Debilitating Medical Condition” means “cancer, epilepsy, glaucoma, positive status for human immunodeficiency virus (HIV), acquired immune deficiency syndrome (AIDS), post-traumatic stress disorder (PTSD), amyotrophic lateral sclerosis (ALS), Crohn’s disease, Parkinson’s disease, multiple sclerosis, or other debilitating medical conditions of the same kind or class as or comparable to those enumerated, and for which a physician believes that the medical use of marijuana would likely outweigh the potential health risks for a patient.”

This new amendment makes clear that the Florida Department of Health will issue “reasonable regulations necessary for the implementation and enforcement” of the new law so as to ensure the availability and safe use of medical marijuana by qualifying patients. The amendment makes sure that the following regulations be promulgated no later than six (6) months after the effective date of the law:

  • Procedures for issuance and annual renewal of qualifying patient identification cards to people with physician certifications and standards for renewal of such identification cards. Before issuing an identification card to a minor, the Department [of Health] must receive written consent from the minor’s parent or legal guardian, in addition to the physician certification.
  • Procedures establishing qualifications and standards for caregivers, including conducting appropriate background checks, and procedures for issuance and annual renewal of caregiver identification cards.
  • Procedures for registration of MMTCs to include issuance, renewal, suspension and revocation of registration, and standards to ensure proper security, record keeping, testing, labeling, inspection, and safety.
  • A regulation defining the amount of marijuana reasonably be presumed to be an adequate supply for qualifying patients’ medical use, based on the best available evidence. This presumption as to quantity may be overcome with evidence of a particular qualifying patient’s appropriate medical use.

We are hoping the legal and political circus that encircled Amendment 2 will be kept at bay this time around and that Florida voters will be placated by the amendment’s stronger language regarding regulation and control of Florida’s more robust medical marijuana program. In other words, we will be pushing for Florida voters to pass this new Amendment.

Do stay tuned.

The cannabis industry must avoid giving fodder for a book like this.
The cannabis industry must avoid giving fodder for a book like this.

Noelle Crombie of the Oregonian blows the lid off Oregon’s lack of any real testing or standards for its medical marijuana products. In her series, “A Tainted High,” Ms. Crombie calls into question the safety of cannabis in Oregon. This is the kind of story that will lead to major realizations and to significant changes and I cannot stress enough how important it is for everyone in the industry to read her article.

A lack of quality testing is not necessarily the most shocking part of Ms. Crombie’s series, as several states still do not require such testing. Rather, it’s that so many commercial medical marijuana manufacturers in Oregon are endangering consumers by using large quantities of unsafe pesticides and other chemicals on and in their products. We have for a while now preached to the marijuana community that products liability will eventually affect it, and this series just emphasizes how shoddy safety practices are putting people at great risk of getting sick or worse. 

To put it bluntly, if the cannabis industry (and not just in Oregon) does not clean up its act when it comes to consumer safety, we can likely expect three things to happen:

  • The government (most likely the State of Oregon) will come in and force a clean-up.
  • There will be a backlash against legalization.
  • Legal cannabis sales will stall or decline.

Ms. Crombie reports the following disturbing facts:

Ten marijuana concentrates, popular extracts made from the plant’s leaves and flowers, were screened. Pesticides were found in nearly all of them. Many of the pesticides detected aren’t regulated under Oregon’s medical marijuana rules, which means that products that contain these chemicals can still be sold.

A total of 14 chemicals were found in eight of the samples, including a half-dozen that the federal government has classified as having possible or probable links to cancer.

Among them: a common household roach killer and another whose health risks prompted the federal government to eliminate it for most residential uses more than a decade ago. Though many growers say they follow organic practices, only one of the pesticides detected in the analysis is approved for use in organic agriculture.

The above means that qualifying medical patients are consuming pesticide-laced cannabis, even in many instances after having been assured by producers, manufacturers, testing companies, and retailers that their products are “organic” or fit for consumption. Ms. Crombie also indicts “[a] combination of lax state rules, inconsistent lab practices and inaccurate test results has enabled pesticide-laced products to enter the medical marijuana market.”

