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Senate bill aims at a freer medical marijuana market

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Proposal would look more like Amendment 2

By Erin Clark of Watchdog.org

The latest salvo in Florida’s medical marijuana regulatory battle is being fired in the state legislature, with a measure that would expand the medical marijuana market.

The bill, by state Sen. Jeff Brandes, a St. Petersburg Republican, would repeal the existing Florida statute governing low-THC medical marijuana usage. In its place is a proposal that looks much more like what Amendment 2 supporters thought they were getting: increased marketplace access and eligibility to take medical marijuana for a wider range of conditions.

First attempts at setting the new regulatory structure for Florida’s medical marijuana program came from the Department of Health and from the Florida Senate, with a bill introduced by State Sen. Rob. Bradley, R-Fleming Island. Both the DOH rules and the Bradley bill looked similar to the pre-existing Florida medical marijuana marketplace.

“The overwhelming support of Amendment 2 was a strong mandate that Floridians demand fundamental change to the way we regulate medical marijuana,” Brandes said in a statement accompanying the introduction of the bill last week.

Brandes called Florida’s existing policy a “state-sanctioned cartel system that limits competition, inhibits access, and results in higher prices for patients.”

Advocacy groups labeled the legislation a positive step.

The bill would break up the “cartel” system Brandes referenced by removing the state’s vertical-integration mandate. Under current law, any medical marijuana dispensary must do everything in-house, from cultivation to sale. This means that the seven dispensaries licensed by the state have control of every stage of the medical marijuana supply chain.

Attorney Matthew Ginder told Watchdog that the legislation would disrupt the hold those dispensaries have on the market.

“It does not mandate vertical integration, meaning that these companies are not required to cultivate, process, and dispense medical marijuana,” he said. “They have the choice to do all of these options, but it’s not required.”

Ginder is senior counsel for the Cannabis Law Group at the Greenspoon Marder law firm. He is also one of the attorneys spearheading the Organization for Safe Cannabis Regulation (OSCR), an advocacy and lobbying group partnering with Florida for Care to influence the state’s new marijuana regulatory structure. One of the group’s stated goals is promoting the creation of “independently licensed entities,” which Ginder says the Brandes bill will help achieve.

A retail cap

An element of the Brandes bill that runs counter to the goal of an open marketplace is a provision that would cap the number of retailers in a county to one per 25,000 residents.

“It’s one that would provide a significant amount of supply in the marketplace, but it’s one that also will slightly contradict the overall thrust of the policy structure,” according to California attorney Matthew Harrison. In addition to helping craft California’s Prop 64, Harrison said he has been advising Brandes’ staff on the proposal.

Harrison added that such caps are typical in states with legalized marijuana. “You actually see it a lot in alcohol laws too, and that’s pretty much where most of the marijuana policy makers got the idea in terms of the outright limitations, which doesn’t exist for most businesses,” he said. “You don’t have it on Starbucks or restaurants or anything like that.”

Lattes may be exempt, but a better comparison is restrictions on health care facilities. Thirty-five states, including Florida, impose certificate of need restrictions, which require a health facility looking to expand its services or bring in new medical equipment to first receive state permission. Despite significant evidence that certificate of need laws hurt patient outcome, Florida saw six new medical services added to the regulatory oversight list in 2016. This brought the total number of services subject to government restriction in Florida to 17 services, which include CT scanners and neonatal intensive care units.

In California, the licensing authority can amend the retailers-to-residents ratio in some circumstances. Harrison would like to see the introduction of similar discretion in Florida’s legislation, particularly because the cap could limit access to medical marijuana in less-populated counties.

Another option for serving patients who don’t live close to a dispensary is allowing for licensed medical marijuana delivery services, a provision included in Brandes’ bill.

Cities and counties would retain autonomy to craft their own legislation outlawing dispensaries, such as the temporary bans that many enacted at the beginning of the regulatory brouhaha, but could not ban delivery from other locations.

But Ginder predicts a rash of municipality bans is unlikely.

“Other states have a local ban or county ban options, opt-out options. And those counties where their voters weren’t majority in favor of it, it may make sense. Here in Florida, because there was such overwhelming support, I don’t see a lot of counties opting out.” The Amendment 2 ballot measure won a majority of voters in each of Florida’s 67 counties.

In addition to policy advocates, doctors should also be encouraged by the Brandes bill, which Bell said: “shows greater respect for the doctor-patient relationship and eases the burden on recommending physicians.”

The Senate bill would require doctors to “order” medical marijuana for patients, along with submitting dosage and treatment plans to the state registry. Brandes’ bill authorizes doctors to “recommend” medical marijuana to patients if they deem that the benefits of medical marijuana outweigh the potential risks.

Court precedent places “suggesting” on the safer side of the line delineating what constitutes a doctor’s free speech and what is ripe for federal prosecution for prescribing marijuana, which remains a class-1 controlled substance at the federal level.

New market, new taxes

As for how much revenue the sales tax on medical marijuana would bring in, the OEDR predicted a “substantial” revenue bump. Based on the 2014 medical marijuana sales tax revenues in Colorado, the OEDR suggested that the combined revenue increase between state and local government sales taxes in Florida could reach $67 million annually.

The sales tax is getting pushback from House Majority Leader Ray Rodrigues, R-Estero, who said at the end of a recent House Health Quality Subcommittee meeting that the House bill should treat medical marijuana like medicine, and thus not be subject to sales tax.

Ginder agreed that the tax issue required a delicate balancing act. He added that he and other OSCR members had a discussion Feb. 3 that included two Florida state representatives, Rodrigues and Health and Human Services Committee chairman Travis Cummings, R-Orange Park, during which the tax issue came up.

“If you tax medical marijuana too much, then prices will be too high and conceivably patients will be seeking their medicine on the black market. But if you don’t tax it at all, there’s the issue of where is the funding coming from for these programs, because, in order to regulate and oversee a robust medical marijuana program, you’re going to need significant resources to fund it,” Ginder said.

“Funding needs to come from somewhere. If it’s not sales tax, I’d like to see where their suggestion is that the money come from,” he said

Erin Clark is a Florida reporter for Watchdog.org. A graduate of the University of Richmond, Clark competed on the professional tennis circuit for several years before returning to writing. Her work has been republished on Townhall and other news sources. She can be reached at eclark@watchdog.org.

Medical Marijuana, Senate bill

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