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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.”

Comments

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ed jenkins

The citizens want these illegal drug dealers precented from entering our family friendly state where they will attempt to distribute products that are harmful to children and lead to worthless lives for adults.

Marlowe Fox

DOH spokesman, Nathan Dunn, stated that the lottery is meant to obviate litigation or otherwise prevent prolonging the process. The DOH believes a qualitative-based analysis would only invite litigation –and they’re right, and it also prevents strategic behavior by middlemen and investors. A lottery able to curb “gaming the system” and also promotes contribution from prospective participants. The DOH’s lottery seems quite a bit of genius as it has garnered contribution from a myriad of participants despite only offering five payouts (five dispensary lotteries). And this is what lottery systems are designed to do: increase participant contribution and inhibit ‘gaming’. Who can argue that the DOH has received significant contributions from scientists to industry experts.

Lobbyist Louis Rotundo complains that “[s]ome people will team up on a whim and a promise and throw their name in the hat.” Rotundo ignores the laundry list of requirements set forth in Florida Statute 381.986(5)(b)(1) which has effectively parsed down over 7,000 Florida nurseries into 46 eligible applicants. One of the requirements is thirty years in operation as a nursery and hardly seems like a ‘whim.’ In fact, it gives all eligible nurseries an opportunity to serve as a dispensary –not just the ones who have aligned themselves with the right investors through middlemen. If the system was qualitative, then the successful nurseries would merely be those who had been solicited by middlemen and aligned with the right investors. The investors would then game the system by investing in the infrastructure outlined and measured by any prospective DOH qualitative analysis. And it doesn’t stop there –say an investment-backed nursery doesn’t get selected, then they have an incentive to litigate.

The lottery is an elegant solution to a complex problem and kudos to the Department of Health for standing behind it.

tom2

Florida bosses might wish to consider Colorado's experience. Their homeless shelters now are overflowing with users too lazy and loaded to work. Presumably, they're also too lazy and loaded to collect (Food Stamps, Section 8, WIC and a hundred other freebies).

Bill Thompson

The citizens want the scumbag Scott and the corrupt GOP legislative leadership arrested by the feds and prosecuted for enabling the sale of illegal drugs in our family friendly state in violation of federal drugs laws.

Bill Thompson

It's pathetic that the scumbag Scott and the corrupt GOP legislative leadership flip flopped on supporting this bill in an cynical attempt to head off the constitutional amendment that is on the ballot in November that has wide support.

Bill Thompson

The legalization of medical marijuana will prove to be a boon to the state economy that will create new industries, new companies and new jobs and an increase in the state GDP. Perhaps this is why the scumbag Scott is supporting it because he desperately needs something to boost the state's sluggish economy under his leadership (or lack thereof).

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