The lack of state mandated testing standards for pesticides and other chemicals is not unique to Oregon, as the following state rundown shows:

California. California has no mandatory quality assurance testing and no mandatory testing for pesticides under its Compassionate Use Act or under any corresponding state regulations.

Colorado. Recreational cannabis must be tested for pesticides, but medical marijuana products do not have the same requirement. SB 260 would mandate pesticide testing for MMJ, but that bill is still awaiting Governor Hickenlooper’s signature — though he is expected to sign it into law. SB 260 requires mandatory testing of MMJ, including for pesticides, but it will not go into effect until July 1, 2016.

Nevada. Nevada requires medical marijuana establishments and independent testing labs abide by its pesticide screening policy.

Florida. Pesticide testing is nowhere even mentioned in either Florida’s Compassionate Medical Cannabis Act of 2014 or in its accompanying administrative regulations.

Illinois.  Illinois’s medical cannabis administrative rules on laboratory testing mandate that: “Immediately prior to manufacturing or natural processing of any cannabis or cannabis-infused product or packaging cannabis for sale to a dispensary, each batch shall be made available at the cultivation center for an employee of an approved laboratory to select a random sample, which shall be tested by the approved laboratory for . . . pesticide active ingredients . . .”

Minnesota. Minnesota selected two labs to test all of its marijuana and, under its permanent manufacturer rules, those labs must accurately test for “pesticide residue” in all products.

New York. New York’s medical marijuana rules require”[t]esting for contaminants in the final medical marihuana product shall include but shall not be limited to those analytes listed below [including] . . . any pesticide/herbicide/fungicide used during production of the medical marihuana product.”

Washington.  Though Washington requires quality assurance testing, it makes testing for pesticides optional. According to WAC 314-55-102(8), “[t]he general body of required quality assurance tests for marijuana flowers and infused products may [but not must] include moisture content, potency analysis, foreign matter inspection, microbiological screening, pesticide and other chemical residue and metals screening, and residual solvents levels.” Washington producers and processors can only use pesticides approved by the state and any product that uses a pesticide must include a statement setting forth exactly what pesticides were used on it. As for Washington’s new MMJ program (which goes into full effect on July 1, 2016), SB 5052 dictates that “medical specific regulations [should] be adopted as needed and under consultation of the departments of health and agriculture so that safe handling practices will be adopted and so that testing standards for medical products meet or exceed those standards in use in the recreational market.”

Alaska. Alaska’s recreational ballot measure doesn’t set forth any specific testing requirements yet, but it does mandate that the Alcoholic Beverage Control Board create rules surrounding the “[h]ealth and safety regulations and standards for the manufacture of marijuana products and the cultivation of marijuana.” So, we’ll have to see what Alaska does for particular testing standards in the future. Concerning medical cannabis, under Alaska’s Medical Uses of Marijuana for Persons Suffering from Debilitating Medical Conditions Act, there’s no mention of quality assurance testing at all.

Could a marijuana product containing high levels of dangerous pesticides and chemicals be considered a dangerous or defective product? Absolutely. Could a cannabis producer, processor, or retailer be sued for its involvement with a pesticide-laced cannabis product? Absolutely. See Marijuana Retailers: Be Mindful of Products Liability and Inaccurate Marijuana Testing Will Lead To Lawsuits.

Bottom Line. If you want to avoid being sued or having your name show up in an article for unsafe cannabis product, you have no real choice but to clean up your act. This is true regardless of the state in which you conduct business.

On October 28, 2014, the United States Department of Justice issued a “Policy Statement Regarding Marijuana Issues in Indian Country.” In this memo, the DOJ stated that its eight enforcement priorities will apply “in the event that sovereign Indian Nations seek to legalize the cultivation or use of marijuana in Indian Country.” At least one Indian tribe in Northern California plans to take advantage of the DOJ’s policy statement to start its own legalized marijuana farm. Other Indian tribal governments are now considering whether to legalize marijuana for medicinal, agricultural, or recreational use on par with state governments.

