July 22, 2019 Practice Points

Florida Overturns Marijuana Licensing Scheme

Florida's First District Court of Appeals has overturned Florida's state marijuana licensing scheme, as unconstitutional.

By Sanford Hausler

In 2016, Florida passed a constitutional amendment allowing for the production, possession, and use of medical marijuana. The Florida Department of Health subsequently crafted a regulatory scheme under which a small number of licenses were awarded to a select few cannabis companies. The licenses provided for industry-coveted vertical integration, meaning a company could grow, process, and dispense marijuana under a single license.

After being denied a license, Florigrown filed a lawsuit challenging the constitutionality of the state’s licensing scheme. Florigrown argued, and the appellate court agreed, that the implementing regulations were unconstitutional because they required that, to obtain a license, an entity must undertake several of the activities described in the constitutional amendment, while the amendment's plain reading allows an entity to participate in any one aspect of the marijuana business, i.e., to cultivate, process, or dispense. The appellate court ruled: “The State may not regulate an industry governed by a constitutional amendment in such a manner that would severely restrict or diminish the industry.” Florida’s medical-cannabis market was one of the most restrictive in the country under the challenged regulatory scheme, and one regularly beset by product shortages.

Sanford Hausler is an appellate attorney with Pollack, Pollack, Isaac & DeCicco, LLP in New York, New York.

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