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Regulators say pot dispensaries can sell statewide but want them chosen by lottery

MarijuanaFive medical marijuana dispensaries will be allowed to sell their product statewide under a new rule proposed by state regulators, but to avoid litigation regulators will pick the nurseries that will operate the new industry by lottery, Florida officials said Wednesday.

The revised rule will be discussed at a workshop in Tallahassee on Friday as the state prepares to authorize five nurseries in each region of the state to cultivate and distribute marijuana for medical purposes.

Florida legislators passed the law last spring legalizing marijuana low in THC (tetrahydrocannabinol) and high in CBD (cannabidiol) for patients with seizures, severe and persistent muscle spasms and cancer. The dispensaries must be in operation by Jan. 1 to start selling to patients who are put on a state-run “compassionate use registry.”

The first draft of the rule came under harsh criticism from members of the industry who want the state to focus on finding applicants that can produce the best quality, not those that can win because of chance.

Despite those concerns, however, state officials have refused to abandon the concept of choosing the five regional vendors based on a lottery, saying that they fear a lawsuit could stymie efforts to get the drug to patients.

“The Department has included substantive criteria in the draft rule which an applicant must meet to qualify as a potential dispensing organization,’’ said Nathan Dunn, DOH spokesman. “The goal is to get the compassionate care authorized by this legislation to the sick individuals in Florida who qualify. The department’s objective is to establish a regulatory structure that neither invites litigation nor prolongs the process.”

Louis Rotundo, a lobbyist who represents the Florida Medical Cannabis Association, a coalition of growers and investors eager to get into the industry, warned the the lottery could spawn trouble.

“Given this rule, some people will team up on a whim and a promise and throw their name in the hat,’’ he said. “That’s not good for the State of Florida and it’s not good for the patient. The applicants should have to show they have an ability to perform – not a promise to perform.”

The draft rule released late Tuesday by DOH makes significant changes to an earlier version by tightening requirements for who can operate a dispensary.

The law requires that only nurseries that have been in business in Florida for at least 30 years may be eligible to grow, process and distribute the low-THC pot, but the new rule says these nurseries need only have a 25 percent ownership interest in the dispensary company.

At a workshop earlier this month, several prospective growers expressed concerns that each of the five regional dispensaries would operate as a virtual monopoly unless they were allowed to compete with one another.

The new rule allows each nursery to have only one dispensary but each of the five dispensaries may deliver up to a 30-day supply to patients across the state, Dunn said.

Despite the attempts by regulators to avoid litigation, some prospective investors say it is inevitable, especially if Amendment 2 -- the citizen initiative on the November ballot that would legalize all strains of marijuana for medical purposes -- becomes law.

That looks nearly certain according to poll released this week by Quinnipiac University which found that 88 percent of Florida voters support the use of marijuana for medical purposes, up from 82 percent support that Quinnipiac reported in November.

“The applicants who are not among the five dispensaries chosen by the state of Florida, will undoubtedly sue,’’ said Taylor Biehl of Capital Alliance Group, which also represents a group of growers and investors. “The litigants will likely argue that Amendment 2 does not directly limit the number of dispensaries that are permitted to operate in Florida.”

Rotundo also questions the practical application of allowing dispensaries to truck their product across the state.

“How do you do this for thousands of patients? Do you have twenty trucks ready to go as phone calls come in from doctor’s offices across the state?” he asked. “It’s unworkable.”

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