We’ve said it time and time again, when state agencies start rolling out their marijuana regulatory rules is when things begin to happen. This is also a time when planning too early or too late can mean an ineligible cannabis application.

On July 2, the Florida Department of Health issued its first draft regulatory rules for under Florida’s Compassionate Medical Cannabis Act (or “Charlotte’s Web law”). Florida’s enacting legislation sets forth pretty stringent standards and its Department of Health (DOH) didn’t disappoint with its issuance of even tighter regulations and protocols. Though this is just a first draft (16 pages total), in our experience with cannabis in multiple states, these drafts generally end up as the actual rules that get passed, with little to no changes. If that’s the case in Florida, the 39 eligible nurseries in the State are in for a (fairly unpredictable) ride.

So, what are the highlights of the proposed DOH rules? Our review reveals the following:

  • DOH is developing a written application all applicants will need to execute to apply for a license to cultivate, process, and dispense as a dispensing organization.
  • If selected as a regional dispensing organization, the applicant must pay a $150,000 application fee and post a $5 million performance bond within 30 days of selection. Failure to timely pay these fees leads to dismissal of the application, with DOH moving on to the next candidate in line.
  • In addition to the fees above, regional dispensing organizations must pay an additional $150,000 fee every other year.
  • If more than one application is received in a given region, a public lottery will determine the order in which applications are considered.
  • Regional dispensing organizations cannot be located within 500 feet of any public or private school that existed prior to the date of the dispensing organization’s application;
  • An applicant is ineligible to apply for dispensing organization approval if any owner or manager:
    • has been convicted a felony offense (ever)
    • has served as an owner or manager of a dispensing organization that’s had its approval revoked
    • is under 21 years old
    • is a physician currently ordering low-dose THC for registered patients
    • is a law enforcement official
    •  is a DOH employee or contractor of DOH
  • Applicants must provide written documentation showing that they can obtain “the premises, resources, and personnel necessary to operate as a dispensing organization. This written documentation must include the following:
    • a list of current and proposed staffing
    • written documentation showing that staff and owners and managers have passed applicable background checks
    • an (intense) inventory control plan
    • a map showing the location and the facility
    • a comprehensive site plan drawn to scale
    • a floor plan of the facility, drawn to scale and showing:
      • layout and dimensions of each room
      • name and function of each room
      • location of each hand-washing sink
      • location of each toilet room
      • means of egress
      • location of each video camera
      • location of each panic button
      • location of natural and artificial lighting sources
  • Applicants must provide written documentation showing they possess an “infrastructure reasonably located” to dispense medicine to patients “regionally.
  • Applicants must provide DOH with a table showing the supervisory structure of their company.
  • Applicants must provide DOH with written documentation showing they employ a licensed physician as a “medical director.”
  • If a dispensing organization fails to request authorization to cultivate within 60 days of DOH’s approval or if it fails to begin dispensing within 120 days from that same date, the organization’s approval will be revoked.
  • The facility must be inspected by DOH before any authorized cultivation (this means no plants, seeds, or starts may be on-site during inspection) commences.
  • There are comprehensive packaging and labeling requirements for all medicine and all medicine must be quality tested by an accredited laboratory before any distribution to patients, and if your cannabis is too potent, law enforcement will intervene and sequester and destroy those plants.
  • Once approved, dispensing organizations must designate an “inventory control agent” to oversee its inventory control system and that system must cover all inventory protocol, from seed-to-sale tracking all the way to destruction and disposal.
  • All inventory records must be kept for no less than 5 years with internal inventory audits taking place no less than once a month.
  • The dispensing organization must ensure it is available to dispense medicine to patients at least 30 hours a week, between the hours of 7 a.m. and 10 p.m.
  • No CBD-edibles or food products are permitted.
  • The rules currently appear to allow for a ten-day application window from the effective date of the rules.

Even with its CBD laws, Florida is showing its teeth by creating significant barriers to entry and stringent standards for marijuana industry participants. To Florida’s credit, these rules should be more than enough for Florida to avoid Federal scrutiny and have a successful medical marijuana program, as they easily fulfill the eight criteria the Department of Justice currently prioritizes under the most recent Cole Memo. Still, these rules may change under DOH’s rule making authority and now would be the time for eligible nurseries to use experienced marijuana lobbyists to work with DOH before these rules become final.

These rules remind us of Nevada, which we described in How To Get A Nevada Marijuana License. It Ain’t Easy, about which we had the following to say:

If you ever doubted otherwise, it should be clear from the above (which we must stress again are really only bare minimums) that Nevada’s high-priced licensing process is complex, legalistic, and time-consuming, and certainly not for those inexperienced with the cannabis industry. Just filling out the application will require extensive knowledge of land use requirements, environmental impacts, industry merit, patient needs, and regulatory compliance, among other things.

Florida’s requirements are shaping up to be even tougher. There’s also little doubt that these rules are likely a sneak preview of what’s to come should Floridians vote in favor of Amendment 2 in November.