Nonetheless, social policy relating to substance abuse in Indian Country has long embraced prohibition for non-prescription drug usage and, in some tribal jurisdictions, alcohol usage. The potential legalization of commercial marijuana cultivation, manufacturing, and distribution in Indian tribal jurisdictions raises complex legal questions as well as whether past social policies should be changed in light of rapidly evolving social policy toward marijuana usage in the United States.

In an effort to address the complicated issues relating to legalization on tribal lands, the Canna Law Group, along with co-sponsor Odawi Law, PLLC, will be hosting the first Tribal Marijuana Conference at the Tulalip Resort Casino, from 8:30 a.m.-5:30 p.m. Registration details and the conference agenda can be found here. Speakers include marijuana legal and policy experts, including Ohio State University Professor of Law Douglas Berman, UCLA Professor of Public Policy Mark Kleiman, and Jacob Sullum, senior editor at Reason.com, in addition to tribal authorities from the Tulalip and Lummi Nations.

The goal of the Conference is to educate attendees regarding the federal government’s treatment of marijuana and how to craft regulatory regimes for Indian tribes that will pass muster under the DOJ’s policy statement, all while keeping an eye to the sensitive policy and cultural issues concerning substance abuse on Native lands.

We hope to see you there!

Florida has a troubled relationship with cannabis to say the least. Though the state passed its own limited medical marijuana laws under the Compassionate Medical Cannabis Act of 2014, qualifying patients are still unable to access the medicine they need because the dispensing rules are on hold while under serious legal challenge. In addition, Amendment 2, which would have given Florida a comprehensive medical marijuana system, failed at the polls this past November.

But those in favor of Amendment 2 vow that the fight for a comprehensive medical marijuana regime in Florida is not over. In fact, John Morgan (the main financial backer of Amendment 2) and his team are back with a revised medical marijuana Amendment, shooting for passage in 2016 and assuring Florida voters that the alleged “loopholes” in Amendment 2 have been closed in this new draft.

The opposition to Amendment 2 made some pretty absurd claims about cannabis — remember the “cannabis is the new date rape drug” ads? But the more mainstream complaints against Amendment 2 were the following:

  1. Amendment 2 would have given doctors an unrestricted license to dish out cannabis recommendations;
  2. Any “medical condition” could qualify for a cannabis recommendation thereby proliferating unlawful “recreational use”; and
  3. “Personal caregivers” lacked significant oversight from the state.

From what we can tell, this 2016 Amendment is really just a slight revision of the old one. The revised Amendment still allows for the medical use of marijuana for individuals with debilitating medical conditions, as determined by a licensed Florida physician. Morgan though is asserting that the new proposed Amendment makes the following significant changes from the failed 2014 Amendment:

  1. It mandates that the Florida Department of Health verify parental consent before a doctor can recommend marijuana to a minor.
  2. It clarifies the debilitating conditions eligible for cannabis and it rules out all other conditions.
  3. It clarifies that doctors who recommend marijuana cannot be arrested for their recommendations, but that they are not immune from civil lawsuits for negligence or for malpractice.
  4. It clarifies that the Department of Health must establish quality standards for caregivers.

Morgan filed the 2016 Amendment with the Secretary of State in Tallahassee earlier this month and he and his campaigners are now seeking to gather enough signatures to get the new Amendment on the ballot.

Floridians who favor a more complete medical marijuana regime should be excited for 2016. Amendment 2 garnered 58% of the vote, falling short of passing by only 2%. If Florida can this time substitute earnest and reality-based eduction about how cannabis would actually help people, while at the same time reducing by at least half the massive influx of get rich quick carpetbaggers with their “cannabis colleges” and their quickly formed “industry organizations,” we think the new Amendment’s chances will be quite good.

We still have high hopes for Florida MMJ in 2016. What do you think?